Or does most of the alleged fraud in business disputes actually exist? I like this interesting piece in MT about how the blueprints for fraud might be found within an organisation's own processes... but as a mediator, I have a different perspective.
"Fraud!" is a frequent accusation I hear get hurled across the table from one side to another in the heat of conflict.
"What have you done about the criminal offence you suspect?" I ask.
Silence is predictably the reply because misunderstandings and mismanagement can often look like fraud when viewed through the prism of a business-to-business dispute. Yet when one looks for the fraudulent intention in such cases, let alone the evidence, it is not there.
Of course, we must all remain alert to the possibility of fraud in business relations and our own organisations (and indeed have a responsibility to do so) but we must also, when there is a lack of any evidence, read between the lines and start conversations to see what else might be going on.
The reason why is that management and fraud are both driven by the same problem of information economics – the problem of taking the complexity and variation of any business more complicated than a lemonade stand, and reducing it down to something that a single individual can hold in his or her head. Or in other words, to literally ‘make it manageable’. You can't observe everything that you are responsible for, and every decision about what you are going to check up on is, necessarily, also a decision about what you are not going to check up on. Consider the case of the Great Salad Oil Scandal, for example.