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Whistle Blowing

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Whistle Blowing



Business Ethics
Title of Assignment: Term Paper
Whistle Blowing
This assignment was done in partial fulfillment of the requirements of the Finance Major course
(BBA 4)

Literature Review on Whistle Blowing
Whistle blowing can be defined as “an attempt by an employee or former employee of an
organization to disclose what he or she believes to be wrongdoings in or by the organization”
(James, 1995). Another definition of whistle blowing is “the disclosure of illegal, unethical or
harmful practices in the workplace to parties who might take action” (Uys, 2000).
In general, the activity is seen as whistle blowing if the disclosure of information is
considered to be in the public interest which would entail information about criminal activity, a
contravention of any statute, improper or unauthorized use of public and other funds, miscarriage
of justice, abuse of power, misadministration, danger to health and safety of any individual and
any other misbehavior or malpractice (Kloppers, 1997). The act of whistle blowing may have a

detrimental effect on interpersonal relations between the whistleblower and their co-workers
(Davis, 1989). Some might become enemies; other might avoid the whistleblower in order not to
become tainted while others might start looking at the whistleblower differently.
Whistle blowing can be external, internal, personal and impersonal. It is internal where
the whistle blower talks to people higher up in the organization or external where it is reported to
the media, enforcement agencies or public interest groups (Weiss, 2006). It is personal if harm is
reportedly done only to the whistle blower and impersonal if harm observed is done to another.
The act of blowing the whistle by an individual is sometimes considered as being disloyal to the
organization or company that he or she is attached with. The generally prevailing view of the
whistle blower within business, on the part of the management and colleagues, is that this person
is a traitor to the organization (DeGeorge, 1985). Business corporations anticipate the possibility
of disloyalty by requiring employees to sign confidentiality agreements, assenting to the
principle that the business of the corporation is the business of the corporation (Grant, 2002).
Whistle-blower violated their role as loyal agents of the corporations and betrays their employees
and coworkers. Bok (1981) identified three central elements of whistle blowing – dissent, breach
of loyalty and accusation. It can represent a cover for incompetence on the part of the whistleblower or some kind of vendetta or personal crusade that is imposed on the realities of regular
business practices (Grant, 2002).
The term whistle-blowing actually originated over a century ago from the federal
government’s False Claims Act. The FCA was established to offer incentives to individuals who
reported companies or individuals defrauding the government. The Whistle-blowers Protection
Act provided for the protection of the persons who reveal the harmful information to the public.

It helps to ensure that the whistle-blower is treated fairly after the “whistle has been blown.” This
Act is also endorsed by Sarbanes-Oxley (SOX) Act of 2002.
The case that had spearheaded the decision to ensure whistle-blowers’ protection was
settled in the Supreme Court in May 2006. The Supreme Court ruled in Garcetti v. Ceballos that
whistleblowers that make statements while performing their jobs may not be constitutionally
protected. Richard Ceballos, a supervising deputy attorney wrote a memo to his supervisors,
petitioners and the trial court about significant misrepresentations that turned up in an affidavit
which was used to obtain a search warrant. The petitioners retaliated against him thus reversing
the ruling of the Ninth Circuit Court of Appeals. The memo was unprotected because Ceballos
wrote it while performing his job duties.
All organizations are expected to implement a whistle-blowing policy in these modern
days. The policy should indicate who is covered under the policy, provide non retaliation
provisions, and point out confidentiality and process. The whistle-blower if they follow the
appropriate channels could save the company a lot of losses and reduction in revenue and public
humiliation. This is due to the fact that management and stakeholders are better able to address
situations before they are made public. For instance; boarders at the Westwood High School in
2003 had a problem with the scarcity of water on one of the boarding facilities. How can a
school for young ladies teach students proper hygiene without water? Students had written a
letter to the principal stating their concern. The principal was not aware of the problem before the
letter. This example shows us that management sometimes is unaware of the problem and
employees make situations worse if they go outside the company to fix it without using the
internal channels first.

Ethical Issues Related To Whistle Blowing
Whistle-blowing is a conflicting subject in terms of employee loyalty. On one side
whistle-blowing can be seen as disloyal and on another, loyal. It is often assumed that employees
have a vow to protect the dealings of the organization. Ravishankar (2010) stated that an
arbitrator in a 1972 case told an employee that it is wrong to bite the hand that feeds you. There
are some employees that are labelled as an “informer” which is unacceptable in some cultures.
They may also be called untrustworthy and a trouble maker. Disloyalty arises when the person
has ulterior motives. He may not be seeking to help the organization; but to manipulate the
system in order to gain benefits like incentives, recognition or promotion.

Some researchers argue that it is impossible to associate loyalty with an abstract entity.
The organization does not have a mind of its own; instead, it is made of individuals working
towards the same goal. Loyalty depends on ties that demand self-sacrifice with no expectation of
reward, e.g., the ties of loyalty that bind a family together the second is that the relation between
a company and an employee does not involve any surrender of self-interest on the part of the
company, since its primary goal is to maximize profit. Indeed, although it is convenient, it is
misleading to talk of a company having interests. Since, then, the relation between a company
and an employee does not fulfill the minimal requirement of being a relation between two
individuals, much less two reciprocally self-sacrificing individuals, it is felt that it is a mistake to
suggest the employee has any duties of loyalty to the company. Loyalty does not imply that we
have a duty- to refrain from reporting the immoral actions of those to whom we are loyal. An
employer who is acting immorally is not acting in their own best interests and an employee is not
acting disloyally in blowing the whistle, in reality, the argument can be made that the employee
who blows the whistle may be demonstrating greater loyalty than the employee who simply
ignores the immoral conduct, as he is attempting to prevent his employer form engaging in selfdestructive behaviour.
Second, loyalty requires that, whenever possible, in trying to resolve a problem we deal
directly with the person to whom we are loyal. Thus, for example, a father might be loyal to a
child even though the child is guilty of stealing from him, but this would not mean that the father
should let the child continue to steal. Similarly, an employee may be loyal to an employer even
though she takes steps to protect herself against unfair retaliation by the employer, e.g., by
blowing the whistle externally. Loyalty, however, goes beyond considerations of justice in that,
while it is possible to be disinterested and just, it is not possible to be disinterested and loyal.

Loyalty implies a desire that the person to whom one is loyal take no moral stumbles, but that if
moral stumbles have occurred that the person be restored and not simply punished.
Is there a right to blow the whistle?
Utilitarian right rests on the contribution whistle-blowers make to society. There is a
direct benefit in having instances of illegal corporate conduct, gross waste and mismanagement,
and dangers to the public brought to light. These benefits must be balanced against the
undeniable harm that a greater incidence of whistle-blowing would have on business firms.
Nobody can answer whether whistle blowing is good or bad. The problem is that the
good and bad effects are in equal measures. A whistle blower draws the attention of people to
any wrong doing in the society or office environment or just about anywhere. Sometimes this
aspect causes more problem than good.
In an office environment whistle blowing is often considered wrong. If there is an issue
that has to be addressed, then it has to be channelled through the right authorities like an
ombudsperson. If a whistle blower continues to talk to people about the wrong doing of
someone, then the whole office environment gets affected. Even in society this could lead to
common people taking some extreme measures to control the wrong doing. Also, the claims of
whistle blowers are not always genuine and sometimes a person may be doing it for their selfish
reasons. However, a lot of people get dragged into it unnecessarily. Especially in health care
industry, whistle blowing causes severe problems to the industry and the industry has to deal
with false claims and law suits. A whistle blower lawsuit can cost a company millions of dollars
and sometimes it may have been spent unnecessarily. By the time the company tries to prove its

innocence or justify the case, they would have already spent thousands of dollars dealing with
the case. Only the lawyers get to make the money in the bargain.
Employees do have an ethical obligation to report wrongdoing. Companies are very large
places and oftentimes, one hand doesn't know what the other is doing. As a result of unethical
practices they are often involved in several lawsuits. These lawsuits, impact everyone in the
company negatively, whether or not they were involved in the illegal actions. It is therefore
beneficial to all employees to act ethically and demonstrate their loyalty to the company by not
only complying with rules and regulations but by identifying and reporting unethical practices
that may affect the company’s survival as well as the public at large.

Ethical Perspectives on Whistle Blowing
There are quite a few views of whistle blowing identified in our present business
environment. Whistle blowing is said to be personal if the wrongdoing affects the whistle blower
alone (like sexual harassment), and said to be impersonal if the wrongdoing affects other people.
Many people whistle blow for two main reasons: morality and revenge. Morality is the biggest
and best reason because people generally want to do the good moral thing. If a person should
have to blow the whistle on a company they should know that for every action there is a reaction,
and the reaction of whistle blowing might lead to getting fired.

One of the most controversial types of whistle blowing is that of impersonal whistle
blowing. Take for instance a company is making products that are unsafe because they are trying
to save a few dollars. An employee sees this as immoral and tells the media about it. The whistle
blower would do this based on Kant's theory. It would be following the moral law to do so. If a
company is cutting corners and hurting others it would be morally unacceptable not to blow the
whistle on this company. To knowing let innocent people get hurt because of something that you
could have stopped. It would be wrong not to inform the public for their safety, it is morally
required of someone. A lot of people would blow the whistle on a company that is making unsafe
products, but not all. A number of people would not inform the public of the company's
wrongdoings. They would not do it out of fear that they might loose there job or even be
blacklisted from the industry altogether. If they are not fired they will most likely be outcasts at
their work and looked over at promotion time. Whistle blowing is not morally required because
of the rights theory. One has a welfare right, to make a living and support themselves and a
family. They could not do this without a job. If they would blow the whistle on this company
they would more than likely be fired. A Kantian view would say blow the whistle if it is morally
right to do, because moral obligation has nothing to do with consequences. Usually whistleblowing is someone who exposes some wrongdoing, often at a great risk. Whether or not to blow
the whistle can be one of the hardest questions in a person's life.
From a Utilitarian perspective if there is a high probability that the whistle-blower is in a
position to know what he or she is talking about, and in a position to evaluate whether making
the disclosure would likely result in a significant increase in overall happiness and success of the
organization, then whistle-blowing should be encouraged. But if the converse of either of these
conditions is true, then whistle-blowing should be discouraged. A strong utilitarian argument for

encouragement of whistle-blowing is that, without protection, the potential whistle-blower is
likely to overvalue the harmful consequences to himself or herself (loss of job, etc.), and
undervalue the beneficial consequences to the rest of society, of speaking out. If a potential
whistle-blower knows that he or she would be protected, he or she will able to make a calculation
based on the overall good and harm to society.
Although Utilitarianism is most clearly illustrated by way of cost-benefit analysis, the
effects of this theory can also be seen when it comes to corporate whistle blowing. Whistle
blowing contains many moral venues. On one side, the well being of the company’s employees,
stakeholders, and image must be taken into account. On the other hand, the welfare of the
general consumer must be accounted for. Utilitarians once again simplify whistle blowing into a
pleasure versus pain issue. If the act of whistle blowing will generate less pain than pleasure to a
greater number of people, then it is a good act. If not, then it is wrong.
Take for example the Ford Pinto case, in which it is a well-known fact that prior to
production, Ford’s engineers were aware of the Pinto’s potential for catastrophe. No one blew
the whistle, however, and the defective car flooded the market for eight years. In this situation, a
fictional Utilitarian employee could have performed a calculation that indicated not to blow the
whistle. By using cost-benefit analysis, the Utilitarian weighed the pain inflicted upon the
general public versus the pain bestowed upon Ford and its associates. If a controversy such as
this were to leak into the public eye, many Ford employees would loose their jobs and
subsequently their lives would be devastated. This was to be weighed against the loss of life that
the Pinto would cause.
A whistle blowing policy from a utilitarian point of view would encourage those who
reasonably believe, and especially those who reasonably and firmly believe, that the unchecked

conduct of their organization will do more harm than good. In essence, the utilitarian argument
for a policy encouraging whistle-blowing would be that such a policy would alleviate certain
pressures that a person might feel to make the incorrect cost benefit analysis for society, while
still leaving in place social restraints on those who might want to blow the whistle when costs
outweigh benefits.
Additionally, if we look at ethical dilemmas in terms of environmental ethics,
depending on the consequences of a company’s actions whistle blowing would again be justified.
Based on environmental ethics we should conserve our environment and hand over to our
successors a world that is in no worse of a condition than the one we received from others.
Taking this into consideration an ethical employee would be in a position to blow the whistle on
activities that could cause serious damage to not only fellow citizens but also the very
surrounding which we depend on for our survival.
Finally, when blowing the whistle one must consider the conditions in which whistleblowing is morally justified. It is deemed to be morally justified if; the situation is of sufficient
moral importance, the whistle-blower has all facts and properly understand their significance, all
internal channels and steps short of whistle-blowing have be exhausted, the whistle-blower
knows the best way to blow the whistle, their responsibility in view of their role within the
organization, and know what are their chances for success.
Relevance to the Jamaican Society
Whistle blowing is relevant to all Jamaican organizations and all citizens, not just those
few who are corrupt or criminal. This is because every business and every public body faces the
risk of things going wrong or of unknowingly harbouring a corrupt individual. Where such a risk
arises, usually the first people to realize or suspect the wrongdoing will be those who work in or

with the organization. Yet these people, who are best placed to sound the alarm or blow the
whistle, often fear they have most to lose if they do. Unless culture, practice and the law indicate
that it is safe and accepted for them to raise a genuine concern about corruption or illegality,
workers will assume that they risk victimization, losing their job or damaging their career.
Public trust in business is difficult to repair, if possible any at all. If there is a continuous
decline in public trust this may strengthen pressures for greater governmental regulation of
business, reducing opportunities for Jamaican entrepreneurs and hindering the country’s
economic growth.
Every organization desires honesty amongst their employees. Such an element allows for
complete dedication to the organization's mission, and success. By encouraging a whistle
blowing culture within Jamaican organization, the organizations promote, transparent structure
and effective, clear communication. More importantly, whistle blowing can protect the
organization's clients. The impact of unethical practices extends beyond the company,
organisation or the government. It reaches to and affects us all as entrepreneurs, as investors, as
consumers, as employees, and as citizens. Therefore implementing a successful whistle blowing
policy is extremely important to Jamaican companies on a whole that desires success in our very
competitive business environment.
A key aspect of system awareness is educating employees about the red flags, risks and
schemes related to unethical or illegal behaviour including topics such as conflicts of interest,
bribery, kickbacks, embezzlement, financial statement manipulation, and fraudulent regulatory

reporting. This type of awareness can be part of a fraud risk management or ethics and
compliance awareness program.
It is important to explain that every employee has a role in preventing and detecting
fraud. Although employees have this role, they should consider all available options before
blowing the whistle. They should make sure that they have followed the established procedures
for reporting wrong doing, also that the product or service may cause serious harm to society if a
report is not made and the employee doing the reporting must have documentary evidence that
can convince an impartial observer.
It is also recommended that employers develop an internal grievance system in which
employees can report wrong doing. They may also reward employees for using the appropriate
channels and appoint executives to investigate all reported wrong doings.

In concluding, it is necessary to outline that whistle blowing can be both good as well as
it may be harmful to an organization. What is of outmost importance is the motive behind an
employee blowing the whistle. If it is done out of genuine concern for the public then it is good
for the organization. However if the employee does it to get back at a supervisor or a fellow
employee it may be detrimental to the companies wellbeing.

All things considered, whistle blowing is a necessary facet within an organization.it
protects organizations from fraud, misconduct, and to some degree, failure.
By promoting clear communication, keeping the organization's goals in focus for the
entire organization, one can certainly minimize their chances of reaching an organizational

Bok, S. (1981).“Blowing the Whistle”, in J. Fleishman (ed), Public Duties: The Moral
Obligations of Government Officials, Harvard University Press, Cambridge CN,
1981, pp.204-220.
Davis, M. (1989). “Avoiding the Tragedy of Whistle blowing”, Business and Professional

Ethics Journal, 8 (4), pp.3-20.
De George, R. (1985). “Whistle blowing: Permitted, Prohibited, Required”, in F.A. Elliston
(ed.), Conflicting Loyalties in the Workplace, University of Notre Dame Press,
Notre Dame.
Grant, C. (2002). “Whistle blowers: Saints of secular culture”. Journal of Business Ethics,
39(4), 391-399.
Heungsik Park (2004). “Whistle blowing as planned behavior: a survey of Korean police
officers”, Presented at the Joint EGPA-ASPA Conference Ethics and Integrity of
Governance: A Transatlantic Dialogue, pp.1-24. Leuven, Belgium 2-5 June 2005.
James, G. (1984). “In Defense of Whistle Blowing", in W.M. Hoffman & J. Mills Moore
(eds.), Business Ethics: Readings and Cases in Corporate Morality, McGraw Hill,
New York, pp.249-260.
Kloppers, P. (1997) “Behoort die whistle-blower beskerm te word?” Stellenbosch Law
Review 8(2): 237-248.
Miceli, M.P. (2004) “Whistle blowing research and the insider: lessons learned and yet to
be learned”, Journal of Management Inquiry, pp.364 – 366.
Perrucci, R., Anderson, R., Schendel, D.E. & Trachtman, L.E. (1980) Divided Loyalties:

Whistle- Blowing at BART, Purdue University Press, West Lafayette IN.
Weiss, W. Joseph. (2006). Business Ethics: A Stakeholder and Issues Management
Approach, 4th Edition, Thomson South-Western.

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