Ethics and Whistleblowing - Outline Example

? Ethics and Whistleblowing Table of Contents Introduction ……………………………………………………………………………….3 Whistleblowing as an Ethical Dilemma……………………………………………………3Defining Whistleblowing…………………………………………………………………..4 Workplace Whistleblowing: Increased Incidence………………………………………….5 Whistleblowing: Cases and Their Implications…………………………………………….6 Whistleblowing: Implications to Policy……………………………………………………9 Collaborative Efforts between Stakeholders and Employees on Whistleblowing Issues……………………………………………………...11 Conclusion………………………………………………………………………………….12 References……………………………………………………………………………….....14 According to statistics published by Public Concern at Work (www.pcaw.co.uk) more and more people are willing to whistleblow about wrong doing in the workplace. In light of this, evaluate how organisations can develop an effective approach to workplace whistleblowing which takes account of the needs of their stakeholders? Introduction Throughout the years, businesses have evolved. The days on the industrial age is over and the increasing vast improvement in technology has given way to an improvement in communication that may not have been perceived in the last two decades or so. Consequently, this has paved the way for more information and ultimately knowledge to be accessible for almost anyone that has a computer and can surf the internet. Likewise, a new breed of workers has been identified that are more fluid and are quite different from the traditional 8-5 employees. These are called knowledge workers and companies are increasingly reliant of these professionals as an integral part of their businesses (Serrat 2008). However, knowledge workers or not, companies and stakeholders must recognize the fact that their workers have just gone smarter and are more empowered than ever. This brings a more empowered and smart breed of employees that are more capable of blowing the whistle to call attention to and maybe put a stop on wrong doings in a company. This also brings about a culture of higher ethical standards wherein employees adhere to principles and values in the conduct of their work. Whistleblowing as an Ethical Dilemma This simple truth described above has likewise increased the possibility of employees blowing the whistle on unfair labor practices or unsafe working standards and of course anomalies or illicit activities by the company or by employees, officers or even owners of the company. Some years back, an incident struck the attention of the public when a ranking NHS (National Health Service) official was sacked for supporting a subordinate in an apparent expose’ of irregularities within the organisation’s system. Of course, the official reason for the dismissal was not about the whistle blowing incident but about some issues regarding management. This was quite questionable though since the person in question has been with the NHS for over a decade and a half and was a recent recipient of a management award (BBC News 2003). This incident can be regarded as a crossroad where whistle blowing and ethics ran smack into each other. The company or its management cannot openly use the whistle blowing as a reason to terminate an employee that has, well to put it simply, earned the ire of the head honchos. In effect, this leads whoever is in charge of taking care of the company’s problem personality to orchestrate an inglorious exodus usually for the company to save face and avoid a repeat of the incident. Defining Whistleblowing Whistleblowing is defined as a” disclosure of illegal, immoral, or illegitimate practices that are under employer control by either former or current organization members to persons or organizations that be able to effect action” (Near & Miceli, 1995, p. 20). It must be noted that not all information leaked out or griped about by an employee or a former employee constitute whistle blowing. Public disagreement or dissent expressed by an employee cannot be regarded as a whistle blowing. Likewise, persons other than employees or former employees cannot whistle blow (Fairleigh Dickinson University 2011). Whistle blowing is not a pleasant experience, both for the whistle blower and for the company in question. It is a very tricky business and both entities must ensure that the incident is properly handled. On the part of the whistle blower, especially if he or she is in a position of trust, loyalty and integrity is usually the first to be questioned. A dissenting employee can resort to bad mouthing his or her organisation. Though this is not immediately recognizable as whistle blowing, this escalates as such when certain pertinent information is released. Likewise, if the employee or former employee has been proven to have a clear reason to seek vengeance against the organisation, his or her credibility may then be put in question. Thus, it is important for an employee or former employee to really examine his or her intentions before blowing that whistle. When done by an officer or by one that is in a position of trust or confidence, the practice may be regarded as a treachery. Ethics play out clearly on these types of incidents as principles tend to clash against each other. The Advantages and Disadvantages of Whistleblowing Whistle blowing is a very complicated moral issue. It is important to ensure that the reason for such an action must be free of personal vindictiveness and is aimed at fostering an important rectification to eliminate or correct a wrongful act or wrong doing (Weil 2011). Thus, would be whistle blowers must be clear with themselves not just about what actions to take but the reasons for these actions as well. Nowadays, with the tremendous increase of the communication capability of even the average employee, it is quite easy to take on ones disappointment publicly. Twitter, Facebook and other social networking sites have immensely contributed to the growing power of information dissemination. Thus, a company may be subject to an unfair public trial whenever such an incident occurs. As such, some company information may yet to be released fully that when it is perceived wrongly and blown out by an employee, it may have a lasting damaging effect on the company’s image. Also, in this fast-paced world such an irresponsible act of disclosure can be immediately spread out. Thus brings forth the importance of ethics in whistle blowing. A company is a juridical person and its image is important for the business’ sustainability. Furthermore, employees and their families are usually dependent of the companies they are connected to for their survival. Hence, a destruction of the company’s reputation not only serves to lash out at its name and reputation but in effect endangers the lives of their employees as well as their families. Workplace Whistleblowing: Increased Incidence With such a conducive atmosphere provided by the vastly improved information system, whistle blowers are increasing. The United Kingdom prides itself in having a potent policy for protecting whistleblowers, and this has been in place since 1999. The statistics which show its effectiveness are depicted in the following graphs, showing the rising trends of whistleblowing claims (FAIR 2011). These figures suggest the rising trends in claims on whistle blowing reprisals endorsed under the Public Interest Disclosure Act. These happened during the first decade of effectivity of the policy. Source: http://fairwhistleblower.ca/content/trends-uk-whistleblower-claims Figure 1. Claims of reprisal endorsed to an employment tribunal. The ACAS (the Advisory, Conciliation and Arbitration Service) resolves whistleblowing cases through arbitration, obviating the need for hearings. Figure 2 shows the number of cases solved through this procedure. Source: http://fairwhistleblower.ca/content/trends-uk-whistleblower-claims Figure 2. Claims resolved via arbitration. Source: http://fairwhistleblower.ca/content/trends-uk-whistleblower-claims Figure 3. Claims resolved in private or underwent withdrawal. Figure 3 depicts the number of increases which were settled in private or have been subject to withdrawal. Source: http://fairwhistleblower.ca/content/trends-uk-whistleblower-claims Figure 4. Claims that were resolved effectively via hearing This depicts the number of cases that underwent a hearing and where the whistleblower was sided upon. Likewise, the offshoots of non-profit organisations that help out whistle blowers are able to encourage more and more employees or former employees to blow the proverbial whistle. Also, the proposal for financial rewards for whistle blowers will surely fan the flames of whistle blowing. This is being proposed in the Dodd-Franks Act wherein there is a part where the Securities and Exchange Commission will provide for possible incentives, which are financial in nature, to those that will tattle tale against frauds (Black, December 2010). Well, this will surely help since most pundits believe that fraudulent transactions played a big part in the financial debacle at Wall Street that led to the credit crunch which, until now, greatly impacts not only the U.S. but the global economy as well with the very slow recovery. Indeed, systemic risks remain in most major economies such that banking systems remain badly damaged. This has greatly hampered recovery and has continually retarded economic growth. Having the capability to guard against future excesses of the same kind is very difficult as many systems have to be in place to safeguard a repeat of such an event. However, in the U.S. which is the epicenter of the crisis, this capability has been greatly diminished since half a thousand FBI agents that are supposed to be vanguards against white collar crimes has been pulled out in the aftermath of the 2001 terrorist attack (Black, 2010). Unfortunately, it is quite clear that the havoc brought about by the recession is much higher than the damages brought about by the terrorist attack. Likewise, the repercussion brought about by that crisis was far more reaching and much of the consequences are still unknown. The uncertainties have also compounded the crisis and have had a domino effect on other sectors of the economy and on other economies as well. Hence, the move to have a system of financially rewarding would be whistle blowers against fraudulent cases seem to be very sensible. It effectively augments the government’s lack of capability while at the same time providing a deterrent to would be launderers and greedy bankers. Unfortunately, there is big money involved in here and as such intense lobbying can be expected. Whistleblowing: Cases and Their Implications In today’s business environment, companies must then be able to have the ability to ensure that they are run effectively and without fault. This brings forth the issue of good governance into center stage as this ensures that they are able to conduct their operations fairly limiting the possibility of lawsuits and well of whistle blowing. Companies must be able to address this whistle blowing incidents properly like taking a constructive criticism. Although usually perceived as threats, whistle blowers in fact present companies with opportunities to improve on their processes, correct wrongful acts, enhance operational practices and even weed out potential white collar thieves. Unfortunately, some companies have lashed out at their whistle blowers and have even terminated their employment. Thus, employees had to defend themselves and of course their subsistence by filing back cases and often winning in the process. There was an instance where the whistle blowing incident was not about a person of higher authority or the management or owners and not even a co-worker. The issue centered on a concern about the safety of their drug products that, in effect, should have given the company an opportunity to improve and maybe capitalize on this incident to further boost their image. Unfortunately, the concerned employee has axed and well with nowhere to go had to battle it out in court which he subsequently won. Bad news for the company though as an opportunity had to be senselessly wasted (Barnett 1992). Again, it must be stressed that the influence of technology is even greater today for would be whistle blowers. Suggestions boxes, in their strictest sense, have been simply phased out. More so, these new communications capability can be exploited to leak out sensitive information or be used to covertly bad mouth a corporation, its products or even officers that may or may not have a lasting effect on the targets’ integrity. Hence, instead of perceiving whistle blowing as a threat, companies would do well to harness it and try to improve using the unsolicited suggestion from employees who may be genuinely concerned for the company’s well being. It is not easy to suppress something especially if it is the truth as it will always find a way to break out. In fact, instead of making these whistle blowers into enemies, some companies have even found ways to befriend such persons and have even integrated policies to cover such incidents. In doing so, these companies have laid out a framework that will facilitate the effective communication of grievances as well as provide protection for those that are brave enough to step forward and say something is wrong. This policy has enabled SIG plc (2011), a European special products supplier, to demand greater morale ascendency from its workers. Thus, in establishing a whistleblowing policy, this company has effectively culled out an enviable culture where illicit behaviours cannot prosper. In effect, the openness of the company to whistleblowers has been instrumental in their success. With more and more people willing to be whistle blowers, companies have to make a choice on whether to see them as threats or possible sources of opportunities for improvement. A reliable independent organisation, PCaW has released some numbers as to the reality of the whistle blowing boom. However, it also recognizes the utilization of informing anonymously of anomalies or other matters of concern that may be too hot to handle and that may be shrouded by potential hazards to the potential whistle blower (PcaW 2011). However, it must be understood by stakeholders that this anonymous method is not only helpful to the whistle blowing employee or former employee but may also be detrimental to the company itself as those that way be affected may try to formulate a cover up which effectively robs the company of valuable information and potential chance for change that the whistle blower may bring. However, such a policy must be worked up with caution as this approach may open the door to potential detractors as well. This does not bode well for both the company as well as the genuinely caring whistle blowers as it may obscure the already thin demarcation line between voicing out true concern and malicious rumor farming. Thus, policy makers must be wary of this possibility and those in charge of these types of operations must then be able to distinguish and carefully cut through clouds of uncertainty. Whistleblowing: Implications to Policy Usually, whistle blowers tell on wrong practices as well as employees or superiors that may be leeching out a company’s resources siphoning of funds or even assets. Catching these white collar robbers is not an easy task especially if the one in question is either a friend or a superior. Again, personal principles are set on the spotlight and are put to a very grueling test. This also tests the resolve of policy makers as their wrong action or inaction could mean money bleeding out of the company. Likewise, there may be more costly consequences if wrong practices are not put in check. The most obvious has just been mentioned which was about money being stolen. The worst case though are huge lawsuits from flawed products that could have been checked had there been brave employees that have reported them or decent superiors sensible enough to listen should there have been brave enough to whistle blow. Having a policy may be enough but cultivating the culture that is open to such bold actions by subordinates certainly will make the difference between choosing between the doing the right thing and being contented with what may be convenient. As such, even though there is a policy, stakeholders may not necessarily capitalize on this since the culture does not conform to such a move. Whistleblowing is a very hard choice to make. It creates a sense of permanence in the doer as he or she puts himself in the risk of persecution because of speaking out. It puts them in a quandary as these effectively threatens the possibility of job loss, being ostracized and well not to mention the danger of being branded as a whistle blower for the rest of their lives. Unfortunately, if ever there is a case filed and the whistle blower loses, the connotation of being branded as such is never good. Thus, this type of punishment even reverberates into the person’s future as new job prospects become affected with the possible character assassination that a scorned company may unleash. It is somewhat like a David versus Goliath battle and when the employee or former employee loses, the repercussion from the vindictiveness of the company in question will surely ripple through the poor whistle blowers future. Hence, policy makers must be able to show to their employees that it is okay to go out and fight the good fight so as to ensure and give these employees the courage and the assurance that they are never alone in this fight. Timing is also key. There is really not much good in telling on a manager if the purse of the company has already been emptied. This has happened at Worldcom and Enron wherein the valiant efforts of their employees that spoke out were just a little too late to make a difference. It was brave yes, but the effort came in at a time when the companies can no longer reverse their respective courses towards oblivion. A quick look at the casualties saw the shareholders and employees squirming like fishes out of water (Ravishankar 2003). Collaborative Efforts between Stakeholders and Employees on Whistleblowing Issues Taking this into consideration, it is quite clear that shareholders and employees do not have to go at each others throats when it comes to ethics and whistle blowing issues. It is quite clear that they can both fall prey to ingenious and unscrupulous employees that may take advantage of their positions for personal gains at the expense of the general welfare of the company and majority of the stakeholders. Hence, instead of being on opposite ends on the issue, stakeholders would do well to join forces to combat a common threat. A paradigm shift is needed to transform whistle blowing from an inconvenience to a defense against internal corrosion by human-like termites wearing smart business suits. So, rather than suppressing would be whistle blowers, the management would do well to craft programs that will encourage employee suggestions. In effect, these empowered employees develop a sense of ownership that enables them to care for the company even more. With employees behaving in such a way, the communications line will be more open to ensure timely and reliable information dissemination in order to prevent the growth of a culture of distrust that hampers true progress within an organisation. As such, companies could include the policy for whistle blowing in their programs for developing employee empowerment. In the process, they are setting themselves up to reap the benefits of having more thinkers as employees can suggest and contribute better to the organisation. Also, the feeling of being empowered provides a fertile ground for growing the enthusiasm of employees as well as having a handy motivating factor for the company’s workforce (Heathfield, About.Com 2011). In the end, this collaborative effort does not only net in various would be corporate bandits but healthier bottomlines as well. Handling people will always be the most difficult part in a business. Employees come from almost all walks of life thereby their qualities are never the same. Likewise, everyday situations open up the choice from doing right or wrong. This is a reality that each individual must face up to. Furthermore, these individuals are components of one company thereby are a part of an intricate puzzle of talent, skills and personalities that makes a company alive. As mentioned, its sustainability may very well depend on its openness to constructive criticisms. As such, these criticisms may come in the form of whistle blowing. An employee rising up above his or herself, putting principles and virtues as well as the benefit and welfare of others before oneself and blowing the whistle to put a stop on what is wrong. These employees or former employees are sometimes regarded as trouble makers from the point of view of top management but in the end, they may have to dig deeper and see with an impartial eye if the allegations have some substance. Perhaps, this act of bravery is key to that company’s very survival. However, to be able to bring this into reality and not just on company mission and vision statements, management must have a clear cut policy on this growing reality in management (PcaW 2011). Conclusion To close, it must be remembered that whistle blowing is real and is here to stay. Likewise, it has really improved with the increasing numbers of those that are willing to go forward and be heard. Also, this has been greatly compounded by the rapid technological development and innovation in communications. The internet has made information readily available for anyone with a computer and an internet connection. On the other side, it has also paved the way for people to air in whatever is on their mind through various blogging spots and social networking sites. This technology has greatly increased the possibility of spilling the beans anonymously thereby protecting the whistle blower. Unfortunately, this opportunity may also be used for malicious intent to defame an entity. As such, companies would do well to harness these technologies and embrace the reality of the growing boldness of employees to speak out against wrongdoings in their respective organisations. However, in the end, stakeholders and employees, are not supposed to be opposing forces. Hence, careful crafting of policy that ensures the safety of the informants, confidentiality, impartial investigation, protection from persecution or on very sensitive issues, device methods for utilizing anonymity can greatly help companies and employees make the most of their symbiotic relationship. Whistle blowing need not be a problem but most be a rich source of opportunities provided this is harnessed with care and due respect. Stakeholders must try to see beyond themselves as superiors to the working class who are dependent on the company’s survival for their own. Bibliography Barnett, T. (1992). Why your company should have a whistleblowing policy. Available: http://www.allbusiness.com/management/347152-1.html. Last Accessed 17 March 2011 BBC News. (2003). NHS boss sacked for whistleblowing. Available: http://news.bbc.co.uk/2/hi/health/2641657.stm. Last accessed 17 March 2011 Black, W. (2010). Cash incentives for whistle blowers of control fraud. 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Available: http://www.scu.edu/ethics/publications/submitted/whistleblowing.html. Last accessed 17 March 2011 Serrat, O. (2008). Managing knowledge workers. Available: http://www.adb.org/Documents/Information/Knowledge-Solutions/Managing-Knowledge-Workers.pdf. Last accessed 17 March 2011 SIG plc. (2011). Whistleblowing policy and procedure. Available: http://www.sigplc.com/Corporate-Responsibility/Policies/Whistleblowing-Policy.htm. Last accessed 17 March 2011 Weil, V. (2011). Whistleblowing: What have we learned after the Challenger? Illinois Institute of Technology. Available: http://www.nspe.org/Ethics/EthicsResources/Otherresources/whistle.html. Last accessed 17 March 2011 Read More