ETHICS & VALUES IN BUSINESS

Module 5, 2024
Facilitator: Mrs. Monica Bryant
ETHICS & VALUES IN
BUSINESS
CHAPTER 4
WHISTLEBLOWING
 ETHICS & VALUES IN BUSINESS

Whistleblowing

There have always been informers, or snitches, who reveal information to enrich themselves or
to get back at others. However, whistle-blowers like Time magazine’s “persons of the year” are
generally conscientious people who expose some wrongdoing, often at great personal risk.
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What is Whistleblowing?

• Whistle-blowing can be defined as the release of information by a member or former

member of an organization that is evidence of illegal and/or immoral conduct in the
organization or conduct in the organization that is not in the public interest. It should be an
evidence of some significant kind of misconduct on the part of an organization. The motive
must be to correct some wrong, not to seek vigilance or personal advancement.
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First, blowing the whistle is something that can be done only by a member of an organization.

• It is not whistle-blowing when a witness to a crime notifies the police and testifies in court.

• It is also not whistle-blowing for a reporter who uncovers some illegal practice in a
corporation to expose it in print.

• The difference is due to the fact that an employee is expected to work only as directed, to go
through channels, and, more generally, to act in all matters for the well-being of the
organization.
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• Second, there must be information.

Merely to dissent publicly with an employer is not in itself blowing the whistle; whistle-
blowing necessarily involves the release of nonpublic information.

• The whistleblower assumes that his message will alert listeners to something they do not
know, or whose significance they have not grasped because it has been kept secret.
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• Third, the information is generally evidence of some significant kind of misconduct
on the part of an organization or some of its members.

• The term “whistle-blowing” is usually reserved for matters of substantial

importance.

• Information of this kind could alert the public and possibly lead to new legislation or
regulation. However, merely exposing incompetent or self-serving management or
leaking information to influence the course of events is not commonly counted as
whistle blowing.
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• Fourth, the information must be released outside normal channels of
communication. In most organizations, employees are instructed to report
instances of illegal or improper conduct to their immediate superiors, and other
means often exist for employees to register their concerns.

• In both internal and external whistle-blowing, the information must be revealed in

ways that can reasonably be expected to bring about a desired change.
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• Fifth, the release of information must be something that is done voluntarily, as opposed to
being legally required, although the distinction is not always clear.

• A sixth point is that whistle-blowing must be undertaken as a moral protest; that is, the
motive must be to correct some wrong and not to seek revenge or personal advancement.
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There are 2 types of Whistle Blowing.

• Internal – advocates beliefs or revelations within the organization. (employee)

• External – advocates beliefs or revelation outside the organization. (former employee)

The ethical justification of whistle-blowing might seem to be obvious in view of the laudable
public service that whistle-blowers provide—often at great personal risk. However, whistle
blowing has the potential to do great harm to both individuals and organizations.
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Justification of Whistle Blowing

• Situation of sufficient moral importance, when people’s lives at stake. eg. side effects of
drug or medicine if not prescribed in the cover of medicine and information is released to
public by whistle blower.

• Do you have all the facts and have you properly understood their significance? Whistle
blowing usually involves very serious charges that can cause irreparable harm if they turn
out to be unfounded or misinterpreted.

• All internal channels have to be utilized without a step short of whistle blowing. Whistle
blowing should be last resort not first – when there are no morally preferred alternatives.
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• What is the best way to blow the whistle? Once a decision is made to “go public,” a host of
other questions have to be answered. To whom should the information be revealed? How
much information should be revealed? Should the information be revealed anonymously or
accompanied by the identity of the whistle-blower?

• What is my responsibility in view of my role in the organization? The justification for

blowing the whistle depends not only on the wrongdoing of others but also on the particular
role that a whistle-blower occupies in an organization.
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• What are the chances for success?

• Insofar as whistle-blowing is justified because of some good to the public, it is important to

blow the whistle only when there is a reasonable chance of achieving that good.
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• Lets look at these 3 arguments

• The Loyal Agent Argument

• Are Whistle-Blowers Disloyal Agents?
• The Meaning of Loyalty

THE SOCIOLOGICAL EVIDENCE.

• Some evidence for the claim that whistle-blowers are often loyal—perhaps even too loyal—
to the organizations they serve is provided by Myron Glazer, a sociologist who interviewed
55 whistle-blowers in depth.
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IS THERE A RIGHT TO BLOW THE WHISTLE?

• Even though whistle-blowing can be justified in some situations, the sad fact remains that
courageous employees who perform a valuable public service are often subjected to harsh
retaliation.

• The law protects whistle blowers to provide best contribution to the society.

• Defense of the law supports the right of an employee on his freedom of speech.
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• When an employee discovers unethical, immoral or illegal actions at work, the employee
makes a decision about what to do with this information. Whistle blowing is the term used to
define an employee decision to disclose this information to an authority figure; a boss,
media, or government official. Whistle blowing leads to good and bad results. . First, the
benefits of carefully considered whistle blowing can lead to the end of unethical business
practices. The lives of individuals and whole communities have been saved by
whistleblowers. Severe damage to the environment has been stopped by the actions of one
individual who blew the whistle on an unethical employer.
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The Arguments against Whistle-Blower Protection

• First, a law recognizing whistle-blowing as a right is open to abuse. Whistle-blowing might

be used by disgruntled employees to protest company decisions or to get back at their
employers.

• Second, legislation to protect whistle-blowers would encroach on the traditional right of

employers to conduct business as they see fit.

• Third, if whistle-blowing were protected by law, what should be the legal remedy for
employees who are unjustly dismissed?
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• The Arguments for Whistle-Blower Protection

• The main argument in defense of a law to protect whistle-blowers is a utilitarian one that
rests on the contribution whistle-blowers make to society.

• A second argument for providing legal protection for whistle-blowers appeals to the First
Amendment right of freedom of speech. A distinction needs to be made, though, between the
appeal to freedom of speech as a legal argument and as a moral argument.
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Guidelines for Whistle blowing
This list is a guideline that will help an employee to determine if a situation merits whistle
blowing.
• 1. Magnitude of consequences. How much harm has been done or might be done to
victims?
• 2. Probability of effect. The probability that the action will actually take place and will
cause harm to many people must be considered
• 3. Temporal immediacy . An employee must consider the length of time between the
present and the possibly harmful event. An employee must also consider the urgency
• 4. Proximity The physical closeness of the potential victims must be considered
• 5. Concentration of Effort A person must determine the intensity of the unethical practice
or behavior.
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• Companies have many incentives to develop a whistle-blowing policy.40 No company is
immune from wrongdoing, and an effective policy on whistle-blowing enables a company to
deal with misconduct internally, thereby preventing embarrassing public disclosure. For a
policy to be effective, however, employees must be assured that their reports will be taken
seriously—which means that an investigation will be conducted and appropriate action
taken. More importantly, employees must feel confident that they will not suffer any
retaliation.
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Benefits and Dangers of a Policy

• Although companies might prefer to ignore some wrongdoing and to continue profitable but
questionable practices, they can also benefit from learning about problems early and taking
corrective action before the problems become public.

• Whistle-blowing policies also benefit employees by providing them with a channel of

communication for responding to perceived wrongdoing in the organization. Employees are
likely to welcome an opportunity to express their legitimate concerns without the risk of
going public with damaging information.
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Components of a Whistle-Blowing Policy
A well-designed whistle-blowing policy should include the following components.

1. An Effectively Communicated Statement of Responsibility. Employees should understand

that they have a responsibility to report all concerns about serious unethical or illegal conduct
through the appropriate internal channels.

2. A Clearly Defined Procedure for Reporting. A procedure should be established that allows
employees to report their concerns in a confidential manner.
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3. Well-Trained Personnel to Receive and Investigate Reports. The success of a
whistleblowing policy depends heavily on the skill of the personnel who receive and investigate
the reports from employees.

4. A Commitment to Take Appropriate Action. Employees must be assured that their reports
of suspected wrongdoing will not be ignored or misused. Not only should the purposes of a
whistle-blowing policy be effectively communicated to all employees, but the company must
also assure employees by both word an d deed that their reports will be used only for these
purposes.
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• 5. A Guarantee Against Retaliation. By far, the most critical component in any whistle
blowing policy is the assurance that employees will not suffer retaliation for making reports
in good faith.