The Damage Of Theft To A Company Essay

Employee larceny is ever been dearly-won to any concern. This is still more appropriate in instance of large retail concatenation organisations. The enhanced security agreements in the recent times have made this subject more of import than of all time. This research is conducted to look into the possible grounds for employee larceny in supermarkets in Malaysia. It identifies the relationship between assorted factors with the employee larceny behaviour. It aimed to develop a theoretical account to assist large retail concatenation organisations to plan effectual internal control systems to prevent/reduce employee larceny.

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This chapter covers the undermentioned subdivisions:

1. Background to the research

2. Malayan retail industry and retail shrinking

3. Research job, issues and aims

4. Justification for research

5. What ‘s new in this research?

6. Organization of this thesis

7. Definition of footings and

8. Drumhead

1.1 BACKGROUND TO THE RESEARCH

Retailing offense continues to be a challenge for concerns in the USA and elsewhere ( National Retail Security Survey, 2003 ). Retailing offense is fiscal loss attributable to a combination of assorted factors like client larceny, employee larceny, internal mistake ( administrative or process mistake ) and supplier-vendor frauds. The recent worldwide shrinking study revealed 42.4 % of the retail shrinking was due to client larceny, 35.3 % due to employee larceny, 16.9 % due to internal mistake and 5.4 % due to suppliers-vendors frauds. Entire planetary shrinking in the 42 states surveyed costs retail merchants U.S. $ 107.3 billion ( $ 107,284 million ), tantamount to 1.36 % of retail gross revenues: a serious menace to retailer ‘s bottom lines peculiarly at a clip when many retail merchants are get downing to experience the pinch of an economic downswing. A cardinal point to be noted is that the cost of psychiatrist is finally borne by non merely retail merchants, but besides by consumers and society at big. Here ‘Shrinkage ‘ or ‘shrink ‘ refers to an accounting figure, reflecting the difference between the fiscal gross the concern should hold received ( based upon stock list and purchases ) and the sum really received. ( The Global Retail Theft Barometer, 2010 ).

The ‘Barometer ‘ farther confirms that retail psychiatrist is a planetary issue: it is a common job across all states, parts and market sectors. The ‘Barometer ‘ farther points out that In 2010, thieves stole a really broad scope of ware, but tended to concentrate on expensive popular branded points including: razor blades/shaving merchandises ; cosmetics/face picks and aromas ; smart phones and electrical appliances ; intoxicant ; fresh meat/expensive grocery ; electric toothbrushes, electronic monitoring devices ; infant expression and java ; DVDs and electronic games ; manner ( particularly branded points, leather, pocketbooks and accoutrements ) ; sports-branded goods and athleticss places ; electronic goods ; branded dark glassess and tickers. The study tells that over 6.2 million client and employee stealers were apprehended last twelvemonth.

Employee larceny is 2nd major constituent of retail shrinking due to the immense retail infinite in supermarkets and large size retail organisations. Employee larceny can be defined as the larceny of anything of value from the retail merchant by an employee or confederate. The term “ anything of value ” includes hard currency, ware, belongings, services and information. Employee larceny occurs largely at the check-out procedure country followed by the gross revenues country and the client desk/courtesy country ( Hollinger and Clark, 1983 ).

The larceny methods include stealing ware, stealing hard currency, retaining grosss to demo stolen points were paid for, invalidating a sale or doing a no-sale after a client has paid and pocketing the hard currency, soaking, shortchanging, voucher dressing, credits for nonexistent returns and skiding merchandise through the lane without bear downing. Other illustrations include warehouse forces stealing stocked points, and cleansing and care forces taking valuables with the rubbish. Employee larceny besides takes topographic point at the point-of-receipt of ware and includes losingss due to payment for goods non received.

Employee larceny is any usage or abuse or larceny of employer ‘s assets by the employees without permission to make so ( Justice J. Walsh, 2000 ). Money is the most common plus that is stolen from employers. Larceny of clip happens when an employee is paid for the clip which he/she did non work. Normally this happens by distorting of clip records. Technically, larceny of clip besides includes employees who are non working while on the occupation, although lawfully this is really hard to turn out. Larceny of supplies is another usual signifier of employee larceny. Examples of this signifier of larceny are office supplies ( computing machines, documents, cabinets, etc. ) and restaurant supplies ( nutrient, silverware, condiments, etc. ). Another illustration of larceny of company belongings is merchandise shows. Overcharging the clients and later pocketing the excess hard currency can wholly impact a concern ‘ credibleness, because it affects non merely the employer but besides the clients. If the clients find out that a concern is soaking, it can ache that concern ‘ growing. This is really familiar in eating houses because many eating houses do non maintain a close oculus on their employees ‘ actions. Stealing information is possibly the most detrimental signifier of larceny. Familiar examples of this nature are larceny of trade secrets and merchandise designs.

A figure of surveies have been conducted in United States, Canada and in European states about the employee larceny in retail organisations and super markets. The US Chamber of Commerce estimations that US employers lose $ 20 billion to $ 40 billion a twelvemonth due to employee larceny. It besides states that 30 % of all concern failures are caused by employee larceny ( David J Shaffer and Ronald A Schmidt 2006 ). For every dollar stolen, supermarkets need to sell at least $ 50 more of goods to do up the loss ( George H Condon, 2003 ). Happy employees steal less in United States ( Jennifer Korolishin 2003 ). Shrink losingss due to employee larceny can be the net incomes in Canada ( George H Condon 2003 ).

1.2 MALAYSIAN RETAIL INDUSTRY AND RETAIL SHRINKAGE

Malaysia ‘s retail trade touched at RM122.54 billion for the twelvemonth 2009, up 106.37 per cent from 2005. Growth has averaged 26.59 per cent annually from 2005 to 2009. Retail gross revenues touched RM59.38 billion during 2005, increased to RM71.69 billion during 2006, gone up to RM95.67 billion in 2007, improved to RM116.10 billion during 2008 and lift to RM122.54 billion in 2009. In the first one-fourth of 2010, it touched the of all time seen highest sum of 32.33 billion ( Department of Statistics, Malaysia ).

From 2006 to 2008, increased urbanisation and instruction proverb Malaysians go even more sophisticated and demanding with their shopping experiences. This brought about the development of quality, world-class promenades across the state in this period, such as 1Borneo ; these promenades house a strong array of international trade names which are unambiguously suited to the spoting demands of consumers. Therefore, new lifestyle retail constructs have become more popular in Malaysia, with retail merchants offering alone ware to provide to the demands of specific consumers. For case, Robinsons Malaysia has 50 to 60 sole trade names for shoppers, whilst Nips in the Pavilion Kuala Lumpur claims to be the “ Generation Three ” Tangs shop, a shop that encompasses Tangs ‘ signature shopping constructs alongside being localized to run into the demands of Malayan consumers.

Store-based Retailing Achieves a Better Performance

Inevitably, store-based retailing maintained its laterality from 2006 to 2008, with somewhat stronger growing than non-store retailing. The development of shopping promenades across the state from 2006 to 2008, particularly in secondary towns, such as the gap of The Spring in Sarawak and East Coast Mall in Kuantan, farther boosted the public presentation of store-based retailing. Direct selling continued to rule non-store retailing, with internet retailing exhibiting the strongest current value growing, albeit from a little base. Interestingly, non-store retail merchant Dell besides opened its first physical counter at Tec Asia in early 2008, stand foring an increased crossing over by non-store retail merchants in an attempt to spread out their growing.

Employee retail larceny in choice retail concerns in Malaysia during 2009-2010

The Global Retail Theft Barometer was released in October, 2010 for the period between July, 2009 and June, 2010. In Malaysia, 19 retail merchants with a combined sale of US $ 1.974 billion participated in the study. The findings of the study reveal that as a per centum of entire gross revenues, retail shrinking in Malaysia was 1.53 per cent. In this, the client larceny sums to 51.6 % ( US $ 132.10 million ) This was followed by employee larceny at 22.3 % ( US $ 57.09 million ) and provider or seller larceny at 5.9 % ( US $ 15.19 million ). The staying 20.2 % of fiscal loss amounting to US $ 51.71 million was due to administrative mistakes.

As per the findings of The Global Retail Theft Barometer, the methods of employee retail larceny in choice Malayan retail concerns are as follows:

Table 1.1 Main methods of employee retail larceny in choice retail concerns in Malaya:

Cash, vouchers and verifiers

18.6 %

Merchandise

38.3 %

Refund fraud, false markdown

27.3 %

Large fiscal frauds

6.9 %

Collusion

8.9 %

Entire

100

Beginning: The Global Retail Theft Barometer, 2008

Research PROBLEM, ISSUES AND OBJECTIVES

It is a hard occupation to right come close the sum of gross lost through employees ‘ larceny by manner of hard currency, goods, and services because much of these activities remain undetected, unnoticed or unpublicized. It has been estimated that every bit much as 75 % of losingss attributable to employee larceny is undetected because of the trouble in dividing stock list shrinking into its major internal ( larceny ) and external ( shoplifting ) constituent parts ( Green, 1997 ).

Like the Global Retail Theft Barometer, many other surveies have besides made an effort to place the base rate for employee larceny ( see Ash, 1988 ; Brooks and Arnold, 1989 ; Jones et aluminum, 1990 ; Slora, 1989 ; Wimbush and Dalton, 1997 ). The consequences have shown a wide-range of estimations runing from 3 to 62 per centum. Thus it could be seen that employee larceny is an expensive job for an organisation ; it has been reported as 10 times every bit dearly-won as America ‘s street offense ( Greenberg, 1997 ). The sum of belongings larceny entirely has been estimated to be $ 40 billion per twelvemonth ( Shapiro, Trevino, & A ; Victor, 1995 ), and about one tierce of employees admit that they steal from their employers ( Kamp & A ; Brooks, 1991 ).

Researchs on ancestors and other correlatives of employee larceny have focused on two wide classs of factors: person ( personality ) factors and situational factors. Both of these factors are of import and have practical deductions for concerns. Individual factors are variables that employers largely can non command ; employers may merely be able to react to them. Situational factors such strong policies about larceny, precautions, etc., are much more under the control of employers.

The cardinal aim of this research is to look into the cardinal research job: What are the factors lending to workplace theft behaviour of the employees of retail floor of ace markets in Malaysia and how the internal control systems help to prevent/reduce the workplace larceny behaviour in instance of the employees of Supermarkets in Malaysia.

The followers are the research objectives to look into this cardinal research job:

Aims:

a ) General aim:

To analyze the assorted factors lending to the purpose to steal in the supermarkets in Malaysia and besides to analyze the relationship between the internal control systems and workplace larceny behaviour in the supermarkets in Malaysia.

B ) Specific aims:

1 ) To place the possible grounds taking to the purpose to steal by the employees in supermarkets in Malaysia.

2 ) To happen out the relationship between the single factors and the purpose to steal in supermarkets in Malaysia.

3 ) To happen out the relationship between the organisational factors and the purpose to steal in supermarkets in Malaysia.

4 ) To happen out the relationship between the purpose to steal and the workplace theft behaviour of the employees of supermarkets in Malaysia.

5 ) To find the moderating effects of internal control systems between the purpose to steal and workplace larceny behaviour of the employees in supermarkets in Malaysia.

6 ) To place the effectual internal control systems to prevent/reduce employee larceny in supermarkets in Malaysia.

The research issues and related aims to look into the research job are described in Table 1.2

Table 1.2 Research Issues and Aims

Research issue

Research aim

1. What are the grounds lending purpose to steal by the employees in retail floor of supermarkets in Malaysia?

To place the possible grounds taking to the purpose to steal by the employees in supermarkets in Malaysia.

2. What is the relationship between theindividual factors and the purpose to steal in supermarkets in Malaysia?

To happen out the relationship between the single factors and the purpose to steal in supermarkets in Malaysia.

3. What is the relationship between theorganizational factors and the purpose to steal in supermarkets in Malaysia?

To happen out the relationship between the organisational factors and the purpose to steal in supermarkets in Malaysia.

4. What is the relationship between the purpose to steal and the workplace theft behaviour of the employees of supermarkets in Malaysia?

To happen out the relationship between the purpose to steal and the workplace theft behaviour of the employees of supermarkets in Malaysia.

5. What are the moderating effects of internal control systems between the purpose to steal and workplace larceny behaviour of the employees in supermarkets in Malaysia?

To find the moderating effects of internal control systems between the purpose to steal and workplace larceny behaviour of the employees in supermarkets in Malaysia.

6. What are the effectual internal control systems to prevent/reduce employee larceny in supermarkets in Malaysia?

To place the effectual internal control systems to prevent/reduce employee larceny in supermarkets in Malaysia.

Employee larceny in a retail organisation can be defined as the larceny of anything of value from the retail merchant by an employee or confederate. The term “ anything of value ” includes hard currency, ware, belongings, services and information. In retail organisations employee larceny occurs largely at the check-out procedure country followed by the gross revenues country and the client desk/courtesy country ( Hollinger and Clark, 1983 ). Methods include stealing ware, stealing hard currency, retaining grosss to demo stolen points were paid for, invalidating a sale or doing a no-sale after a client has paid and pocketing the hard currency, soaking, shortchanging, voucher dressing, credits for nonexistent returns and skiding merchandise through the lane without bear downing. Other illustrations include warehouse forces stealing stocked points, and cleansing and care forces taking valuables with the rubbish. Employee larceny besides takes topographic point at the point-of-receipt of ware and includes losingss due to payment for goods non received. US retail merchants have recognized for old ages that employee larceny is a immense and turning job ( Mathews, 1997 ).

These losingss were, on norm, 1.72 per centum of retail gross revenues, comparable in magnitude to retail net income borders as a per centum of gross revenues. Surveies by UK ‘s Center for Retail Research ( 2001 ) and the Retail Council of Canada ( 2001 ) loosely corroborate these figures and demonstrate that concern about retail shrinking is non restricted to US retail merchants entirely. Together, with the sums stolen, the cost of forestalling larceny imposes a significant load on retail merchants. Employee larceny has been cited as a primary factor in 30 per centum or more of all concern failures ( Snyder et al., 1991 ).

Larceny from retail merchants can ensue in bankruptcy or near closing. It consequences in lost rises and fillips if non layoffs for employees, and higher monetary values for clients as the undermentioned quotation mark argues: A shop operating at 3 per centum net income on gross revenues would hold to sell $ 1,216.66 worth of ware a twelvemonth to do up for the day-to-day loss of a ten-cent confect saloon. Just to cover a annual loss of $ 1,000 in larcenies, a retail merchant would hold to sell each twenty-four hours over 900 confect bars, or 130 battalions of coffin nails, or 380 tins of soup. Faced with such unreasonable selling volumes most little concern people are forced alternatively to raise their monetary values and lower their ability to vie ( Verril, 1999 ).

Research workers and employers appear to hold by and large on how to specify employee larceny. Research workers analyzing this phenomenon have defined employee larceny loosely as an employee ‘s unauthorised pickings, control, or transportation of money, goods, and/or services of

an employer committed during the normal class of work activity ( Merriam, 1977 ). Organizations create policies that fit this general definition and farther place the specific types of behaviour considered to be theft in their peculiar context. By ordaining such policies, organisations seek to determine the employee perceptual experiences of inappropriate behaviour.

However, these policies frequently fail to bring forth a common perceptual experience among employees as to the types of behaviour considered employee larceny. While most employees agree that some types of behaviours ( such as stealing hard currency ) are theft, other types of behaviours are seen by employees as more equivocal. For illustration, the unauthorised pickings of nutrient by eating house workers would be included in the above definition of larceny, but some employees may see such stealing a fringe benefit of the occupation.

Indeed, research workers suggest that employees are improbable to portion common definitions of employee larceny ( J. Greenberg, 1998 ; L. Greenberg & A ; Barling, 1996 ; J. Greenberg & A ; Scott, 1996 ; Hollinger & A ; Clark, 1983 ; Tatham, 1974 ). Hollinger and Clark ( 1983 ) found that several types of employee larceny occur in organisations and that societal norm consensus did non be among the employees they interviewed with regard to acceptable and unacceptable ( larceny ) behaviour. Social norm consensus represents the sum of understanding among coworkers as to whether a specific type of behavior constitutes larceny.

This research besides is consistent with Mischel ‘s ( 1973 ) work on cognitive societal acquisition, which suggests that state of affairss vary in the grade to which they determine and limit persons ‘ attitudes and behaviour. That is, state of affairss with a high grade of societal norm consensus serve to restrict persons to specific ideas and actions. Social norm consensus is likely to play an of import function in labeling an ascertained behaviour as larceny. Although some theoretical work ( J. Greenberg, 1998 ) indicates that deficiency of understanding among organisational members as to what is considered larceny and non-theft is likely to impact whether a peculiar single defines a specific incident as employee larceny, this has non been through empirical observation demonstrated.

There has been some old research on the affair of retail employee larceny, although in recent times at that place seems to hold been a famine of involvement in this subject. For illustration, Tatham ( 1974 ) conducted a study of retail employees to find their perceptual experiences of larceny from their employers. They classified the respondents into two groups: non-takers, that is, those who do non steal from their employers ; and takers, those who engage in stealing. An interesting determination was that, though non-takers were less loath than takers to describe fellow employees who engaged in stealing, in general, there was much reluctance by employees to describe fellow employees who stole. Tatham besides found that there was small consequence of the value of the point taken on the employees ‘ admittance to stealing. Hair et al., ( 1976 ) conducted a study of some 254 retail employers to measure their perceptual experiences of, and responses to, employee larceny. They found that employers were likely to undervalue the degree of employee larceny.

As did Tatham ( 1974 ), they besides found that the value of the point taken by the employees had small consequence on the employees ‘ admittance of stealing ; nevertheless, it had a significant influence on the employers ‘ perceptual experiences of what constituted stealing. While Tatham ( 1974 ) found that some 50 per centum of employees reported stealing from their employers, approximately 80 per centum of retail merchants in the Hair et al., ( 1976 ) survey believed that employee larceny accounted for less than 2 per centum of their entire shrinking and that no more than 2 per centum of their employees stole. Other research workers engaged in this watercourse of research have looked at such issues as: forces choice and its part to decrease of employee larceny ( Brown and Pardue, 1985 ; Jones et al., 1990 ) ; the impact of merchandise designation and poster of losingss from shrinking on employee larceny rates ( Carter et al., 1988 ) ; and the usage of internal control processs to stem employee larceny ( Kennish, 1985 ; Snyder et al., 1989 ).

In more recent work, Oliphant and Oliphant ( 2001 ) used a behavior-based method in an attempt to find the degree of shrinking in a drug shop mercantile establishment in the USA, and to measure dependability of the employer ‘s estimations of the degree of shrinking. Rather than posting shrinkage information on person targeted points in the employee interruption and lunch country, the research workers posted the entire dollar sum of shrinking and the figure of points losing due to shrinkage. During the eight-week period of their survey, the shop achieved an 82 per centum lessening in the figure of points stolen each hebdomad and a 74 per centum lessening in pecuniary loss. Working in concurrence with the retail shop, these research workers were able to help with designation of and decrease in larceny of shop ware by employees.

Bamfield ( 2004 ) surveyed 476 major European retail merchants sing shrinking and found fluctuations in the shrinking rates across states. European retail merchants ranked employee larceny second among the beginnings of shrinking ( 29 per centum ), in contrast to the USA, where employee larceny was perceived by retail merchants to be the taking beginning of shrinking ( 47 per centum ). Though retail employee larceny can take many signifiers ( for illustration, giving of unauthorised price reductions, larceny of hard currency, larceny of ware, clip larceny, misdemeanor of ill leave and time-off policies, and so on ), the larceny of hard currency and ware is most profound, and, so, is the focal point of our attending.

Retailers continue to fight with this issue and go on to utilize a figure of different policies in an attempt to debar, or minimise, the job. Among the policies are: pre-employment showing ; policy and process manuals ; loss bar consciousness plans ; human resources plans, including nice retail rewards and employee inducements ; every bit good as assorted sensing processs ( National Retail Security Survey, 2003 ). In malice of these factors, retail employee larceny still continues to be the factor that contributes most to retail shrinking in the USA. Hence, there should be focus on attempts to understand retail employee larceny.

The thought of employees stealing is such a hard construct for many directors to grok that they do non utilize the words, larceny or larceny, to depict the aberrant actions of employees. Euphemistic or politically right words such as “ stock list shrinking ”, “ spoilage ”, “ pilferage ”, “ deficit ”, “ unaccounted loss ”, or “ defalcation ” are more normally used to depict employee larceny, which reflects an attitude of denial and avoids the image of condemnable activity. Because an employee is considered portion of the household, it is difficult to accept that person you hired and worked with would steal from you. When caught, employees are frequently treated less harshly than person non employed who steals from the house ( Kennish, 1985 ).

Many employers consider employee larceny as an unpreventable, unpleasant state of affairs which is merely portion of making concern ( Kennish, 1985 ). They expect employees to steal. The job of employee larceny is farther exasperated by what constitutes employee misconduct. Some employers believe a pencil here and at that place, usage of the duplicator for personal usage, or five dollars worth of long distance calls per month on the office phone are acceptable. When employers exhibit such an attitude, it establishes an organisational ambiance that direction condones employee larceny ( Kamp and Brooks, 1991 ). Therefore, employees view stealing from the company as an acceptable and justifiable behaviour. It besides makes it hard to prosecute larceny, since it is hard to find what degree of stealing is unacceptable.

Employers face the chances of traveling out of-business if they can non command the costs of lost services, hard currency, and merchandises. Statisticss provided by the US Chamber of Commerce indicate that 50 per centum of all little concern failures in the first twelvemonth of concern can be attributed to employee larceny ( Business Strategy, 1995 ). Insurance companies estimate tierce of all concern failures can be attributed to employee larceny ( Miner and Capps, 1996 ; Snyder and Blair, 1989 ; Snyder et aluminum, 1989 ; Bourke, 1992 ). The option is to develop anti-theft steps ( i.e. honestness trials, surveillance devices ) to forestall employees from stealing which so add costs to making concern. The employer must make up one’s mind which costs are greater ; to catch a stealer, or to accept it as the inevitable ( Taylor, 1986 ) and pass these costs on to the consumer by raising the monetary values.

However, to find a cost benefit analysis, one must cognize the sum of employee larceny being conducted. As stated earlier, it is hard to find the sum of concern losingss attributed to employee larceny. For illustration, in the retail sector, shrinking losingss are attributed to shrinkage, employee larceny, administrative mistake, and seller fraud. Differentiation among these classs is hard to cipher. Most companies can non mensurate the sum of employee larceny accurately and the sums that are calculated are at best, informed conjectures ( Baker and Westin, 1987 ).

Robinson and Bennett ( 1995 ) used a wide class of aberrant workplace behaviours within which larceny may be investigated. Two dimensions of aberrance, runing from child ( m ) to serious ( s ) and organisational ( o ) to interpersonal ( I ), can be combined to organize four counterproductive behaviour classs: belongings aberrance ( s, O ), production aberrance ( m, O ), political aberrance ( m, I ), and personal aggression ( s, I ). In this survey, they focused on the theoretical account dimensions of serious and minor incidents of organisational aberrance, or production aberrance and belongings aberrance. These classs subsume specific behaviours of clip larceny ( production aberrance ) and physical larceny ( belongings aberrance ).

Property aberrance includes employee behaviours that involve the unauthorised pickings, control, or transportation of money or belongings of the formal work organisation by an employee, either for the employee ‘s ain usage or for sale to another, during the class of occupational activity ( Greenberg, 1997 ; Hollinger & A ; Clark, 1983b ). It includes behaviours such as abuse of employee price reductions ; taking ware, supplies, or information for personal usage or sale ; pilfering money or production stuffs ; and falsifying clip records. The boundaries of employee larceny as defined here do non include larceny of coworker belongings.

Production aberrance includes what has been referred to as work backdown behaviour. These behaviours can take the signifier of decreased productiveness, increased absenteeism and tardiness, low occupation engagement, and low organisational committedness ( Hanisch, Hulin, & A ; Roznowski, 1998 ). The production aberrance concept besides includes behaviours such as go forthing work early and taking unauthorised interruptions ( Blau, 1998 ). Persons engage in these behaviours to maximise or keep societal and organisational functions. When these motivations conflict with formal occupation duties or when employees are dissatisfied, persons minimize clip spent on formal occupation undertakings ( Hanisch & A ; Hulin, 1991 ). Production aberrance behaviours that result in the decrease of clip working ( e.g. tardiness, absenteeism, maltreatment of ill clip, unauthorised interruptions, socialising, lounging ) are considered to be clip larceny.

Many research workers use attitudes such as dissatisfaction to foretell aberrant employee behaviour ( Bolin & A ; Heatherly, 2001 ). Harmonizing to Murphy ( 1993 ), satisfied persons tend to exhibit pro-social behaviours, whereas unsated persons tend to perpetrate Acts of the Apostless of belongings and production aberrance. Hanisch and Hulin ‘s ( 1991 ) definition of work backdown assumes that dissatisfaction is the accelerator for behaviours such as clip larceny. Persons involved in employee larceny besides are frequently involved in other aberrant behaviours ( Murphy ). Hollinger and Clark ( 1983b ) found dealingss between occupation dissatisfaction and belongings aberrance among samples of retail and hospital employees, but non fabricating employees. They besides found a important relation between occupation dissatisfaction and production aberrance ( i.e., work backdown or clip larceny ) in all three industries.

Differences between the strength of relation between satisfaction and belongings aberrance and satisfaction and production aberrance could happen because of sensed differences in organisational countenances for these behaviours. Johns ( 1998 ) suggested that work context may restrain the exhibition of one backdown behaviour while leting the look of another theoretically related behaviour. Hanisch et Al. ( 1998 ) suggested that the set of backdown behaviours that manifests as a consequence of negative occupation attitudes is a map of the state of affairs and occupation restraints. These countenances and restraints would be communicated by an organisation ‘s clime for larceny.

Harmonizing to Murphy ( 1993 ), many research workers have acknowledged the importance of situational factors to employee aberrance, but few have examined this relationship. Boye and Jones ( 1997 ) suggested that the consequence of specific facets of clime for larceny should be examined. Climate for larceny includes the chance to steal and the sensed and communicated norms of the organisation, direction, and work group. Included in these norms is the attitude toward larceny, perceived extent of coworker and direction larceny, perceived certainty of countenances for larceny, and perceived badness of countenances for larceny. Hollinger and Clark ( 1983a ) examined the conditions under which employees commit larceny. They found that the perceptual experience of certainty and badness of organisational countenances were related to employee larceny. The sensed certainty of countenances had a stronger relation with larceny than did the sensed badness of countenances. The least larceny occurred in state of affairss in which countenances were perceived as terrible and certain.

Greenberg ( 1997 ) suggested that norms, unwritten regulations that guide behaviour and contribute to an organisation ‘s clime, frequently condone or promote employee larceny. For illustration, directors who engage in larceny may set up a norm that such behaviour is tolerated. Directors besides may promote larceny by leting employees to utilize equipment and stuffs for personal usage or honoring excess behaviours with free or extremely discounted merchandises ( Greenberg ). If steal-friendly norms have been established and the organisational clime is perceived as permissive to such actions, employees may steal to suit in or acquire along with their coworkers. Consistent with this climate-based influence, Hollinger and Clark ( 1983b ) found that the influence of coworker attitudes on larceny behaviour was stronger than that of direction countenances or employee fright of reprisal.

Therefore a figure of surveies are available in US and European states about workplace larceny behaviour in retail organisations and supermarkets. But there has been limited study available on the workplace larceny behaviour in large retail organisations and supermarkets in Malaysia. In Malaysia in a survey by Zauwiyah and Mariati ( 2008 ), it has been through empirical observation tested with employees in assorted concern organisations runing from those in the managerial degree to the non-executive degree and found that the control environment has an influence on both deceitful behaviours and counterproductive workplace behaviours. Another survey in Malaysia by Ishak ( 2006 ) proved the relationship between workplace aberrant behaviour and its forecasters negative affectivity, occupation satisfaction, organisational committedness and organisational justness by analyzing the behaviour of MARA ( Majlis Amanah Rakyat-an bureau under the Ministry of Entrepreneur And Cooperative Development, Malaysia ) employees.. These surveies focused on the whole workplace pervert behaviours which include the followers:

1 ) Fraud

2 ) Vandalism

3 ) Liing

4 ) Spreading malicious rumours

5 ) Withholding attempt

6 ) Aggressive behaviour

7 ) Sexual torment

8 ) Property pervert

9 ) Information pervert

But these surveies have non studied the impact of assorted factors on the workplace larceny behaviour. Besides these surveies have non been carried out in retail concatenation organisations to happen out the employees ‘ workplace larceny behaviour. This survey will shut the research spread in the survey of workplace larceny behaviour and the consequence of internal control systems in supermarkets in Malaysia. The survey will besides add significant stuff to cognize the relationship between important factors lending the workplace larceny behaviour and the needed internal control systems in the supermarkets in Malaysia to prevent/reduce workplace larceny and to better the net incomes of the big retail concatenation organisations.

1.4 JUSTIFICATION FOR RESEARCH

At present there are surveies on the workplace aberrant behaviours but there is nonentity of surveies on the retail larceny behaviour in large retail concatenation organisations like supermarkets in Malaysia. This research will shut the research spread in the survey of retail larceny behaviour and internal control systems in supermarkets in Malaysia which accounts for more than 50 % of retail gross revenues of the state. The survey will besides add significant stuff to cognize the relationship between important factors lending to the purpose to steal and the needed internal control systems in the supermarkets in Malaysia to prevent/reduce retail larceny behaviour and to better the net incomes. The donees of this survey would be Supermarkets, Hyper markets, and large retail concern organisations in Malaysia.

This research can be justified on three evidences as shown in Figure 1.1.

Figure 1.1 Justifications for Research

Beginning: Developed for this Research

There are three justifications for this research:

1. Gap in bing cognition

2. Importance to place retail larceny behaviour to better the profitableness of retail concatenation Organizations.

3. Contributions of this research.

1.4.1 Gap in Existing cognition

Existing literature is unequal to reply the research job workplace larceny behaviour in big graduated table concatenation organisations like ace markets in Malaysia. Besides there is deficiency of equal literature look intoing the function of internal control systems to prevent/reduce the workplace larceny behaviour in large retail organisations as shown in Table 1.2.

Table 1.2 Gaps in Existing Knowledge on workplace larceny behaviour.

Focus

Existing Literature

Gap

1. Workplace theft behaviour in large retail organisations like supermarkets in Malaysia.

Studied aberrant behaviour of employees at workplace ( Zauwiyah and Mariati ( 2008 ) and Ishak ( 2006 )

No separate survey on the workplace larceny behaviour conducted in Malayan retail organisations

2. Significance of Individual and other organisational variables on workplace larceny behaviour in large retail organisations like supermarkets in Malaysia.

Existing surveies considered assorted act uponing factors on workplace aberrant behaviour.

No sole survey available on Individual and other organisational variables on workplace larceny behaviour in large retail organisations like ace markets in Malaysia.

3. Impact of Internal control systems in supermarkets in Malaysia.

Existing literature proved the direct and negative relationship between internal control systems and workplace aberrant behaviour.

No survey on the impact of the powerful tool Internal control systems as a chairing variable between assorted single and organisation factors and workplace larceny behaviour to prevent/reduce the workplace larceny behaviour in large retail organisations like supermarkets in Malaysia.

1.4.2 Importance of the internal control systems

The internal control systems comprise policies, patterns, and processs employed by the organisation to accomplish the aims of the concern. The internal control systems act as a shield that protects the house ‘s assets from legion unwanted events that bombard the organisation. These include inside employees ‘ workplace larceny, client larceny, efforts at unauthorised entree to the house ‘s assets ( including information ) ; fraud perpetrated by individuals both inside and outside the house ; mistakes due to employee incompetency, faulty computing machine plans and other arch Acts of the Apostless.

The absence or failing of a control is called an exposure. Exposures, which are illustrated as holes in the control shield as given in the undermentioned Figure 1.2, increase the house ‘s hazard to fiscal loss or hurt from unwanted events.

Figure 1.2

Beginning: James A Hall, ‘Accounting Information Systems ”

Therefore a failing in internal control may expose the house to one or more of the undermentioned types of hazards.

Destruction of assets ( both physical assets and information.

Larceny of assets like hard currency and ware,

Corruptness of the information or the information system.

Break of the information system.

The internal control shield is composed of three degrees of control:

preventative controls,

investigator controls, and

disciplinary controls.

Preventive controls are inactive techniques designed to cut down the frequence of happening of unwanted events. Preventive controls force conformity with prescribed or desired action and therefore test out deviant events. When planing internal control systems, an ounce of bar is more surely worth a lb of remedy. Preventing mistakes and fraud is far more cost-efficient than observing and rectifying jobs after they occur.

Detective controls organize the 2nd line of defence. These are devices, techniques, and processs designed to place and expose unwanted events that elude preventative controls. Detective controls reveal specific types of mistakes by comparing existent happenings to pre-established criterions.

Corrective controls are actions taken to change by reversal the effects of mistakes detected in the old measure. There is an of import differentiation between detective controls and disciplinary controls. Detective controls identify anomalousnesss and draw attending to them ; disciplinary controls really fix the job.

1.4.3 Employee fraud and direction fraud

Any organisation brushs fraud at two degrees: employee fraud and direction fraud. Employee fraud or fraud by non-management employees is by and large designed to straight change over hard currency or other assets to the employee ‘s personal benefit. If the company has an effectual system of internal control, defalcations or peculations can normally be prevented or detected.

Management fraud is more insidious than employee fraud because it frequently escapes sensing until the organisation has suffered irreparable harm or loss. Usually direction fraud does non affect the direct larceny of assets. Management fraud is perpetrated at degrees of direction above the one to which internal control structures by and large relate.

Therefore an effectual internal control system plays an of import function in preventing/reducing the workplace larceny in any retail concatenation organisations like super markets.

1.4.4 Contributions of the Research

The parts of this research are shown in Table 1.3.

Table 1.3 Research aims and Contributions

Aims

Contributions

To place the possible grounds taking to the purpose to steal by the employees in supermarkets in Malaysia.

Develops tools to assist the large retail concatenation organisations to place the grounds taking to purpose to steal by the employees in supermarkets in Malaysia.

2. To happen out the relationship between the single factors and the purpose to steal in supermarkets in Malaysia.

Develop tools to assist to place the relationship between the single factors and purpose to steal in supermarkets in Malaysia.

3. To happen out the relationship between the organisational factors and the purpose to steal in supermarkets in Malaysia.

Develop tools to assist to place the relationship between the organisational factors and purpose to steal in supermarkets in Malaysia.

About 75 % of retail gross revenues of Malaya are done by the supermarkets, hypermarkets and promenades. Holocene survey has shown there is retail shrinking of 0.344 % due to employee larceny. Out of the estimated one-year retail gross revenues of RM 85.3 billion in 2008, the loss due to workplace larceny is estimated to be 29.34 million. This survey identifies the effectual internal control steps to prevent/reduce the workplace theft behaviour thereby to salvage immense sum by the large retail concatenation shops.

4. To happen out the relationship between the purpose to steal and the workplace theft behaviour of the employees of supermarkets in Malaysia.

Develop tools to assist to place the relationship between the single factors and purpose to steal in supermarkets in Malaysia.

5. To find the moderating effects of internal control systems between the purpose to steal and workplace larceny behaviour of the employees in supermarkets in Malaysia.

Develop tools to happen out the chairing effects of internal control systems between the purpose to steal and workplace larceny behaviour of the employees in supermarkets in Malaysia.

6. To place the effectual internal control systems to prevent/reduce employee larceny in supermarkets in Malaysia.

Above 50 % of retail gross revenues of Malaya are done by the supermarkets, hypermarkets and large retail concatenation organisations. Recent survey has shown there is retail shrinking of 0.341 % due to employee larceny. Out of the estimated one-year retail gross revenues of RM 122.54 billion in 2009, the loss due to workplace larceny is estimated to be RM41.81 million. This survey identifies the effectual internal control steps to prevent/reduce the workplace theft behaviour of the employees in ace markets in Malaysia thereby to salvage immense sum by these large retail concatenation organisations.

1.5 WHAT ‘S NEW IN THIS RESEARCH

While employee larceny has ever been dearly-won to concerns, the enhanced security clime in recent times has made this subject more of import than of all time. While a great trade is known about single and situational factors associated with employee larceny, anterior researches have failed to develop and prove a comprehensive theoretical account of workplace larceny. Many of the surveies covering with employee larcenies have examined merely a few correlatives of employee larceny at the same time ( e.g., Greenberg, 2002, Weber et al., 2003 ) instead than including multiple correlatives and proving them consistently.

Besides many research workers have studied internal control systems merely as an independent factor instead than as a moderating factor. Internal controls are the methods employed to assist guarantee the accomplishment of an aim. They are tools used by Directors every twenty-four hours. Writing processs to promote conformity, locking office to deter larceny, and reexamining monthly statement of history to verify minutess are common internal controls employed to accomplish specific aims. All Managers, from unit degree to the President usage internal controls to assist guarantee that their units operate harmonizing to program. Internal control is the organisational program and all the related steps designed to:

Safeguard assets: A company must safeguard its assets ; otherwise it ‘s throwing off resources.

Promote employees to follow company policy: Everyone in an organisation needs to work toward the same end.

Promote operational efficiency: The resources can non be wasted. The waste should be eliminated and net incomes increased.

Ensure accurate, dependable accounting records: Good records are indispensable. Without dependable records, it can non be considered which portion of the concern is profitable and which parts need betterment.

This survey seeks to develop a holistic model integrating the internal control systems as a interceding factor between the purpose to steal and workplace larceny behavior.

Specific differences between this survey and old surveies for the workplace larceny behavior are outlined in Table 1.4.

Table 1.4 Comparing past surveies with this survey

Model

Previous surveies

New in this survey

Ancestors: Purpose to steal.

Measured purpose to steal from single and situational positions. ( McClurg, L.A. and D.S. Butler,2006 ).

Measures purpose to steal from single and organisation positions.

Dimensions: Internal

control systems

Investigated the workplace theft behaviour sing internal control systems as one of the independent variables foretelling purpose to steal..

Investigates the workplace theft behaviour sing internal control systems as a moderating factor for the purpose to steal to convey down the workplace theft behavior.

Consequences: workplace theft behavior.

Investigated the relation between workplace larceny behavior and purpose to steal without any moderating variable.

Investigates the relation between workplace larceny behavior and purpose to steal moderated by internal control systems,

1.6 ORGANIZTION OF THE THESIS

This survey is organized into sis chapters as shown in Figure 1.4.

Figure 1.4 Outline if the thesis

Chapter 1 introduces the research job and its significance.

Chapter2 presents a reappraisal of the literature taking to the theoretical model and hypotheses for the research issues.

Chapter 3 describes and justifies the methodological analysis that includes research design, trying technique, questionnaire cogency and dependability and informations analysis scheme.

Chapter 4 presents the research findings.

Chapter 5 discusses the findings and suggests managerial and theoretical deductions. and

Chapter 6 concludes the thesis with parts, restrictions and recommendations for future research

1.7 DEFINITION OF TERMS

The followers are the definitions of cardinal words used throughout this thesis.

The research worker refers the undermentioned definitions unless otherwise specified.

Work topographic point refers to retail floor.

Employee is worker or employee working in retail floor.

Larceny means stealing of money or ware.

Supermarkets and Malls refer retail shopping superstores with a retail shopping country of more than 50,000 sf.

1.8 Summary

This chapter described the background to this research, the cardinal research job, issues and aims, justifications for the research and definitions of footings used. Chapter 2 reviews the literature on Individual factors, Organization factors, purpose to steal, internal control systems and workplace larceny behavior and describes the hypotheses on their relationships in the proposed theoretical model

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