In view of recent studies that identified certain interest groups as potential whistleblowers, we propose an integrative conceptual framework to examine whistleblower behavior by whistleblower type. The framework, dubbed the whistleblowing triangle, is modeled on the fraud triangle and is comprised of three factors that condition the act of whistleblowing: pressure, opportunity, and rationalization. For a rich examination, we use a qualitative research framework to analyze 11 whistleblowing cases of corporate financial statement fraud in Canada that were publicly denounced between (...) 1995 and 2012. Our analysis indicates that whistleblowers are not only insiders but also outsiders [financial analysts, auditing firms, journalists, politicians, customers, and investors]. It also suggests that a dynamic relation may exist between whistleblowers. In addition, our findings show that most whistleblowers opt for external channels when they fail to receive an adequate response from management, seek media exposure, are interested in financial benefits resulting from the act of whistleblowing, or are interested in protecting their investment. Lastly, we propose categorizing whistleblowers into four conceptual types: protective, skeptical, role-prescribed, and self-interested. (shrink)

Whistleblowing is a controversial yet socially significant topic of interest due to its impact on employees, organizations, and society at large. The purpose of this paper is to integrate knowledge of whistleblowing with theoretical advancements in the broader domain of business ethics to propose a novel approach to research and practice engaged in this complex phenomenon. The paper offers a conceptual framework, i.e., the wheel of whistleblowing, that is developed to portray the different features of whistleblowing by applying the whistleblower’s (...) perspective. The framework is based on five “W” questions: Who, What, hoW, Why, and to Whom? The answers to the proposed questions clarify the main aspects of whistleblowing, provide insights into existing studies of the subject, and identify relevant gaps in the literature which, in turn, offer opportunities for future research. (shrink)

Whistleblowing on organizational wrongdoing is becoming increasingly prevalent. What aspects of the person, the context, and the transgression relate to whistleblowing intentions and to actual whistleblowing on corporate wrongdoing? Which aspects relate to retaliation against whistleblowers? Can we draw conclusions about the whistleblowing process by assessing whistleblowing intentions? Meta-analytic examination of 193 correlations obtained from 26 samples (N = 18,781) reveals differences in the correlates of whistleblowing intentions and actions. Stronger relationships were found between personal, contextual, and wrongdoing characteristics and (...) whistleblowing intent than with actual whistleblowing. Retaliation might best be predicted using contextual variables. Implications for research and practice are discussed. (shrink)

Incidences of organizational wrongdoing have become wide spread throughout the whole business world. The management of organizational wrongdoings is of growing concern in organizations globally, since these types of acts can be detrimental to financial well being. Wrongdoing occurs within organizational settings and organizational members commonly have knowledge of and thus the opportunity to report the wrongdoing. An employee’s decision to report individual or organizational misconduct, i.e. blow the whistle, is a complex phenomenon that is based upon organizational, situational and (...) personal factors. The purpose of this study is to examine the relationship between value orientations of individuals and choices for particular whistleblowing modes. Our results show that there are significant relationships between these variables. We contribute to the extant literature by choosing Turkey as context as most studies have been conducted in the US and Europe, and little has been reported about the actions taken by employees in non-Western cultures when they observe wrongdoing in their organizations. (shrink)

Whistleblowing refers to the disclosure by organization members of illegal, immoral, or illegitimate practices to persons or organizations that may be able to effect action. Most studies on the topic have been conducted in North American or European private sector organizations, and less attention has been paid to regions such as Turkey. In this study, we study the whistleblowing intentions and channel choices of Turkish employees in private and public sector organizations. Using data from 327 private sector and 405 public (...) sector employees, we find that public sector employees are more idealistic and less inclined to whistleblow externally and anonymously. Higher idealism among public sector employees does not moderate these effects. We find that private sector employees are more relativistic, and that they are more inclined to whistleblow through external and anonymous channels. More relativistic private sector employees are more likely to prefer external whistleblowing; however sector does not moderate the propensity to whistleblow anonymously. (shrink)

Over the last 20 years, organizations have attempted numerous innovations to create more openness and to increase ethical practice. However, adult students in business classes report that managers are generally bureaucratically oriented and averse to constructive criticism or principled dissent. When organizations oppose dissent, they suffer the consequences of mistakes that could be prevented and they create an unethical and toxic environment for individual employees. By distinguishing principled dissent from other forms of criticism and opposition, managers and leaders can perceive (...) the dissenter as an important organizational voice and a valued employee. The dissenter, like the whistleblower, is often highly ethically motivated and desires to contribute to the organization’s wellbeing. Recognizing and protecting principled dissent provides the means of transforming organizations. By restoring dignity to the individual, organizations gain more productive and loyal employees, and they create an environment that promotes critical thinking, learning, and a commitment to ethics. (shrink)

It has been suggested that a reporting channel administered by a third-party may represent a stronger procedural safeguard of anonymity and avoids the appearance of impropriety. This study examines whistleblowing intentions among lower-tier employees, specifically examines whether an externally-administered reporting channel increases whistleblowing intentions compared to an internally-administered one. In contrast to the findings of an earlier study by Kaplan et al. :273–288, 2009), our results suggest that whistle-blowing intentions are higher when the reporting channel is administered externally than when (...) it is administered internally. We also find that an externally-administered reporting channel mitigates the negative effect of bystanders on whistleblowing intentions. Implications are discussed. (shrink)

Whistle blowing programs have been central to numerous government, legislative, and regulatory reform efforts in recent years. To protect investors, corporate boards have instituted numerous measures to promote whistle blowing. Despite significant whistle blowing incentives, few individuals blow the whistle when presented with the opportunity. Instead, individuals often remain fallaciously silent and, in essence, become passive fraudsters themselves. Using the fraud triangle and models of moral behavior, we model and analyze fallacious silence and identify factors that may motivate an individual (...) to rationalize fallacious silence. We use a survey of graduate accounting students to test hypothesized factors that contribute to fallacious silence rationalizations in an academic setting. We find evidence that the ability to rationalize fallacious silence is related to community influences and personal traits such as awareness and moral competence. (shrink)

Putting measures in place to prevent wrongdoing in organizations is important, but detecting and correcting wrongdoing are also vital. Employees who detect wrongdoing should, therefore, be encouraged to respond in a manner that supports corrective action. This article examines the influence of the ethical culture of organizations on employee responses to observed wrongdoing. Different dimensions of ethical culture are related to different types of intended responses. The findings show that several dimensions of ethical culture were negatively related to intended inaction (...) and external whistleblowing and positively related to intended confrontation, reporting to management, and calling an ethics hotline. (shrink)

In recent times, whistleblowing has become one of the most popularly debated issues of business ethics. Popular discussion has coincided with the institutionalisation of whistleblowing via legal and administrative practices, supported by the emergence of academic research in the field. However, the public practice and knowledge that has subsequently developed appears to construct a dichotomy of whistleblowing/silence ; that is, an employee elects either to ‘blow the whistle’ on organisational wrongdoing, or remain silent. We argue that this public transcript of (...) whistleblowing/silence overshadows the importance of continuing research into alternative (individual or collective) employee behaviour. Drawing on original research with a financial services organisation, our research uncovers a dissenting discourse that operates through implicit communication, such as codes, sarcasm and jokes. We suggest that this hidden transcript offers significant opportunities for employees to act ethically, and offers the potential to sustain an ethical organisational culture. (shrink)

The purpose of this paper is to examine whether anonymous reporting channels are effective in detecting fraud against companies. Fraud, which comprises predominantly asset misappropriation, represents a key operational risk and a major cost to organisations. The fraud triangle provides a framework for developing our understanding of how ARCs can increase detection of fraud. Using publicly listed company survey data collected by KPMG in Australia—where ARCs are not mandated—we find a positive association between ARCs and reported fraud. These results indicate (...) that ARCs are effective in detecting fraud. Additional analysis reveals that small firms derive the greatest benefit from adopting ARCs. We also find that independent boards do not directly influence the detection of fraud, but companies with independent boards detect more fraud because they implement ARCs. (shrink)

This article reports the findings of a cross-cultural study that explored the relationship between nationality, cultural orientation, and attitudes toward different ways in which an employee might blow the whistle. The study investigated two questions – are there any significant differences in the attitudes of university students from South Korea, Turkey and the U.K. toward various ways by which an employee blows the whistle in an organization?, and what effect, if any, does cultural orientation have on these attitudes? In order (...) to answer these questions, the study identified six dimensions of whistleblowing and four types of cultural orientation. The survey was conducted among 759 university students, who voluntarily participated; 284 South Korean, 230 Turkish, and 245 U.K. Although all three samples showed a preference for formal, anonymous and internal modes of whistleblowing, there were significant variations related to nationality and cultural orientation. The findings have some key implications for organizational practice and offer directions for future research. (shrink)

The Sarbanes–Oxley Act of 2002 requires audit committees of public companies’ boards of directors to install an anonymous reporting channel to assist in deterring and detecting accounting fraud and control weaknesses. While it is generally accepted that the availability of such a reporting channel may reduce the reporting cost of the observer of a questionable act, there is concern that the addition of such a channel may decrease the overall effectiveness compared to a system employing only non-anonymous reporting options. The (...) rationale underlying this concern involves the would-be reporter’s likelihood of reporting, the seriousness with which the organization treats an anonymous report, and the organization’s ability to thoroughly follow-up the report. Thus, we explore the extent to which the availability of an anonymous reporting channel influences intended use of non-anonymous reporting channels. Further, in response to Sarbanes–Oxley and the environment of financial scandals that led to its passage, many firms are strengthening their internal audit departments, and providing them with greater independence from upper management’s direct control. Accordingly, our examination tests whether the intended use of the internal audit department as an internal reporting channel is greater when the internal audit department is of “high” versus “low” quality. Finally, the study investigates intended reporting behavior across three different cases (e.g., settings). Results show that the existence of an anonymous channel does reduce the likelihood of reporting to non-anonymous channels, that generally the internal audit department quality does not affect reporting to non-anonymous channels, and that case-setting affects the type of channel to be used. Implications from the study are discussed. (shrink)

This article presents a network perspective on whistleblowing. It considers how whistleblowing affects, and is affected by, the preexisting distribution of power inside and outside an organization, where power is conceptualized as deriving from the network positions of the key actors. The article also highlights four characteristic features of whistleblowing: third‐party detriment, local subversion, appeal to central or external power, and reasonable expectation of concern. The feature of local subversion succinctly explains why whistleblowing is difficult. The feature of appeal to (...) central or external power highlights that contrary to the perception of a democratizing phenomenon, whistleblowing tends to redistribute discretion away from local power toward more central power. This suggests a need for caution about institutional measures to promote whistleblowing in contexts where governance is already highly centralized. (shrink)

Organizations are increasingly embedded with consultants and other non-employees who have the opportunity to engage in wrongdoing. However, research exploring the reporting intentions of employees regarding the discovery of wrongdoing by consultants is scant. It is important to examine reporting intentions in this setting given the enhanced presence of consultants in organizations and the fact that wrongdoing by consultants changes a key characteristic of the wrongdoing. Using an experimental approach, the current paper reports the results of a study examining employees' (...) reporting intentions subsequent to their discovery of wrongdoing by a consultant. The results of the study indicate that perceptions about the seriousness of a wrongdoing, personal costs and personal responsibility related to reporting a wrongdoing, and moral-equity judgments are significantly associated with reporting intentions for a normal reporting channel. Only perceptions of seriousness and personal costs are significantly associated for an anonymous reporting channel. Lastly, while personal costs for the anonymous reporting channel were lower than the normal reporting channel, reporting intentions were similar across the two channels. (shrink)

Since there are so few controls over detecting and preventing faculty misconduct, one of the most common ways in which it is discovered is through student reports. Given the importance of student reports in bringing to light faculty’s ethical lapses, this paper seeks to understand what factors influence students’ likelihood to report faculty misconduct. We develop an empirical model that integrates the decision process of the Prosocial Organizational Behavior Model with insights from the emotional perspective on whistleblowing. Specifically, we use (...) an experimental survey to examine how students’ perceived unfairness of the faculty misconduct, feelings of anger, and the students’ self-interest in the situation in conjunction with situational “cues for inaction” lead to the intention to blow the whistle. Overall, the results from our structural model partially support our theoretical model. Interestingly, these findings demonstrate that, in the case of faculty member misconduct, anger and perceptions of unfairness play a greater role than the more rational cost-benefit process of the POB model. These results could aid in development of ethics education for students and could also inform the development of university policies that encourage students to come forward when faced with faculty misconduct. (shrink)

This paper compares two theories of the firm used to interpret firms’ corporate social strategies in order to derive new insights and questions in this research area. Researchers from many branches of strategic management agree that firms can strategically allocate resources in order to achieve both long-term social objectives and competitive advantage. However, despite some progress in investigating corporate social strategy, studies rely on fundamentally diverging theoretical approaches. This paper will identify, compare and begin to integrate two competing theories of (...) the firm implicit in corporate social strategy scholarship: the resource-based and behavioural theories of the firm. I discuss the implications of these two theories for both researchers and practitioners on key debates within corporate social strategy, and conclude by suggesting several fruitful avenues for future research based on the emerging integration of these two theories of the firm within the strategy literature. (shrink)