Investigating Theft in Retail Organizations Essay -- Stealing Thieves

Investigating Theft in Retail Organizations In an industry where a 1% change in gross margin can mean millions of dollars, retailers have begun focusing greater energy on mitigating losses caused by employee theft. Employee theft has become a problem of increasing significance for retail organizations over the past few decades. In 2004, the European Theft Barometer report showed an increasing prevalence of employee theft in retail organizations, up 1% from 2003 (Technology Tackles Employee Theft, 2005). It’s been estimated that â€Å"the outcome of employee deviance and delinquency accounted for between $6 and $200 billion of organizational loss annually† (Lau, Au, & Ho, 2003). Employee theft can be loosely defined as any behavior by an employee of an entity that is intended to produce detrimental financial outcomes for the employer. This includes pocketing cash, stealing inventory, using company resources for personal gain, and other deceptive tactics. Most modern day retailers are at some level of risk as moti vation and opportunity make theft an attractive choice for many employees. While large organizations have focused on this problem for several years, many small businesses have not devoted the time and resources to addressing this problem. Small businesses may be at particular risk due to a lack of high-tech internal controls that larger organizations may have. Additionally, small businesses often â€Å"frequently deal in cash – the easiest temptation of all to a dishonest worker† (Biddick, 2004). Consequently, small businesses must pay special attention to this problem in hopes of diminishing the risk (Biddick, 2004). Understanding the motivations of an employee that engages in theft can be an essential means to changing the circumstances and situations that might encourage these harmful activities. Employee motivations can be classified into three main categories: personal, organizational, and economic factors. Personal factors include such items a person’s individual viewpoint on and reactions to such items as job satisfaction, relationship with co-workers and employer, and one’s perceptions of the work environment (Lau, Au, & Ho, 2003). These are all factors that will differ based on the employee. Organizational factors refer to the controls placed in the work environment. These include the broad â€Å"Control Environment†, as referred to by the COSO fra... ...he situation. When investigating the theft, they should perform a cost-benefit analysis, and then use both physical and testimonial fact gathering to uncover the culprit. Works Cited: Bassett, J. W. (2003). Solving Employee Theft Cases. The Internal Auditor, 60(6), 23. Retrieved May 11, 2005, from ABI-Inform Online Biddick, K. (2004). Think big when protecting small business from employee theft. Nation’s Restaurant News, 38(36), 26. Retrieved May 10, 2005, from ABI-Inform Online Lau, V., Tung Au, W. & Ho J. M. (2003). A Qualitative and Quantitative Review of Antecedents of Counterproductive Behavior in Organizations. Journal of Business and Psychology, 18(1), 73-100. Retrieved May 15, 2005, from ABI-Inform Online Shoplifting, employee theft and check fraud top retailers’ concerns. (2005). NPN, National Petroleum News, 96(11), 12. Retrieved May 11, 2005, from ABI-Inform Online Technology Tackles Employee Theft. (2005). Retail World, 58(3), 41. Retrieved May 10, 2005, from ABI-Inform Online Tryon, G. & Kleiner, B. H. (1997). How to investigate alleged employee theft properly. Managerial Auditing Journal, 12(1), 19. Retrieved May 15, 2005, from ABI-Inform Online