Type of Wrongdoing and Whistle-Blowing: Further Evidence That Type of Wrongdoing Affects the Whistle-Blowing Process

Article excerpt

Recent scandals in a variety of firms and industries have increased the salience of ethical conduct in business. Indeed, public perceptions of the extent of corporate malfeasance have raised questions about the ethical reasoning and the conduct of senior managers as well as the values taught to them in business schools. (1)

Although acting ethically has clear benefits to employees, other important stakeholders, and to the firm pressures for performance and/or the desire for personal gain have led individuals in both public and private sector organizations astray (2) While there has been renewed interest in fostering ethical behavior in organizations through codes of conduct and/or employee training (3,4) there has also been increased interest in what happens to employees when they discover and report unethical or illegal activity; that is, whistle-blowing. (5)

Perhaps one of the most vexing issues in recent scandals in large firms such as WorldCom, Enron, and Tyco is the nagging question of how this highly unethical conduct was allowed to continue. Why wasn't it was discovered and reported much sooner? Why weren't external oversight agencies more vigilant?

As whistle-blowers can be viewed as a "last defense" against wrongdoing in organizations, it is important to understand the process and the consequences of whistle-blowing from both an academic and a practitioner's perspective. With regard to the former, there is a fairly extensive body of research on the topic of whistle-blowing, Interest has been in hypothesized antecedents of whistle-blowing including contextual, personal and situational variables; that is, theory and research have focused on who blows the whistle and why they do it. (6) There has also been some interest in the consequences of whistle-blowing with respect to experienced retaliation. (7,8)

As is often the case with a maturing research area, while there has been good progress, there are gaps as well; that is, issues that have been overlooked by prior research studies or topic areas that are under-researched. One such under-researched topic area appears to be the potential influence of the type of organizational wrongdoing on whistle-blowing. Most studies have treated observed wrongdoing as monolithic, but some preliminary evidence suggests that this might not be the case. (9) More specifically, it has been suggested that explicit consideration of the type of wrongdoing observed is germane to understanding the whistle-blowing process. This study is intended to help fill a potential gap in whistle-blowing research, and is focused on if and how the type of wrongdoing observed affects the propensity to report it and the consequences of doing so.

Whistle-Blowing and the Whistle-Blowing Process

Whistle-blowing has been defined as "the disclosure by organization members (former or current) of illegal, immoral or illegitimate practices under the control of their employers to persons or organizations that may be able to effect action." (10) This definition has been recognized as the most widely accepted definition of whistle-blowing and it is used to frame whistle-blowing in this study. (11)

How whistle-blowing is defined is important because the definition of the construct frames the development of conceptual models and by extension sets the direction of subsequent empirical research. Several key properties are evident in the definition cited above. The first is the motivational basis for reporting wrongdoing which is predicated on remedy; (12) that is, as defined here, whistle-blowers are faced with a situation that is morally unacceptable and are seeking remedy thereby differentiating it from informing. Second, whistle-blowing is grounded in a moral or ethical imperative that goes beyond violations of laws and policies. (13) That is, whistle blowing encompasses activities that are seen (by the whistle-blower) as wrong. Finally, this definition suggests that whistle-blowers have a reasonable expectation that remedy is likely. …