The paper "Fraud at Wipro" is an outstanding example of a management assignment. While the worldwide financial crisis has compelled firms to stiffen their belts, some workers also experience the same pressure and are using their employers to source for easy money. Employees’ fraud is on the rise and 93% of Indian banks indicate a rise in cases of fraud. Wipro realised that an internal finance department employee de-frauded the firm about 4 million dollars over an extended period. The company realised the fraud when it received an overdraft note which did not tally with bank book.
Given the rise in employees’ fraud, there are calls for a better comprehension of fraud detection and prevention. This paper assesses the fraud at Wipro, highlight control problems that facilitated the fraud, strategies that Wipro needs to eradicate the possibility of internal fraud, feedback control checks to ensure strict adherence to the implemented strategies and potential impacts of poor control procedures for Wipro and other organisations in India. What are the types of control not being carried out effectively in Wipro and other it companies in India: give examples of these control problems areas from the case study. The fact that the employee in Wipro managed to steal from the company for three years indicates that there are major control problems in the company.
The types of control include the feedforward control, concurrent control and feedback control. Had the company implemented effectively the feedforward control, the embezzlement would not have occurred. This is because the feedforward control centres on the regulations of input to ensure that inputs attain the principles set by a firm.
The inputs subject to feedforward control include time, finances and other organisational resources. Feedforward control helps in preventing difficulties that may face the company (Bartol, Tein, Matthews, Sharma and Ladal 2011:427). Feedforward control prevents problems from arising since it precedes the actual organisational activities. Wipro took pride in its process integrity, ethics and value system of its workers. Given its image and the trust it had on its employees, it did not notice the fraud until after three years. The feed-forward control helps firms in anticipating problems before they arise. Wipro lacked concurrent control that entails regulating ongoing activities of a firm as a portion of the change process.
Concurrent control ensures that the ongoing actions of a firm conform to the firm’ s standards. Bartol et al (2011:427) assert that concurrent control identifies complexities in firms’ procedures which could mean faulty output. The fact that the fraud at Wipro took several months unnoticed implies that the firm lacked this type of control. With respect to concurrent control, the firm can establish lock-out options on the computers besides using corporate hotlines for reporting. The concurrent control provides immediate feedback to managers on how efficiently resources are being used. Wipro lacked feedback that ensures that a firm’ s products attain organisational goals and standards.
Feedback control serves as a final check for earlier undetected deviations. The reality that the employee at Wipro de-frauded the company 4 million dollars in small portions for an extended period, indicates the company lack of effective feedback control. The period taken by the employee was long enough for the firm management to have detected the irregularities. Feedback control helps firms in ascertaining undetected deviations such as the inaccuracies in the company’ s bank account.
The feedback control would have helped in monitoring how the firm’ s finances are being used and for what activities they are used for.
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