Whistleblowing in Organizations - Essay Example

Whistleblowing in Organizations Introduction In the 1980s, the term a ‘whistleblowing’ began to emerge as important element to help organizations to do business in transparent as well as ethical manner (Keil et al., 2010). In the last 30 years, importance of the issue of ‘whistleblowing’ has increased manifold due to increasing interventions of financial scams, corporate frauds, accounting mal practices, unequal treatment for employees and many others (MacNab and Worthley, 2008). While conducting research on the topic, Vandekerckhove and Lewis (2012) found that ‘whistleblowing’ is more of individual driven perspective rather than organizational perspective. Due to immense importance of ‘whistleblowing’ in modern day business organization, the study has selected the topic as central theme of this paper. Discussion In general, whistleblowing is conceptualized as behaviour and action of organizational individuals against organizational wrongdoing (Bjorkelo, Einarsen and Matthiesen, 2010). Whistleblowers are insiders or organizational well wishers or committed employees who genuinely want to rectify explicit as well as implicit organizational wrongdoing by raising their concern regarding the issue in public. According to Jubb (2000), individual whistleblower may need to put unsuccessful earlier efforts in order to attain a hearing as well as remedial action implemented through organizational channels. Interesting fact is that different scholars examined whistleblowing from different perspectives and these scholars found it difficult to establish a standardized definition of the concept (Erkmen, Calıskan and Esen, 2014). Qusqas and Kleiner (2001) tried to identify the source of the term ‘whistleblowing’ and they found that the term is derived from the sporting events where the referee blows whistle in order to stop illegal playing actions or malpractices of players. In organizational context, whistleblowing means reporting of wrongdoing by set of employees or any other internal stakeholders with the intention of stopping it (Park, Rehg and Lee, 2005 and Park et al., 2008). Application of whistleblowing in organizations can have multiple perspectives and this is the reason why theorists and scholars found it difficult to establish a standardized definition of the concept (Robinson, Robertson and Curtis, 2011; Shawver, 2008). According to Robinson, Robertson and Curtis (2011), whistleblowing intentions of individuals can be affected by multiple factors like unethical practices of organizations, illegal or dubious management procedures; malpractices of agents, financial irregularities performed by key management people, accounting scandals, employee discriminations, deviation from following corporate governance norms and others. Courtemanche (1988) defined whistleblowing as voluntary process where organizational individuals report against illegal or improper activities of target organization. Nader, Petkas and Blackwell (1972) defined whistleblowing as an attempt of women and men in order to refrain organizations from involving in corrupt, fraudulent, illegal or detrimental activities. Teo and Caspersz (2011) also perceived whistleblowing as outcome of social as well as ethical concern of organizational members. Due to lack of standardized definition of whistleblowing and broad social as well as ethical aspects of the concept, it becomes difficult for scholars to establish precise theories regarding whistleblowing. In such context, Dasgupta and Kesharwani (2010) tried to theorize the concept of whistleblowing by picking up four sub elements. Sub element 1: the whistleblower or the person who shows genuine concern over malpractices of the organization. Sub element 2: the wrongdoing or the complaint that is being reported. Sub element 3: group of people or the organization in general that is committing the malpractices or wrongdoings. Sub element 4: the party or the institution that is receiving the complaint of wrongdoing or reports from whistleblowers. On the other hand, Park, Rehg and Lee (2005) found four types of responses of employees to wrongdoing such as, 1- do nothing and wait for others to raise voice, 2- talk to other employees, 3- report internally and 4- report in public. Actually, in context to literature regarding whistleblowing, only fourth form of response of employees is relevant. Read and Rama (2003) found two major categories of whistleblowers such as internal and external. In case of internal whistle blower, organizational individuals furnish complaint of wrongdoing to top level management or immediate managers. In case of external whistle blower, any external law enforcement agency or government furnish complaint of wrongdoing of a respective organization. According to Dasgupta and Kesharwani (2010), apart from some exceptions, internal whistleblowers are far more aware of unethical or illegal practices of organization rather than external whistleblowers. Despite greater awareness, internal whistleblowers face hesitance in blowing the whistle due to their fear of aftermath of blowing the whistle. Effective internal whistleblowing can be done through confidential hotlines or through anonymous reporting or through internal submission of reports. De Maria (1994) and Miceli, M. Near and Dworkin (2008) argued that effective internal whistleblowing can not only stop wrongdoing but also boost up profitability of the firm by saving its reputation. According to internal disclosure policy, every organizational member is responsible in communicating their knowledge of wrongdoing to responsible authorities and organizational leaders. Socially responsible organizations take different steps in order to create scope for effective internal whistleblowing such as, 1- setting up appropriate as well as transparent communication channels for organizational members, 2- guaranteed protection for employees or whistleblowers who raise concern regarding suspected wrongdoing in good faith and 3- establishing flexible organizational environment for formal investigative procedures against suspected wrongdoing. (Erkmen, Calıskan and Esen (2014, p. 231) defined characteristics of whistleblower such as; “The whistleblower is a concerned citizen....pre-dominantly motivated by notions of public interest, who initiates of his own free will, an open disclosure about significant wrongdoing directly perceived in a particular occupational role, to agency capable of investigating the complaint.” Now the question is whether whistleblowers get sufficient positive outcome for taking the honest and socially responsible initiatives or not. A socially responsible organization ensures positive consequences for whistleblowers upon whistle blowing (Shawver, 2008; Tsahuridu and Vandekerckhove, 2008). For example, socially responsible organizations may provide reward and recognition to whistleblowers or take investigative actions on the basis of report of the whistleblower. In case of organizations with inflexible and unethical business practices, action of whistleblower is being seen as violation of commitment and loyalty towards the company (Larmer, 1992; Zhang, Chiu and Wei, 2008). Mesmer-Magnus and Viswesvaran (2005) found that corrupt business leaders fear that report of whistleblower may not only challenge the organizational hierarchy but also legal proceedings against them. Therefore, in this type of corrupted organization, organizational leaders (who are also involved in wrongdoing) do not welcome report of whistleblowers. As a consequence of whistle blowing, corrupted and unethical organization leaders may implement types of retaliation on whistleblowers such as isolation, nullification, expulsion or defamation (Kaptein, 2011; Vandekerckhove and Lewis, 2012). Whistle Blowing: Position of Business Organisations In the above section, the paper has covered theoretical aspects of whistle blowing and such discussion has helped in developing theoretical background of further discussion. While analyzing the issue of whistle blowing in context to real world organizations, the study has found two distinct cases where theoretical aspects of the concepts have been implemented in practical business scenario. Case 1: recently, a senior engineer of Rolls-Royce blew the whistle on allegation that company is not following ethical standards while manufacturing jet engines. According to the whistleblower, Rolls-Royce is doing suspicious activity regarding raw material sourcing when it comes to manufacture jet engines. The whistle blower also stated that Rolls-Royce is trying to hide potential faults in its jet engines. As a response measure, Rolls-Royce terminated the whistle blower and showed “unacceptable behaviour” as cause of termination for Hilmi Kurt-Elli (the whistle blower). Hilmi Kurt-Elli has moved to employee tribunal court stating that Rolls-Royce terminated him as punishment of whistle blowing (Neate, 2014). Case 2: During 2009, An NHS worker (Sharmila Chowdhury) blew the whistle on allegation that senior doctors of Ealing Hospital NHS Trust were moonlighting at private hospitals despite being paid for diagnosing NHS patients (Lakhani, 2010). The whistleblower reported to most senior managers regarding private practices of doctors who were dishonestly earning money every month. Although, senior doctors of Ealing Hospital NHS Trust forced termination of the whistle blower but at later stage, Sharmila Chowdhury won the case in the court against senior doctors of Ealing Hospital NHS Trust. As a consequence, Ealing Hospital NHS Trust had disbursed the full salary to the whistleblower and the whistleblower was reassigned to her previous job responsibility. Conclusion It is evident from the above discussion that socially responsible organisations need to protect as well encourage whistleblowers to raise voice against unethical practices and suspicious wrongdoings by senior employees or any other employees. Socially responsible organisations should regard whistleblowers by using 3 way mechanisms such as, 1- establishing protective company level as well as legal framework for whistle blowers, 2- setting up appropriate as well as transparent communication channels for whistle blowers so that they can raise their concern and 3- joining whistleblowers in formal investigative procedures in order to fight against suspected wrongdoing in efficient manner. 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