Administrative Behavior: Misuse Of Company Resources Essay Examples

Type of paper: Essay

Topic: Company, Employee, Workplace, Finance, Money, Crime, Theft, Ethics

Pages: 5

Words: 1375

Published: 2020/12/18

For a long time now, misuse of company resources has been an emotive ethical issue. Many companies have lost huge chunks of their resources through embezzlement, corruption, and fraud. From the outset, company assets should essentially be used in the execution of authorized and legitimate business purposes. These resources include money, time, merchandise or company property, company supplies, and confidential information such as trade secrets and product designs (Christopher, 2003). Among these, money is the most common asset that is pilfered from companies more so by the senior management. Misuse of company resources becomes an important ethical issue because it is propagated by the very persons entrusted with the responsibility of taking care of company resources in achieving the company objectives. The blatant theft of company resources and embezzlement is an administrative dilemma because it can lead to companies degenerating into loss-making entities. The propagation of the vice by the very people charged with running the company just brings to the fore the issue of morality and integrity (Yang, 2001). Managers and employees who engage in the stealing and misuse of company resources are nothing but selfish, immoral and hell-bent on bringing the companies they work to their knees.
The misuse of company resources is purely a vice that can be explained in a societal context. In most companies, managers constitute a large portion of employees that engage in blatant misuse of company resources (Yang, 2001). They mostly steal company resources through embezzlement. Embezzlement is the theft that is committed by a person who occupies a position of trust, and they are legalized to access the items or cash they steal (Gottschalk, 2010). Managers will naturally engage in embezzlement because they occupy positions of trust and there exists minimal supervision over them. The minimal supervision and disregard of good conduct and integrity prompts managers to embezzle money belonging to a company. This selfishness is informed by get-rich-quick mentalities that are extremely counterproductive to the company. They disregard the welfare of the company and engage in self-serving activities. This behavior is outright wrong and unethical (Christopher, 2003). The management should be focused on protecting the resources of the companies they work for to ensure the companies turn in a profit and fulfill the aspirations of both shareholders and customers. Moreover, there is a high likelihood of younger employees engaging in theft because the high need for money among them. Younger employees are probably starting out, and they have needs that require huge financial outlays. These needs include buying a house, paying for mortgages, purchasing furniture, paying back their student loans, paying their medical covers, and money to use in daily needs of their probably young families.
The misuse of company resources can be complex, and ramifications of its effects are far-reaching. An example of a vice that has immense potential to make companies crush is the financial statement fraud (Gottschalk, 2010). This is mostly committed by the top-level decision-making organs of the company. It involves the top-management of the company overriding controls within the business, by making them appear like they are operating effectively. Fraudulent financial reporting encompasses understating of revenues of the company or overstatement of the liabilities of the companies. The understatement of revenues is usually done so that the people involved can embezzle the unreported revenues. The fraudulent activities encompass alteration or falsification of accounting records and intentional omission or misrepresentation of crucial information regarding transactions or important information. Moreover, this fraud can occur through wrongful misapplication of principles of accounting in relation to amounts of cash or their classification.
Financial fraud is a devastating form of embezzlement by the company employees. This is because it can involve huge amounts of finances which can lead to collapse of companies. Moreover, is normally orchestrated by the senior management and may involve the collaboration of both the internal and external auditors of the company. First of all, the shareholders are the worst hit by this form of misuse of company resources. The money they have invested in the company through the shareholding plan is essentially diverted to the wrong pockets and activities. This reduces the funds available for running the affairs of the company and ultimately the robustness of the company. This in effect exposes a company to a decline or possible closure. Moreover, the diversion of a company’s funds into wrong pockets puts a company at risk of failing to service its loans (Gottschalk, 2010). Loan default due lack of funds can lead to creditors soliciting for the payment of the money they had advanced to the company by launching court injunctions. This turn of events places a company at the possibility of being placed under receivership and hence the loss of its robustness. If the company is placed under receivership, it ceases listing on any securities exchange hence loses its ability of raising capital through the sale of shares. Additionally, a crippling company will have challenges paying its suppliers, and this can result in loss of trust of the suppliers in the company. Loss of trust by the suppliers means that the company will not be able to get raw materials necessary for production hence its possible closure. Moreover, the collaboration of auditing firms in execution of financial fraud puts a taint on their credibility. If it is found they participated in financial reporting impropriety, they will have soiled their names, and they will ultimately lose clients. No person would want to conduct business with a company that goes against the grain and disregards the appropriate guidelines for financial reporting. These effects indicate that committing of a financial fraud by a greedy management team can have far-reaching ramifications for the entire ecosystem of the company. The trickle-down effects of engaging in financial fraud by the management are immense and can lead to eventual closing of the company.
Elsewhere, the various methods of employee theft speak much about the quality of staff in a particular company. Larceny involves an employee outright stealing of property or money from a company (Gottschalk, 2010). The employees who engage in larceny are basically thieves, and their upbringing may be at play when they engage in theft of company resources. Embezzlement of financial resources of the company by mostly managers can be blamed on lack of cultivation of integrity in this cadre of employees. Engaging in this vice indicates misuse of trust that may be endowed in a business manager. Essentially, embezzlement is rampant among people who were not imbibed in the tenets of integrity while they were growing up; they pursue self-interests at the expense of the common good of the entire company. As it pertains to theft of company resources through skimming, resources are whisked away into people’s pockets before they are recorded. Skimming is an ugly method of employee theft and it brings to the fore the issue of trusting a company’s financial resources with employees. Another method of employee theft involves engagement of employees in fraudulent disbursements. Here, the employees exploit the systems of the company illegally to benefit themselves. These fraudulent disbursements include check tampering, billing schemes, payroll schemes, and expense reimbursement schemes. At all instances, these schemes appear as legitimate activities of the company. The common thread in all these fraudulent activities is that they are committed to the detriment of the company, and the people who engage in them lack in ethics and they do not have the welfare of the company at their heart.
The issue of misuse of resources of a company is quite widespread in companies, and its effects are immense bleeding companies a lot of money and property. This calls for the establishment of a mechanism to eliminate or control them. Companies should conduct extensive and intensive background checks on all the potential employees they want to hire to ensure they weed out those with questionable character and a history of fraud (Yang, 2001). Moreover, companies should ensure accountability permeates the entire departments of the organization and no position in the company has immense power to singlehandedly authorize particular actions without the consent of other people. Every position should be answerable to other individuals to curtail the possibility of people misusing their positions to steal from the company. In addition to this, companies should hire independent entities specializing in providing security for the company from possible employee theft (Yang, 2001). The benefits that will accrue as a result of hiring this company to monitor the activities of the employees and abating employee theft far outweighs the loss the company is likely to incur as a result of persistent employee theft.


Christopher, D. A. (2003). Small business pilfering: the “trusted” employee (s). Business Ethics: A European Review, 12(3), 284-297.
Gottschalk, P. (2010). Categories of financial crime. Journal of Financial Crime, 17(4), 441-458.
Yang, K. (2001). Managing Human Behavior in Public and Nonprofit Organizations. Public Administration Quarterly, 25(3/4), 518.

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