Business Case Studies,Corporate Governance & Business Ethics Case Study, Flour Corp's Business Ethics Practices: Creating Six Sigma Standards in Staying Corruption-Free

Code : GOV0032

Year : 2009

Industry : Not Applicable

Region : India

Teaching Note: Available

Structured Assignment : Available

Abstract: This case study’s primary objective is to analyse the prerequisites for containing corporate frauds. Since 1990s, frauds in organisations have increased worldwide irrespective of size and nature of business. Corporate frauds ranging from employee fraud, consumer fraud, vendor-related/third-party fraud, computer fraud and financial reporting fraud have crept into all sectors. For reasons like inadequate penalties, inefficiency of the judiciary system and inadequate financial benefits, corporate fraud continues to threat organisations worldwide. Why are corporates struggling to combat fraud when measures available are ample?

In India, corporate fraud ranks high with 42% of the companies experiencing it. While suppliers’ kickback is the most prevalent form of fraud, it percolates in every possible form. Everyday, fraudsters come up with new modes of committing fraud. On an average, Indian companies incur a direct loss of $1.5 million. However, in spite of the heavy risk and cost involved, companies are barely equipping themselves with better strategies. Among other measures, companies are adopting employee registry, background check and biometric identification. Are these measures sufficient to combat the menace of corporate fraud? The case explores into the do’s and don'ts that corporate India needs to do to minimise corporate fraud in India.