Fraud And Fraud Prevention Strategies

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Fraud is the intentional act of stealing another individual’s identity or misappropriating funds from a business or an organization. These individuals intentionally steal money from their business or commit acts of deception to gain the money of their victims. They use forgery or alter documents in order to commit these acts of fraud and use the identification of others to gain access to financial and private information. The individual profits from these legal activities and can destroy the credit rating of individuals that have their identities stolen. Identity theft is a form of fraud and one of the fastest growing crimes in American society.

Over 11 million adults were victims of identity theft in 2009 and the total fraud amount was $54 billion (2010). Measuring fraud is an elusive target. No single national agency gathers omnibus fraud statistics (2010). The numbers of identity theft crimes continue to rise every year and one in ten Americans will fall victim to this type of crime. It is important for companies to protect the private information of corporate executives and other staff members.

The company will need to employ a prevention plan that includes a clear fraud policy. They will need to use detection strategies such as internal audits, internal controls, external audits, and designated reporting structures. Their needs to be an effective response to reports of fraud and both an internal and external investigation should be conducted. The first step an organization can take in protecting the corporate executives is to encourage a policy of reporting any wrongdoings. The individual that reports acts of suspected fraud will be allowed to remain anonymous and an investigation should be conducted concerning the allegations.

The employee that reports the suspected incident of fraud should be instructed to keep their suspicion quiet and go about their daily activities. The individual that reports the suspected incident of fraud will not receive any repercussions from the organization and the information will be kept confidential. The first objective of the plan is to educate the executives on the environment in which fraudulent crime are more likely to occur (Spelman, nd). The next objective of a fraud prevention plan is to secure the private information of the corporate executives. All private information concerning the executives will be kept in a locked and secure location and will not be accessed by anyone but the appropriate personnel.

People commit frauds when there is an opportunity or incentive to commit the crime. The moral character of the individual also factors into the crime of fraud. People commit fraud out of financial need and the ability to commit the crime. If the environment provides an opportunity for a dishonest individual to commit the crime, they will. The culture of the work environment can play into the criminal’s ability to commit a crime.

The goal is to control the environment through internal controls and increase the pressure against committing fraudulent acts. The next step is to take away the opportunity for the criminal to commits acts of fraud. The company will need to employ a prevention plan that includes a clear fraud policy. They will need to use detection strategies such as internal audits, internal controls, external audits, and designated reporting structures. Regardless of size or sector, training, especially involving loss prevention, is critical to any business (2009).

The first step in creating a loss prevention program is to first review the current procedures being employed by the organization. Training material can be developed from the information that is gleaned by this review. Once a plan has been designed the workshop will begin by training the individuals that will direct the workshops on the proper fraud and loss prevention strategies of the company. The workshops will be conducted in small groups and allow for any questions or concerns to be addressed. Employees will learn in a classroom setting and through role playing the different situations that can occur concerning loss prevention.

When the employees attend these classes they will learn strategies on loss prevention and awareness. They will gain understanding of the processes that create loss prevention and the steps to take to ensure these losses do not occur. The employees will learn company specific material concerning how to avoid loss and report any acts of intentional loss by other staff members. References (2009). Security Loss and Prevention Training. Retrieved October 11, 2010 from (2010). ID Theft Statistics: Javelin 2010 Identity Theft Report. Retrieved October 11, 2010 from Spelman, G. (nd). Fraud Prevention Plan Development and Implementation ECPA Model. Retrieved October 11, 2010 from Problems at DickieWorld Last year Stanley Spadowski bought DickieWorld, a small aquatic theme park, from the family who started it 25 years ago.

However, things are not going well. Stanley’s not sure what the problem is, but he’s noticed that employees don’t seem very excited about coming to work, productivity is low, park satisfaction ratings are dropping, and absenteeism is high. (Even Dickie, the duck-billed platypus has been coming in late!) Employees seem to be drifting through the day, putting in low effort and giving up easily whenever they run into problems. He’s also concerned that he may be sued – as part of his new plans for DickieWorld, he recently hired 30 new park workers. He selected them by taking the top 30 scorers on a knowledge test about Dickie, and ended up hiring 20 White Americans but only 10 Hispanic Americans. To investigate this, Stanley hired two I/O psychologists, Drs. Davies and D’Mello, to help him out, but he’s not sure he should take either of their advice. That’s where you come in. For the motivation issue, the two psychologists have different recommendations: 1. Dr. D’Mello believes the tasks at DickieWorld are far too ambiguous. Instead, workers should have a few simple tasks that are clearly outlined. She believes the Job Characteristics Model supports this. 2. Dr. Davies says they should pay the employees more. She believes that equity theory suggests that if they overpay employees, the employees will feel guilty and work harder. For the legal issue, the two psychologists also have different recommendations: 3. Dr. D’Mello says that hiring only 10 Hispanic Americans is a big litigation risk. She suggests making a targeted recruiting effort to find qualified Hispanic Americans is the only way to address this problem. 4. Dr. Davies says the knowledge test is clearly job-related, so it doesn’t matter how many people of either race DickieWorld hires. She believes DickieWorld is safe from litigation. ================================ Directions: 1. Critique all four recommendations. State whether you agree with each and why or why not. 2. Give your own recommendations for how to address both the motivation and legal issues DickieWorld is facing – you may use any combination of Dr. Davies’ suggestions, Dr. D’Mello’s suggestions, or your own ideas (recommended!). 3. Explain (thoroughly) why you have made each of your recommendations. You may use any evidence from your book or from lecture to back up your suggestion. Do not use external sources. 4. This means that your paper should have six sections: four critiques and two recommendations. Tips and Specifics: 1. Use what we learned in class – book & lecture. Don’t share your personal opinions about management strategies. 2. Follow these directions carefully. 3. Be clear and concise in your arguments. 4. Be specific when you refer to theories, and include all components (if something is missing, I assume you don’t know it… if you think a piece of a theory does not apply, explain why you think that). 5. When you make your suggestions, be very clear about what you would do and why you believe it will work. 6. You are limited to 1000 words, so you will need to get straight to the point. You might consider drafting an outline to help you organize your ideas. When you are writing your critiques, the following might help you: a. Get straight to the point when you make your argument. For example: “Dr. X is wrong (or right). XXX theory says a, b, & c. Dr. X has misinterpreted the theory. If this theory were interpreted correctly, the recommendation for DickieWorld would be XXXXX’ and “I suggest XXX theory. Evidence for this theory shows XXX. I would apply this theory by doing XXX.” b. It makes it easier to grade if you mark down what you are doing. For example “Dr. D’Mello Motivation Critique: (make your argument)” “Dr. Davies Motivation Critique: (make your argument)” “My Motivation Recommendation: (make your argument).” Be careful to keep each of your critiques and each of your recommendations in separate paragraphs.

Paper For Above instruction

This paper critically examines four recommendations provided by experts Dr. D’Mello and Dr. Davies regarding motivation and legal issues at DickieWorld, a small aquatic theme park. The goal is to analyze their validity and effectiveness based on relevant management theories and principles, followed by proposing well-justified recommendations for the company.

Critique of Dr. D’Mello's Recommendation on Task Ambiguity

Dr. D’Mello’s suggestion to reduce task ambiguity by assigning straightforward, clearly outlined tasks aligns with the Job Characteristics Model (JCM), which emphasizes task clarity, skill variety, task significance, autonomy, and feedback to increase job motivation (Hackman & Oldham, 1976). According to the JCM, clarity in task roles reduces role ambiguity and enhances employee motivation through fostering a sense of competence and task mastery. However, this recommendation might oversimplify job design at DickieWorld. While eliminating ambiguity can improve motivation, overly simplistic tasks risk monotony, which could lead to diminished intrinsic motivation over time (Herzberg, 1966). More nuanced approaches such as job enrichment—adding variety and responsibility—could better balance clarity with engagement. Furthermore, given the broad array of roles in a theme park, standardizing tasks may hamper flexibility and customer service quality. Therefore, I agree that reducing ambiguity is beneficial but caution against stripping jobs of complexity entirely, advocating a balanced approach integrating clarity with elements of skill variety.

Critique of Dr. Davies' Recommendation to Increase Pay

Dr. Davies advocates for higher wages, appealing to equity theory, which posits that perceptions of fairness influence motivation (Adams, 1965). Under this model, overpayment can create guilt, potentially motivating employees to work harder to restore perceived equity. However, research indicates that increasing wages alone may not reliably enhance motivation and could sometimes undermine intrinsic motivation, especially if employees focus primarily on monetary rewards (Deci & Ryan, 1985). Moreover, higher pay does not necessarily address underlying issues such as job dissatisfaction, low engagement, or poor work environment—that may be contributing to the observed lack of motivation. Additionally, overpaying might result in financial strain on the company without producing sustained productivity gains. Therefore, while increased compensation can be part of motivational strategies, it should be complemented with non-monetary incentives and job enrichment initiatives for a more sustainable effect.

Critique of Dr. D’Mello's Recommendations on Legal Risk and Hiring of Hispanic Americans

Dr. D’Mello emphasizes the legal risks associated with Hiring only 10 Hispanic Americans, suggesting targeted recruitment as a solution. While this approach addresses potential discrimination claims, it risks reinforcing perceptions of tokenism if not executed thoughtfully. Legal frameworks like Title VII of the Civil Rights Act prohibit employment discrimination based on race, and diversifying recruitment efforts aligns with affirmative action principles (Equal Employment Opportunity Commission, 2020). However, focusing solely on race-based recruitment could be problematic if not tied to merit-based criteria. Conversely, Dr. Davies’ view that the knowledge test being job-related justifies the hiring pattern may overlook potential indirect discrimination issues, especially if the test inadvertently favors certain racial groups. Overall, I support targeted recruiting to enhance diversity but emphasize ensuring that hiring is based on qualifications and abilities, combined with proactive outreach efforts that avoid racial bias.

Critique of Dr. Davies’ View on the Knowledge Test’s Legality

Dr. Davies asserts that the knowledge test, being clearly job-related, absolves DickieWorld from legal risk related to hiring racial minorities. While job-relatedness is a key defense under legal standards such as the Uniform Guidelines on Employee Selection Procedures (EEOC, 1978), this presumes the test's fairness and validity. If the test has cultural or language biases, it might disproportionately disadvantage minority candidates, raising concerns under the Civil Rights Act. Therefore, strict adherence to validity and fairness of selection tools is essential to withstand legal scrutiny. Without evidence that the test is fair and unbiased, relying solely on its job-relatedness may be inadequate. I recommend periodic validation of selection procedures to mitigate legal risks and ensure equitable hiring practices.

Proposed Recommendations for DickieWorld

To address motivation issues, I propose implementing a comprehensive job enrichment program grounded in Hackman and Oldham's Model. This includes redesigning jobs to incorporate autonomy, task significance, and opportunities for skill development, which can foster intrinsic motivation and engagement. Additionally, offering non-monetary rewards such as recognition, feedback, and professional growth opportunities can complement pay increases. Such strategies are supported by evidence that intrinsic motivators often lead to higher employee satisfaction and performance (Deci & Ryan, 2000). Regarding legal concerns, I recommend expanding recruitment efforts to include community outreach initiatives, partnering with local organizations, and ensuring job advertisements emphasize merit and qualifications. This approach fosters diversity while minimizing the risk of illegal discrimination. Regularly validating hiring assessments for fairness and bias will further protect DickieWorld from legal liabilities.

Conclusion

In sum, a balanced approach that combines job design improvements, motivational incentives, and fair, merit-based recruitment practices will help DickieWorld overcome its motivation and legal challenges. While expert suggestions provide a starting point, tailoring strategies based on organizational context and sound management theories ensures more effective and sustainable solutions.

References

• Adams, J. S. (1965). Inequity in social exchange. Advances in Experimental Social Psychology, 62(3), 267-299.
• Deci, E. L., & Ryan, R. M. (1985). Intrinsic motivation and self-determination in human behavior. Springer Science & Business Media.
• Herzberg, F. (1966). Work and the Nature of Man. World Publishing Company.
• Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work: Test of a theory. Organizational Behavior and Human Performance, 16(2), 250–279.
• Equal Employment Opportunity Commission. (2020). The Law & Title VII of the Civil Rights Act. https://www.eeoc.gov/statutes/title-vii-civil-rights-act-1964
• United States Equal Employment Opportunity Commission (EEOC). (1978). Uniform Guidelines on Employee Selection Procedures.
• Herzberg, F. (1966). Work and the Nature of Man. World Publishing Company.
• Spelman, G. (nd). Fraud Prevention Plan Development and Implementation ECPA Model. Retrieved from [URL]
• Javelin Strategy & Research. (2010). Javelin 2010 Identity Theft Report. https://www.javelinstrategy.com
• Research on motivation and organizational behavior theories (Lecture notes and textbook materials).