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How a poor company culture can foster employee fraud

Your company culture underpins everything you do – it’s your ‘DNA’ – it’s what makes you unique. This influences how your team and customers view your business.

If your company culture isn’t right for your team, it can have a devastating financial impact on your business. Poor company culture can demoralise a team, restrict business growth and (without realising it) foster an environment at high-risk of employee fraud.

Ultimately, your culture is driven by your leadership.

Employee pressure

If an employee begins to feel under pressure as a direct result of their working environment – typically in situations where unattainable targets are set – they may begin to feel demotivated or disenchanted. This, in turn, can lead to an unhealthy working environment as well as prompt out-of-character behaviour.

One of two things can happen: they may choose to leave (meaning your business has lost valuable talent) or they become disengaged from your business.

Types of leadership styles that can create a poor company culture:

The autocratic leader

This leader is happiest when in complete command and control of their team, dampening creativity and team morale.

The clock-watcher

The clock-watcher rigorously monitors employee performance based on the times they arrive and leave. The focus is on ‘the hours you put in’ not ‘what you put into the hours’.

The absent leader

Either physically or psychologically absent, this leader may be too busy to monitor employee performance closely enough.

Preventing the occurrence of fraud – a balancing act

It is important to find the right balance between these different leadership styles in order to develop a company culture that works for both you and your team.

If you create a great company culture, then the rest of your business will fall into place.

To find out more about how your business can best protect itself from fraud, get in touch.

Or, to read the full article in HR Magazine click here.

Published on December 15, 2020

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