HR - Business Crimes [LESSON]

Business Crimes

Introduction

In this lesson, we will learn about the various types of business crimes as well as strategies that businesses can use to deter crimes.

Knowledge Point

crestthreads logoImage of Emily, a woman with blonde hair black eyes and a smile.Meet Emily. She is the Human Resource (HR) Manager at CrestThreads. She usually starts her day by reviewing and answering emails. On this day, she also has to prepare herself for interviews with potential graphic designers for the open position that she recently advertised. After conducting interviews and finalizing a job offer, she addressed an employee relations issue that arose yesterday. She meets with the employees involved to help resolve the conflict while emphasizing CrestThreads’ commitment to fostering a positive work environment. In the afternoon, Emily leads a training session on diversity and inclusion, followed by a meeting with the finance team to review employee compensation packages. She wraps up the day by reviewing and updating HR policies and procedures to ensure compliance with employment laws and regulations.

Now that you have an idea about what Emily does at CrestThreads in her position as the HR Manager, let’s learn more about some of the top duties and responsibilities of most HR Managers. Review the presentation below to learn more.

HR Management | Presentation

Click through the presentation below to learn more about human resources management.

Business Crimes

As the HR Manager at CrestThreads, Emily also needs to stay abreast of the various types of business crimes as well as strategies that can be used to deter these crimes. Business crimes can also be referred to as white-collar crimes. The term “white-collar” comes from the fact that most of these crimes are committed by business professionals. Think of these people as the professionals that you might see wearing a white collared shirt and being more formally addressed while at work. White-collar crimes, while not specifically violent in nature, are still very serious crimes. They can destroy entire companies, and the environment, and ruin the financial stability of customers and the community.

Image of Enron logo.Let’s take a look at a very well-known example of white-collar crime that affected customers, employees, and the economy. In the early 2000’s Enron was a very successful energy company. At its peak, Enron’s shares were worth $90.75. However, the company started using illegal accounting practices to hide losses. They also used special purpose vehicles, or SPVs, to hide debt from investors and creditors. SPVs are subsidiary companies created by a parent company for specific reasons. SPVs can be used for legitimate reasons, but in the case of Enron, they were used to move assets and debts off Enron’s balance sheet and onto those of the SPVs. This in turn made Enron appear more profitable and less risky than it was. When the truth came out, Enron’s shares fell to just $0.67, and the company eventually filed for bankruptcy in 2002.

This white-collar crime affected many people. Investors lost billions of dollars and thousands of employees lost their jobs and their retirement savings. The community as a whole was also affected because the economy took a hit from the collapse of such a large company.

Enron used fraudulent accounting practices to deceive and manipulate, but there are many other types of white-collar crimes. Explore the learning object below to learn about some of the other types of business crimes.

Types of Business Crimes | Activity

Click each icon to learn more about the different types of crimes.

Strategies to Deter Business Crimes

While there is no way to entirely prevent business crimes from occurring, there are some things that businesses can do to help deter these types of crimes. Taking these preventative measures is crucial for maintaining the integrity and success of a business.

  • For many businesses, simple actions like improving lighting or requiring employee identification may help reduce crime.
  • Install security cameras and use an alarm system to deter criminals and also provide evidence if a crime does occur.
  • Use a security fence, locks, and keep shrubs trimmed to maintain a physical barrier. These visible measures can deter criminals.
  • Train employees to recognize suspicious behavior and know how to use the security systems.
  • Employment policies like background checks, drug testing, and employee identification can ensure the best employees are hired.
  • Use safe passwords, restrict employee access to specific online data, back up information, and install firewall protection to prevent online or cybercrimes.

Business Crimes | Practice Activity

Take a moment to check your knowledge about business crimes in the self-assessment below.

Reflection

HR managers play an important role in fostering a positive work environment. Understanding the various types of business crimes as well as how to deter these types of crimes is one of the many facets of the HR Manager’s responsibilities. While business crimes may not be violent in nature, they still have the potential to harm customers, employees, the environment, and the community. Therefore, preventative strategies are an important aspect of HR Management.

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