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Fraud Exprosed Whot you Dont Could Cost your company millions - Joseph W.

Joseph W. Fraud Exprosed Whot you Dont Could Cost your company millions - Wiley Publishing, 2003. - 289 p.
ISBN: 0-471-27475-5
Download (direct link): fraudexposedwhatyoudont2003.pdf
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The third rationale cited by Thompson is that willful blindness may come into play. A company oriented to production or building schedules may have a “get it done on time” attitude that pushes controls and investigation of anomalies out of sight. A powerful CEO with a scheduled press conference to announce the opening of the new plant or project can provide some pretty powerful incentive to the person in charge of construction. If they let a few problems get in the way of hitting that completion date, they might as well mail in their resignation and spare the boss the trouble of firing them. Persons inclined to commit fraud, whether inside or outside the organization may be venal, but they are normally not stupid. They realize what is going on and that in the rush to complete things controls are not going to get the normal amount of attention, even assuming in normal times that level of attention was high to begin with. Thus do some frauds occur and never get looked at.16
Schon refers to varieties of such behavior as “dynamic conservatism,” that is, the expenditure of significant organizational time, energy, and resources to try to stay the same.17 He recounts a story told by historian Elting Morison in his book, Men, Machines and Modern Times about how innovation met opposition in the United States Navy as an example of this process at work. It seems a young lieutenant came up with an improved sighting mechanism for naval guns but had it rejected numerous times by Naval brass, even though the system was sim-
FRAUD EXPOSED
pler and more accurate. He finally succeeded when he got the ear of President Theodore Roosevelt. The Navy, Morison concluded, was more interested in protecting the social bonding among gun crews than it was in a simple system that required no teamwork or great skill.18
Morison and Schon are speaking here of the powerful cohesion of social systems; organizations, among other things, are social systems. Bratton has commented on the tendency of organizations to drive work routines that seem to have little practical effect, and we shall later hear the observations of Lardner and Repetto as to how culture is passed down in police departments.
There is a famous scene in the movie The Sand Pebbles in which actor Steve McQueen plays a new arrival on a Navy ship stationed in China at the time of the Boxer Rebellion. On his first morning aboard, McQueen’s character starts to shave when a Chinese servant runs up and offers to shave him. McQueen brusquely dismisses the servant. He is then confronted by another crewman, who asks why he will not let the man shave him. Mc Queen replies to the effect, “I can do it myself,” to which the older crewman replies, “It’s his rice bowl.” McQueen relents, and allows himself to be shaved, since this service justifies the Chinese man’s job on board.
So, too, with organizations. There is much invested, psychologically, socially, and financially, in the way things are. Structure and processes justify jobs, careers, and organizational status. Change may threaten all of these things, so it is natural to expect resistance. The issue is not resistance, but how to overcome it.
Lipsky, in his Introduction to Edelman’s book, Political Language, refers to this phenomenon as “caused inaction.” We can experience the lack of activity, but we can at best, absent research, only speculate as to its causation and rationale.19 Lipsky goes on to speculate as to the forces that create “caused inaction,” and concludes there is often a lot of effort and energy that goes into keeping things as they are. In this regard, he is conceptually similar to Schon in his thoughts about “dynamic conservatism.” What may appear at first glance or after surface-level inquiry to be a solid mass may actually be an active collection of molecules and processes all working actively to keep things in stasis.
Edelman has observed that organizational realities are often the reflections of their creators’ perceptions, objective data notwithstanding:
What is appearance and what is reality?... public policies rest on the beliefs and perceptions of those who help make them, whether or not those cognitions are accurate.... research reflects the prevailing cognitions of respondents and researchers and, therefore, the dominant contemporary ideology; for it reproduces whatever people have been socialized to perceive and believe, rather than analyzing the range of alternative symbolic evocations.20
That these perceptions may be evinced and acted on by their holders with a high degree of certitude may speak, in Edelman’s quoting of Neitzsche, to “the
THOUGHTS ON OCCUPATIONAL FRAUD
dogma of immaculate perception.”21 That is, the firm belief that I can observe reality unimpeded by my thoughts, beliefs, or perceptions, and that such observations are, therefore, untainted in their fundamental accuracy or utility for formulating appropriate courses of action.
Edelman also comments on the utility, and dysfunctionality, of benchmarks within organizations.22 The establishment of a benchmark portrays a necessarily arbitrary definition of reality, which can then operate to subtly limit the ranges of organizational problem resolution. The idea, which can be objectively based on the ACFE’s Report to the Nation, that 6 percent of revenue is what most organizations apparently lose to occupational fraud, can operate to become an unintentional benchmark that suggests that if my organization is only losing 6 percent, I am normal. Additional courses of action may, therefore, be foreclosed by my acceptance of a benchmark as an accurate representation of an organizational reality I may, or may not, accept and endorse based on my personal experience and organizational goals.
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