Everything is something worth knowing.


Erudite Blog

Not everyone who works for you works for you. 

When most people think of areas of the company likely to be involved in fraud, they likely don’t think of human resources as one of them. Unfortunately, it is one of them and an important one. HR Fraud has a particularly negative effect on an organization because HR affects people and people are at the center of the organization. 

When one thinks of internal corporate fraud, several functional areas immediately come to mind: purchasing/procurement, accounting, billing, and sales, to name a few. HR doesn’t immediately pop up because there doesn’t seem to be an immediate cash nexus. There doesn’t seem to be anything to steal. To a fraudster, however, where there’s a will, there’s a way.

Bidding fraud is a type of fraud that directly damages the competitiveness of an organization by raising input costs, thereby causing necessarily lower profitability or higher output prices and degrading competitiveness. The goal of service providers or vendors who participate in bidding fraud is to avoid competition or artificially raise the economic value they can extract from the purchasing organization.

In many cases, collusion in bidding is aided by support from organizational insiders, be it in the purchasing department or higher up. With diligence, collusion in bidding can be understood, investigated, and rooted out.

You are probably in the business of predicting the future. You may not have thought of it that way, but you probably are. Investors, marketers, politicians, intelligence analysts, and risk managers are all undertakings that share some commonalities - they make initial plans ahead of time, place their bets, then monitor an environment that is largely out of their control, looking for indications that the risk environment is about to change, so that they can modify their betting stance, security posture, investment stance, product positioning, etc.

Individuals and organizations in the midst of creating management plans always have to deal with the question of choosing risk indicators for their plans. These indicators, if well chosen, signal that something is changing in the risk environment. They show what is going on in a particular scenario and if the situation merits a change in organizational safety and security posture due to a potential impending crisis. Is this important for me? Is this information for me? Should I be concerned? With all the information out there, and with not knowing what is important and what is not, choosing good indicators of risk is extremely difficult.

Theft of goods is one of the first things that pops into people’s minds when they think of retail fraud. The fact that this is true is no accident. Theft of goods is widespread and many people who have worked in retail have probably either directly seen it occur and/or heard about it happening at one time or another. In order to fight against it, we have to know something about how it is done.

Thieves seem to have no limit on finding creative ways to steal things. We’ll discuss three common themes here, which may have unlimited variations when seen in the wild. There are, of course, many unsophisticated ways of stealing goods from a retail operation, but the Five Finger Discount is not worthy of any real fraudster. A smart thief knows that there is high value in inventing a way to steal and get away with it in such a way that it can be safely and reliably repeated time and again. Smart thieves steal so that the theft is firstly, difficult to notice and secondly, difficult to confirm.

“The wicked leader is he who the people despise. The good leader is he who the people revere. The great leader is he who the people say, we did it ourselves.” — Laozi (Lao-Tzu)

Lao Tzu must have been involved in crisis management planning, for his description of leadership perfectly describes what is required of leadership in a crisis.

Lots of words are spent on the subject of leadership. It is one of those mysterious things that people love to argue about and discuss perhaps partly because it is such a slippery concept. We describe the leaders we look up to with words like courage, integrity, decisiveness, charisma, and vision. Those who succeed are surmised to possess leadership. Those who fail are surmised to lack it. Some organizations put a premium on hiring for leadership while others deemphasize it. Some may even say that in many pursuits leadership is of questionable value. All while leadership’s true importance remains difficult to measure.