Whistle-blowing
Geoffrey G. Bell, PhD, CA
University of Minnesota Duluth
September, 2003
What is Whistle-blowing?
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Whistle-blowing involves a measured and
escalating response to perceived ethical
wrong-doings.
A whistle-bower is an employee who
exercises free speech rights to challenge
institutional abuses of power (Devine,
2002)
Measured and escalating response
Measured…
 Whistle-blowing must
reflect the seriousness of
the perceived ethical
violations.
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Don’t go after a mosquito
with a machine-gun.
You will need to
document incidents to
provide evidence to
support allegations.
Escalating…
 Start with immediate
superior and work up
hierarchy.
 Don’t “go for broke”
immediately.
Proposed approach to whistleblowing
1.
2.
3.
4.
5.
6.
7.
Approach immediate manager.
Discuss issue with family.
Go to the next level of management.
Contact an ethics officer or Ombudsman.
Consider going to affected areas outside
formal chain of command.
Go outside the organization.
Leave the organization.
What protection do whistle-blowers
have? (Devine, 2002)
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Whistle-blowing is a high-risk activity that may alienate employees from
their managers and their organizations.
Government employees covered by First Amendment protection, but there
may be retaliation.
Private-sector employees have no First Amendment protection. There are
some states with legislation protecting whistle-blowers.
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More than 2 dozen Federal statutes may protect workers.
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Generally remedies involve reinstatement, not damages.
E.g., Clean Air Act, Superfund law.
False Claims Act – If employee sues and prevails, the company that defrauded
the Government must pay treble damages for the act.
Sarbannes-Oxley legislation now provides Federal protection for employees
of publicly-traded firms against retaliation for disclosing information the
employee reasonably believes the shareholders have a right to know.
Exceptions:
1.
2.
Protection does not extend to private companies.
Companies can exempt themselves through employment clauses that provide
access to company-sponsored arbitration hearings.
Some limited empirical evidence
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A survey of the literature revealed few empirical
studies of whistle-blowing behavior.
Miceli presented a paper at the Academy of
Management Meetings in 1990, examining
successful whistle-blowing as a function of
individual characteristics of the whistle-blower,
situational characteristics, organizational
characteristics, and power of the players.
Miceli findings – Individual characteristics:
Whistle-blowing effectiveness positively
associated with:
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H1a: Whistle-blowing effectiveness will be
positively associated with the whistle-blower’s
level of job satisfaction. (n.s.)
H1b: Whistle-blowing effectiveness will be
positively associated with the whistle-blower’s
level of organizational commitment. (n.s.)
Miceli findings – situations characteristics:
Whistle-blowing effectiveness positively
associated with:
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H2a: cases involving wrongdoing by small numbers of employees
who benefit personally from the wrongdoing but negatively
associated with cases involving wrongdoing by executives on behalf
of the organization. (positive support for cases of employee theft,
others n.s.)
H2b: cases involving direct evidence observed personally by the
whistle-blower and agreement by co-workers that wrongdoing
occurred. (positive with co-worker agreement that wrongdoing
occurred, n.s. with credibility of evidence)
H2c: the use of external channels for reporting wrongdoing.
(significant evidence contrary to hypothesis – i.e., internal channels
more effective; negative relationship between effectiveness and use
of external audit team or audit committee)
H2d: whistle-blowing by multiple organizational members. (n.s.)
Miceli findings – organizational
characteristics:
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H3a: Whistle-blowing effectiveness negatively associated with
bureaucratic characteristics of the organization involved in the
wrongdoing. (n.s.)
Miceli findings: Power characteristics:
Effective whistle-blowing will be:
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H4a: positively associated with the whistleblower’s status in the organization. (hierarchical
level positively associated with effectiveness)
H4b: positively associated with the whistleblower’s performance and with the individual’s
status as a non-role prescribed whistle-blower.
(n.s.)
H4c: positively associated with value congruence
between the whistle-blower and top
management. (n.s.)
Miceli findings: Power characteristics:
Effective whistle-blowing will be:
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H4d: negatively associated with experienced or
threatened retaliation of the whistle-blower. (significant
support for hypothesis)
H4e: positively associated with the status of the
complaint recipient. (n.s.; moreover, and contrarily,
reporting to CEO/CFO or wrongdoer’s superior negatively
associated with effectiveness)
H4f: negatively associated with the wrongdoer’s status.
(n.s.)
H4g: negatively associated with wrongdoing whose
termination would harm the organization, seriousness of
the wrongdoing, harm to important stakeholders, or
longevity of the wrongdoing. (only time since
wrongdoing began negatively associated; others n.s.)
Conclusions from Miceli’s study
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Whistle-blowers more effective in terminating
alleged wrongdoings when they:
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Reported cases of employee theft or cases judged
wrong by co-workers.
Did not use external channels.
Did not report to the CEO/CFO or wrongdoer’s
supervisor.
Spoke from some power base (hierarchical level).
Had not suffered retaliation.
Reported on wrongdoing on which the organization
was not too dependent as indicated by time
wrongdoing was ongoing.
Alternative courses of action
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Company Ombudsman’s office.
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Helps provide assistance in dealing with
problematic issues.
Immediately leaving organization.
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May be only option in a “no-win” situation.