Whistle Blowing - Essay Example

Whistle Blowing 25 October 2009 Introduction Whistle-blowing is in the news as scandal after scandal hugs the headlines. In some respects, this practice has been overtly beneficial by uncovering and exposing to full public view and knowledge unsavory things that are kept hidden inside most business organizations today. Corporate social responsibility and transparency are the very antidotes to all the dirty things happenings in some corporations which otherwise would not come to light. Before going further, a conceptual definition of whistle-blowing is presented to the reader. It pertains to the reporting by a concerned person about what he or she thinks are illegal, immoral or illegitimate practices (activities or willful omissions). This widens the essential elements that trigger whistle-blowing because in a much broader sense, there are many situations where an action might be legal but considered as immoral, unethical or illegitimate in its totality. The euphemism of whistle-blowing refers to the deliberate disclosure by current and former members of an organization of illegal, immoral or illegitimate practices and actions under the control of their employers to another person or organization that may be able to take an effective course of action against it (Miceli, Dworkin & Near 2008, p. 5). A corollary issue that goes with whistle-blowing is whether whistle-blowing is effective or not. In many cases, people who report on their own organizations felt they are being targeted for retaliation. On their part, whistle blowers view their actions as a pro-social concerned behavior. Those who take the step feel ostracized, criticized, shut out, abused and fired (Hall 2000, p. 195). Most organizations are in a dilemma: the need to know precisely what is going on but sometimes punishing the very same people who took the courageous task of reporting unsavory practices. Discussion In retrospect, I would probably not blow the whistle considering what was at stake for me personally. By staying silent, I am just a month shy from collecting or exercising my stock rights which is a substantial windfall for a new struggling employee like me. This is but very natural human reaction and 100,000 shares of steadily rising Enron shares will vest soon in a short time which is not exactly peanuts. Secondly, and perhaps a far stronger reason for opting to stay silent, is that I had probably done (in my limited view and position within the firm’s organizational hierarchy) already what was required of any normal person under exactly the same circumstances I had found myself in. I had written a memo to the firm’s CFO about the potential for fraud regarding the practice of transferring debts to bloat income figures which is considered adequate under the prevailing situation. It would probably be hypocritical to say otherwise, considering all that had happened ever since the discovery of “creative accounting” practices at the company. A third consideration for not reporting these practices is the concern, often unexpressed by whistle blowers, regarding the legal implications of their actions. There are three important laws passed regarding whistle blowing. These are the SOX (Sarbanes-Oxley Act of 2002), adoption of a False-claim Act by most states and in general, spread of whistle-blowing laws around the world due to globalization. As a summary, these laws can be categorized into two types: the first kind protects whistle blowers from expected retaliation and the second group belong laws that encourage whistle blowing by incentives. It is equally important to bring up at this point the two kinds of whistle-blowing that normally occur today: internal and external. The first involves reporting wrongdoing to the firm’s authorities while the second is bringing the issue to public authorities concerned or in most cases, to the media to gain immediate widespread attention. The motivation could also be two-fold: one that is morally justified or permitted and the second where whistle blowing is morally required (de George 1982, p. 161). Mere silence would not do in the second case. Kantian Moral Theory Immanuel Kant developed his own moral theory which essentially says that any of the consequences of an action are not relevant. In simple terms, what it is about is doing the right thing no matter what. This theory is direct opposition to the more common Utilitarian Moral Theory which places greater importance to utility or usefulness, hence the derived name. In light of the Enron case, my failure to report what I had heard in the garden would be a gross abdication of my moral obligation to tell responsible authorities about what I now know for sure regarding some questionable practices at the company. Previously, my written memo to the CFO was merely for expressing my suspicions without a shred of solid proof. The events at the garden had shown without a doubt that something not right was going on at the firm and I should now have to report about it since there is now certainty. No less than the CFO had been heard to discuss it with a ranking officer from the external auditing firm hired by Enron. If we now use Kant’s Moral Theory, I will have to make a report, no matter what the consequences, such as me not getting the stock options I worked so hard for or even much worse, getting fired outright. Losing my job would be little consolation but a greater relief is the belief that I had done right by the circumstances. Utilitarian Moral Theory Using this theory, I would end up not blowing the whistle due to a conflict of interest on my part. Utilitarian Moral Theory would compel me to remain silent because of the severe adverse consequences of my action – I will lose those stock rights and most probably my job. My foremost consideration now would be self-preservation which jives with the Utilitarian theory in the sense that I will be happier to have kept my job and also getting those options. In short, Utilitarianism dictates we need to be practical in most matters and who cares about this whole business of whistle blowing if it will just lead to my getting fired from a desired job? In most cases, people would prefer this theory because it is very convenient for them to decide. Virtue Theory This theory of morality puts a greater emphasis on the agent’s character or behavior. In other words, it is not overly concerned with consequences of an act (Consequentialism or Utilitarianism) or the very nature of the act itself (Kantian moral theory or deontology). This theory brings into question my own set of personal values such as what I consider personally to be right or wrong pertaining to the Enron case. The value of this theory to modern societies is it will be helpful in bringing out those skeletons in the closet which would otherwise not be known if not for some individuals who feel virtuous enough to divulge the details of any kind of wrongdoing they may happen to witness in their workplaces. This theory of morality makes it easier for potential agents to decide when confronted with moral cases; but that said, a lot of what happens next depends on the kinds of virtues these agents may possess. As a corollary, a question that begs to be asked is what virtues are necessary or even desirable? Any person that heard what was said at the garden will have no choice but to report such egregious behavior. Virtue theory brings us back to the choice between what is morally justified and what is morally required because it is now the agent’s (whistle blower) personal set of values that helps him or her decide on the best course of action to take. A further consideration here is the potential harm that can be caused either to the organization or to the whistle blower or both. It is the eminence of the harm caused by the wrongdoing that is often the deciding factor which will sway action taken over another; that is, the harm referred to here is to society in general. Conclusion Whistle blowing can be said to be a double-edged sword. From the organization’s viewpoint, knowing what is exactly going on inside is helpful to improve performance while it frowns on the act itself because it is almost synonymous with betrayal of the firm’s trust. In his seminal book, Boatright argues (quite correctly) that whistle blowing should be treated in an integrative manner; combining legal, economic and moral viewpoints (Boatright 2002). Reference List Boatright, J. R. (2002). Ethics and the Conduct of Business. Englewood Cliffs, NJ: Prentice-Hall. DeGeorge, R. T. (1982). Business Ethics. New York, NY: MacMillan Company. Hall, R. T. (2000). An Introduction to Healthcare Organizational Ethics. New York, NY: Oxford University Press US. Miceli, M. P., Dworkin, T. M. & Near, J. (2008). Whistle-blowing in Organizations. Boca Raton, FL: CRC Press. Read More