Scenario #5: Whistleblowing: Code Red or Red Ink?
I. Introduction
This scenario depicts a perceived ethical dilemma for an employee who has
discovered information about a client that could be putting human lives in danger.
His management wants to delay any action on the matter until future investor
funding is secured. This scenario may be used for instructors teaching
Management because it presents a challenging problem for a middle manager in
an ethical bind and caught between two opposing points of view from the levels
above and below her.
II. Learning Objectives
1. To assess student’ understanding of the role of the middle manager when faced
with difficult ethical dilemmas.
2. To analyze Whistleblower statutes and understand their purpose and value for
employees and managers.
III. Scenario Description:
Overview: An employee at a hospital management company files a report with
his supervisor on patient injury and death caused by staff errors. There is an
investor meeting scheduled for one month following receipt of the report and our
manager has been told by her superiors not to release the report until after that
meeting. The employee who created the report disagrees with this decision, puts
up a fight, and threatens to leak the report directly to the media.
Profile:
 Susan Novrotsky is a Senior Account Executive managing up to 15
accounts per quarter and supervising a team of six people. Susan’s main
functions include new account development, client management, and
managing the planning processes for hospital restructuring.
 Daniel Yoshi has been working with Woodland Management Services for
five years within Susan’s department. His functions include research and
analysis of hospital structure, general competency, cost-efficiency, human
resource assessment, and liability issues. Daniel’s research reports are
used as the basis for the Woodland’s restructuring plan and capital
allocation.
References: The references included in the DVD are:
 Concepts in Whistleblowing (PPT 5-5)
 The Whistleblowers’ Protection Act (PPT 5-7)
 Whistleblower Provisions of Sarbanes-Oxley (PPT 5-8 to 5-10)
 United States Protection Policies (PPT 5-11)
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Back History: Novrosky and Yoshi have been working at Woodland for over
five years. Novrosky is managing a new account for Hillshire Hospital. The
current objectives are to analyze the efficiency of the staff and the organization as
a whole and generate a restructuring plan. Yoshi was directed to research these
issues and generate a status report.
Yoshi sent Novrosky a progress email with his findings, highlighting his concern
over the exorbitant number of accidents, injuries and unnecessary deaths that have
occurred at the hospital over the past four years. The numbers greatly exceed the
national rate of accidental harm to patients. Yoshi strongly believes that
immediate action is necessary. [Artifact 1 – Yoshi email]
Novrosky forwards the email to her supervisor, Walsh. Novrosky has never come
across such severe findings and is unsure how to proceed. [Artifact 2- Novrosky
email]
Walsh responds via email, instructing Novrosky and Yoshi to hold off on sharing
the research. Hillshire Hospital has an investor meeting in exactly one month,
and if the meeting goes poorly, which it would should this report circulate, there
would be no funding for a restructuring project. Walsh agrees that this is a
serious issue, but insists it would be foolish and more detrimental to act on it
immediately. [Artifact3- president email]
Novrosky leaves a voicemail with Yoshi relaying Walsh’s instruction –Artifact 4
–Novrosky’s voicemail recording]
Scene Set-up: Yoshi is agitated by the voicemail and barges into Novrosky’s
office.
Scene Location: Novrosky’s Office, Woodland Management Services; lunch time
The Meeting - Summary: Daniel Yoshi approaches Susan in her office clearly
agitated about the email and voicemails he received indicating that no action will
be taken on his research findings until after the investor’s meeting in one month.
Susan tries to convince Daniel that no action should be taken at this point because
that would prevent further funding that is required to restructure the hospital.
Daniel contends that taking action now would save lives. Susan reminds Daniel
of what the business goals are and to stay focused on that. Daniel’s conscience
will not let him accept Susan’s position and he threatens to go to the media if
Woodland Management Services does not notify the public and shareholders of
Hillshire Hospital’s problem. The scenario ends with Daniel’s ultimatum.
Afterthoughts – Summary: Susan believes that Daniel is so emotionally involved
with his work that he can’t see the bigger picture and what consequences his
actions would really have. She indicates that Daniel needs to feel valued and that
his work is important so that he doesn’t go to the media. Although Susan admits
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she can’t prevent Daniel from going to the media, she let others in the
organization know about his intentions. She feels she needs to balance her
obligation to Daniel to reach his career goals with the needs of the organization
which is to get the funding.
Dossier: The specific artifacts included in the DVD are:
1. Yoshi’s email to Novrosky detailing the research findings, and calling
for immediate action.
2. Novrosky’s email to Walsh forwarding Yoshi’s email, and asking for
advice on managing the situation.
3. Walsh’s email to Novrosky replying with instructions to hold back the
info.
4. Novrosky’s voicemail to Yoshi instructing him to hold the report until
after the investor meeting.
IV. Discussion Questions:
The References and related Discussion Questions may be found in PowerPoint slides 5-1
to 5-11.
Learning Objective #1: To assess student’ understanding of the role of the middle
manager when faced with difficult ethical dilemmas
1. What competing organizational goals are present in this scenario?
The organization clearly has a goal of receiving funding so it can continue
operations and ultimately reach its goal of restructuring the hospital.
Another goal is to research hospitals in order to have quality information
on which to make decisions about its management. In this scenario, the
research called for an action in conflict with receiving funding.
2. What could the organization do to guide managers and employees in handling
situations like this one?
The organization should have clearly defined mission and vision
statements. In addition, well-communicated values would serve to guide
employee behavior when dealing with situations such as these. Missions,
visions, and values are an important part of an organization’s culture and
can be used during conversations among employees regarding difficult
decisions.

1. Susan’s strategy seems to be to:
A. Minimize problem
B. Re-assign research
C. Commiserate
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Susan seems to minimize the problem by suggesting that Daniel’s research
is incomplete. She suggests that Daniel research the situation further as a
way to stall Daniel from taking action before the investor meeting.
3. Daniel was clearly not satisfied with Susan’s explanation. What could Susan
have done differently to convince Daniel to wait?
Susan should probably have used a strategy based on reasons that Daniel
would appreciate and understand. For example, she could have pointed to
aspects of the research that do not show a clear link between his findings
and accidental deaths. She could have provided alternative explanations
and provided a plan for testing those before jumping to conclusions.
While Daniel was emotional and passionate about his work, his stated
repeatedly that his primary concern was the health of the hospital patients.
Susan seemed to think Daniel was upset because he didn’t feel his work
was valued. Therefore, Susan didn’t address Daniel’s exact concern and
how her plan would also serve to protect patients. She seemed to be very
focused on the business objective of making money rather than the
endangerment of people in the hospital. Thus, not correctly interpreting
Daniel’s concern caused her to use an ineffective influence strategy.

2. Primary reason for communication failure:
A. Danny’s not listening
B. Susan’s not listening
C. A misunderstanding
Student’s answers will vary. Discussion could focus on behaviors that
indicated where active listening broke down. Susan did not seem to
address Daniel’s primary concern directly (see answer to #3 above).

3. What is Susan’s key reason for “holding off’?
A. Incomplete research
B. Funding at risk
C. No need for disclosure
Susan’s motives are unclear. From her email, she initially seemed to agree
with Daniel’s findings and interpretation. She says she met with Walsh
and then supported his position with Daniel. It’s difficult to ascertain
whether she truly believes the research is incomplete or whether she is
more motivated by the fear of lack of funding.
Learning Objective #2: To analyze Whistleblower statutes and understand their purpose
and value for employees and managers.
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1. If Daniel went to authorities with his information, would he be making a “good
faith allegation”? Refer to “Concepts in Whistleblowing” (PPT 5-5) for your
answer.
Yes, Assuming his research is thorough and accurate.
2. Susan states that there is nothing she could do to stop Daniel from “blowing the
whistle.” Do you agree there is nothing she can do to stop Daniel? Why or why
not?
While she can’t physically restrain him or threaten him in any way, Susan
could make an attempt at a compromise solution that would appease
Daniel’s concerns and meet the needs of the organization.

4. Why does Susan focus on goals?
A. Establish “big picture”
B. Distract Daniel
C. Outline Daniel’s job
Susan focuses on goals because she is trying to get Daniel to see the
bigger picture in that taking action now would actually be detrimental to
his ultimate goal of saving lives. However, she doesn’t make that point
very convincingly.
3. Susan does indicate that she would tell others in the organization of Daniel’s
intentions to blow the whistle. What are the pro’s and con’s of this action?
Pro’s - others should know that bad press or a public relations disaster
could occur and be prepared for it.
Con’s - someone could take an adverse action toward Daniel in retaliation
for his intended or committed actions. He may be protected under the
Whistleblowers’ Protection Act and could file suit which would cause
even more bad press.

5. Susan’s response should be:
A. Acquiesce to demand
B. Fire Daniel
C. Call Walsh
Susan should probably call Walsh to discuss the issue further. She and
Walsh may be able to come up with a compromise action that would meet
both Daniel’s and the organization’s needs.
4. Given what you saw in this scenario, if an adverse action was taken toward Daniel
in retaliation, would Daniel be protected under the Whistleblowers’ Protection
Act (see PPT 5-7)? Why or why not?
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It would be illegal for the company to take an adverse action against
Daniel because he alleges a problem that could affect one’ health and
safety. However, it is unclear whether he is protected by this law. While
he did report this to his supervisor he wants action taken immediately
which may or may not be perceived as a reasonable amount of time.
Further, the organization does seem to want to correct the problem, they
are just concerned that taking immediate action now will prevent real
improvements in the future due to lack of funding.
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