Business and Organizations
Crime can affect businesses in different ways. The first is the direct, when the business is the victim of the crime. This can take the form of either employee or nonemployee crime. In an employee crime, the employees of a business are committing crimes against that business. Employee crime can include stealing money or items from the company, not ringing up sales or intentionally incorrectly charging customers, and embezzling (an employee takes money from business accounts). According to Statistics Brain (2017), thefts by employees cost businesses around $50 billion annually.
A nonemployee crime occurs when someone not associated with the business or organization commits a crime against that business. Theft is one of the greatest problems, especially for small businesses, where even the loss of candy bars over time damages the viability of the business. Breaking and entering and robbery also affect businesses because they often involve property damage, which may cause disrupt business. According to the National Retail Federation (2017), missing inventory accounted for 36 percent of all theft. The loss of retail goods is called shrinkage and is estimated by the U.S. Retail Fraud Survey to cost around $60 billion annually. In addition to the actual theft, the cost of trying to prevent theft also affects companies’ bottom line.
Another type of nonemployee crime is a newer, growing issue: cybercrime against businesses. These are crimes in which the criminal uses technology such as computers and the Internet to target a business. As discussed in Module 1, cybercrime has become a major issue for both companies and individuals. Forbes estimates that cybercrime will cost businesses around $6 trillion annually through 2021 (Eubanks, 2017). In addition to the direct loss of information, t trust in the company’s ability to fend off criminals also decreases, which further negatively affects the company.
All of these are ways that crime causes direct costs to companies and organizations. Indirect effects on businesses occur through victimization of employees and employee families. As discussed earlier in this module, victimization often results in lost wages (time away from work), which affects productivity, which also hinders businesses’ ability to be successful. When employees are experiencing mental and physical health issues, they are not able to focus on their jobs, which causes a sort of secondary victimization to the places where they work.