Type of Wrongdoing and Whistle-Blowing: Further Evidence That Type of Wrongdoing Affects the Whistle-Blowing Process

Abstract

Preliminary evidence suggests that the type of wrongdoing observed in organizations affects the whistle-blowing process; that is, the likelihood that wrongdoing will be reported and the consequences of so doing. Using as sample of management accountants and focusing on financial fraud, this study provides additional evidence that type of wrongdoing affects the likelihood of whistleblowing. However, contrary to previous research findings, there was no relationship between type of wrongdoing and experienced retaliation for whistleblowing. Type of wrongdoing was related to perceived issue seriousness providing additional evidence that wrongdoing is not monolithic in nature. These findings suggest that type of wrongdoing should be included in future research on the topic of whistle-blowing. R ecent scandals in a variety of firms and industries have increased the salience of ethical conduct in business. Indeed, public perceptions of the extent of corporate malfeasance have raised questions about the ethical reasoning and the conduct of senior managers as well as the values taught to them in business schools. 1 Although acting ethically has clear benefits to employees, other important stakeholders, and to the firm pressures for performance and/or the desire for personal gain have led individuals in both public and private sector organizations astray. 2 While there has been renewed interest in fostering ethical behavior in organizations through codes of conduct and/or employee training 3,4 there has also been increased interest in what happens to employees when they discover and report unethical or illegal activity; that is, whistle-blowing. 5 Perhaps one of the most vexing issues in recent scandals in large firms such as WorldCom, Enron, and Tyco is the nagging question of how this highly unethical conduct was allowed to continue. Why wasn't it was discovered and reported much sooner? Why weren't external oversight agencies more vigilant?As whistle-blowers can be viewed as a "last defense" against wrongdoing in organizations, it is important to understand the process and the consequences of whistle-blowing from both an academic and a practitioner's perspective. With regard to

The Evolution of Whistleblowing Studies: A Critical Review and Research Agenda

“…A similar concept, i.e., perceived seriousness, has also been found to have a positive effect on whistleblowing (Ayers and Kaplan 2005;Cassematis and Wortley 2013;Gao et al 2015;Mesmer-Magnus and Viswesvaran 2005;Somers and Casal 2011). Moreover, perceived costs (Ayers and Kaplan 2005;Gao et al 2015) had a negative influence, while responsibility had a positive influence on whistleblowing (Gao et al 2015).…”

“…Wrongdoing can be defined as conduct falling along a spectrum of behavior ranging from serious illegality to unprofessional or improper behavior in the organization (Teo and Caspersz 2011). To this end, a general finding is that the type of wrongdoing (Somers and Casal 2011) affects an individual's decision to blow the whistle and immensely affects the nature of the whistleblowing process., i.e., the steps that follow, including the way of reporting as well as the comprehensiveness of retaliation .…”

“…From the substantive standpoint, the issues range from exploring dilemmas about company policies, organizational practices (Sims and Keenan 1998), sexual harassment (Lee et al 2004), accounting matters (Taylor and Curtis 2010), corruption (Hwang et al 2008), theft and the incidence of fraud (Dyck et al 2010;Lowe et al 2015;Robinson et al 2012;Seifert et al 2010;Somers and Casal 2011), which has been of particular interest to scholars. Recently, authors have explored the reporting of troubles in IT projects as well (Keil and Park 2010;Robey and Keil 2001).…”

“…The decision to report is contingent on the seriousness of the issue (Hersh 2002;Somers and Casal 2011). In particular, when describing the ethical situation in which the whistleblowing takes place, moral intensity has been identified as playing a key role in explaining the decision to blow the whistle (Singer et al 1998).…”

Development of the Ethical Evaluation Questionnaire: A Machiavellian, Utilitarian, and Religious Viewpoint

“…Robinson and Bennett (1995), and Near et al (2004) classified wrongdoings in organizations such as wasting, stealing, discrimination, mismanagement, minor violations, and sexual harassment. According to Somers and Casal (2011) employees who observed wrongdoings such as the cases mismanagement, sexual harassment, and violation were more likely to report them than were employees who observed the cases of wasting, stealing or discrimination. Therefore the question of how individuals make decisions about ethical issues is of great interest to organizational researchers (Bass et al, 1999).…”