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Whistleblowing

Running head: Whistleblowing: BUSINESS ETHICS RESEARCH PAPER

Whistleblowing:
Business Ethics Research Paper
Josie Reyes-Uribe
Delaware Technical & Community College
July 24, 2016

Whistleblowing

Whistleblowing
Whistleblowing in a corporation by employees or stakeholders can be done internally or
externally with the only purpose of reporting the wrongdoing of someone to the legal authorities.
This paper explore and explain the effects of whistleblowing in a corporation, the different
ethical issues that can arise with it, as well as the many benefits a company can have, and which
could be the consequences of whistleblowing, and how companies and government deal with the
situation to find the best possible solution, so nobody can be harm.
Whistleblowing
As described in the book Business Ethics by Hartman, DesJardins and MacDonald
whistleblowing is the internal or external disclosure of unethical or illegal activities to someone
who is in a position to prevent, punish or end the wrongdoing. (Hartman et al., 2014). In many
companies, government and community the whistleblower has either been scorned or praised
(Andrade 2014). Different organizations describe whistleblowers as noble people, willing to
sacrifice themselves personally and professionally to expose organizational practices that are or
may be involved in unethical, fraudulent, or harmful activities to the public safety (Barnett
1992). Others describe whistleblowers as disloyal and disgruntled employees who maliciously
and recklessly accuse individuals they feel have wronged them in order to attain their own selfish
goals (Barnett 1992). But the truth of whistleblowing probably lies somewhere between these
two extremes (Barnett 1992). Whistleblowers do call attention to genuine abuses of power by
decision-makers in business and government. They do often suffer retaliation for their ethical
resistance. However, whistleblowers may often be wrong in their accusations and their motives
are not always pure. Their actions can disrupt a workplace, and may cause serious harm to
individuals wrongly accused (Barnett 1992).

The internal or external disclosure of unethical or illegal activities by an organization will


be at the whistleblowers discretion and his/her ability or perception to recognize who can be the
most adequate recipient to disclosure the information. Internal whistleblowing can be done by
making a disclosure to a person, or group of persons, who are considered part of the organization

Whistleblowing

(Hartman et al., 2014). Internal whistleblowing or mechanisms for reporting unethical or illegal
activities are preferable as long as these procedures provide confidentiality to the person
providing the information and protection of the rights of the accused party (Hartman et al.,
2014). Disclosure to an internal recipient is usually not considered as being disloyal to the
organization, because it allows the firm to rectify harmful actions, procedures or policies before
these get disclosed in public (Andrade 2014). External whistleblowing can be done by making a
disclosure to a person, or group of persons, who are not considered to be part of the organization
(Andrade 2014). Because whistleblowing to external groups such as legal authorities and the
press can be harmful to both the whistleblower which can be retaliated by the organization he/she
works for and the organization which can suffer severe sanctions and fines sometime unfairly, it
is preferable to make the internal whistleblowing (Hartman et al., 2014). However, if the
organization does not make any effort to correct its unethical procedures and the harms arising
from its actions then the whistleblower may disclose the wrongdoing to a recipient outside the
organization (Andrade 2014).
Whistleblowers most of the time can find themselves in very difficult situation due to the
outcome of their act of whistleblowing. The consequences of an act of whistleblowing can be
favorable or unfavorable depending on the situation (Dasgupta & Kesharwani 2010). The
possible consequences of whistleblowing are the wrongdoing organization could correct the
situation or the wrongdoing, the whistleblower can be considered disloyal by the organization,
possible retaliation against the whistleblower and the response of the whistleblower against the
reprisal of the organization towards him/her (Dasgupta & Kesharwani 2010).
Consequences of Whistleblowing
The whistleblowers power within the organization and the power of his adversaries,
which most of the time is the dominant group would determine the consequences of his
whistleblowing. The prevailing environment in the organization in relation to the proper and
constructive mechanisms of reporting wrongdoing and handling of disputes also will affect the
consequence of whistleblowing (Dasgupta & Kesharwani 2010). If the organization provides an
effective and fair mechanism of reporting the wrongdoings allowing confidentiality, protecting

Whistleblowing

the rights of both parties and ensures no unfavorable or biased action towards the whistleblower
in case of any disclosure of wrongdoings, the whistleblower will primary try to find internal
solutions remedies within the organization, but if the reaction of the organization is negative or
indifferent, then the whistleblower may try to report the wrongdoings to an external party in
order to stop it or punish the organization and at the same time get support for him/ herself
(Dasgupta & Kesharwani 2010).
One of the main consequences of whistleblowing is retaliation against the whistleblower
by the organization. The retaliation can be done in many ways, but all of them with the only
purpose of harm and affect the whistleblower (Dasgupta & Kesharwani 2010). Some of the types
of forms of retaliation by the organization are Spotlight the Whistleblower: The employer will try
to create any scenario to distort the situation by manipulation or anything else to make the other
parties believe that the real problem is the whistleblower and not the wrongdoing, Manufacture a
Poor Record: The whistleblower who has been receiving good performance rating in relation to
his/her work performance, start receiving poor evaluations from the supervisor with the only
intention of attacking the credibility of the whistleblower and claim that the act of
whistleblowing is a revenge against the organization as a result of his/her resentment towards it
for getting poor grades in his/her performance appraisals. There are other forms of retaliation like
threaten into Silence, isolation, humiliation, Prosecution and even the elimination or stopping of
the whistleblowers carrier (Dasgupta & Kesharwani 2010).
The article The data on federal whistleblowing and its consequences published by the
Washington post talks about how the Department of Veterans Affairs is motivating its employees
to disclose any wrongdoing they see promising them the punishment of anyone who tries to use
any type of retaliation against them, but that promise is not enough for the many federal
employees who are not willing to make any type of disclosures due to that they feel very
vulnerable to retaliation according to many government reports which has shown the ongoing
potential retaliation against any employee who tries to play the role of whistleblowers in the VA.
Yoder, E. (2014). Two surveys conducted by the Office of Personnel Management and the Merit
Systems Protection Board in 1992 and 2010 showed that almost 30 percent of the respondents
felt that their lives could become more complicated if they disclose any type of wrongdoings

Whistleblowing

Yoder, E. (2014). In addition, those surveys also showed the drop from 17.7 percent in 1992 to
11.1 percent in 2010 of employees that answered yes when they were asked whether they
personally observed any illegal or wasteful activities at their agency (Dasgupta & Kesharwani
2010).
Companies and Government Dealing with Whistleblowing
Due to the feeling of vulnerability to retaliation against employees within organizations,
board members and government encourage the establishment and practice of an effective
whistleblowing culture for reporting wrongdoing (Ravishankar 2003).
Since late 1970s the federal government has been creating, enacting and legislating in
order to solve the whistleblowing dilemma (Ravishankar 2003). Federal and state laws created
the antidiscrimination legislation which includes protection to employees from retaliation for
reporting violation externally. In addition, there are agencies such as the Equal Employment
Opportunity Commission and the Occupational Safety and Health Administration (OSHA) able
to receive complains about reprisal from employer (Ravishankar 2003). In addition, the Truth in
Lending laws, the Fair Credit Reporting Act, and the Environmental Protection Act were created
to protect the public from illegal or unethical business practices and also containing forbiddances
of the use of retaliation for reporting violations (Ravishankar 2003).
The creation of the Whistleblower Protection Act of 1989 was made to protect the
interests of whistleblowers working for the Federal Government preventing retaliation against
them and to extend protection through the Merit Systems Protection Board and increased the
authority of the Office of Special Counsel created in 1979 (Ravishankar 2003). The purpose of
the Whistleblower Protection Act of 1989 along with these two laws is to protect the disclosure
of information as well as a government employee's refusal to participate in unethical and
wrongdoing activities at work (Ravishankar 2003).
In addition, the Sarbanes-Oxley Corporate Reform Act of 2002 which protects internal
and external whistleblower was extended to all employees in the public sector to also protect
them from any retaliation after the disclosure of any wrongdoing. With the creation of this act
employees feel more empowered to report unethical or wrongdoings and organizations will

Whistleblowing

realized the importance of establishing and effective mechanism of internal whistleblowing and
encouraging employees to bring unethical and illegal actions they had personally observed to an
internal authority so that action can be taken immediately to resolve the problem and minimize
the organization's exposure to the harm that can cause when whistleblowers disclose wrongdoing
to external groups (Ravishankar 2003).
Conclusion
Whistleblowing will always be part of each organization and the best way to deal with
this issue and prevent any type of harm to the organization and the whistleblowers is to create
and enforce an internal whistleblowing culture using an effective mechanism for reporting any
unethical or illegal activities so the organization can take immediate action to resolve the
problem. In addition every organization must provide entire confidentiality and assure the
whistleblower that the organization is taking very serious every point about the ethical policy
they have in place.
References
Andrade, J. (2014). Reconceptualising Whistleblowing in a Complex World. Springer
Science+Business Media Dordrecht, (128), 321-335 DOI 10.1007/s10551-014-2105-z
Barnett, T. (1992). Why Your Company Should Have A Whistleblowing Policy. Sam Advanced
Management Journal, 37-42. Retrieved from
http://ethics.csc.ncsu.edu/old/12_00/basics/whistle/rst/wstlblo_policy
Dasgupta, S. & Kesharwani, A. (2010). Whistleblowing: A Survey of Literature, The IUP
Journal of Corporate Governance, Vol. IX, (No. 4), 57-70. Retrieved from of EBSCO
host
Hartman, L. et al., (2014). Business Ethics Decision Making for Personal Integrity & Social
Responsibility. In Whistleblowing (pp. 169-172). New York: McGraw-Hill Irwin
Ravishankar, L. (2003). Encouraging Internal Whistleblowing in Organizations. Retrieved from

Whistleblowing

https://www.scu.edu/ethics/focus-areas/business-ethics/resources/encouraging-internalwhistleblowing/
Yoder, E. (2014). The data on federal whistleblowing and its consequences. Retrieved from
https://www.washingtonpost.com/news/federal-eye/wp/2014/06/17/the-data-on-federalwhistleblowing-and-its-consequences/