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Normative Theories on Ethics on Whistle-Blowing

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Whistle-blowing in this context is the act, for an employee, disclosing what he believes to be an unethical or illegal behaviour to higher management (internal whistle-blowing) or to an external authority or the public (external whistle-blowing). Examples of unethical acts include sexual harassment and racial discrimination at work while illegal act include the accounting fraud by the Arthur-Andersen accountants for Enron (Sims & Brinkmann 2003).

Whistle-blowing is a controversial issue whereby the duties of employees towards the society, organization and self are often in a conflict of interest. Whistle-blowing is a moral obligation towards professionalism and the interest of the public (Bouville 2008).While at the same time, whistleblowing though being a duty towards professional ends and morals to protect the public, constitutes a violation of duty to one’s employer (Larmer 1992).

In the United States, a study done from 1994–2005 employee willingness to report wrongdoings in 2005 a mere 55% in general, reason being that many employees are hesitant to report their findings of ethical misconduct. Of which 59% believed no corrective action would be taken, 46% fear retaliation, 39% fear anonymity, 24% assumed someone else would report it and 18% did not know who to contact (Ethics Research Centre, 2005). The most recent report in 2011 shows this percentage having increased to 70% willingness to report wrongdoings since. Of which the highest proportion goes to simple acts of theft of company resources (70%) and lowest to whistleblowing employee conducting personal business affairs during company time (34%) (Ethics Research Centre, 2011).

In Turkey, according to a study by Nayir & Herzi (2012) of 327 turkish managers working at different levels in private businesses in the summer of 2009 show that anonymous-external whistleblowing is the preferred choice of whistleblowing as the whistle-blower whether his orientation is towards individualism or collectivism would prefer to be hidden in their organization and generally are shown statistically to not like to share their observations of wrongdoing they will be ostracized in the organization (Qusqas & Kleiner 2001; Tesser & Rosen 1975).

According to the Singapore Institute of directors’ survey in 2007, 70% of companies in Singapore have whistleblowing policies in place. (Peter & Dione 2011). Prior to this report a year before, in the Deutsche Press-Agentur (2006) it was stated that publicly listed Singapore companies have placed whistle-blowing procedures for internal whistle-blowing however it is noted that few companies have introduced measures to protect informants from retaliations.

The Singapore Code of corporate governance was created by the Monetary Authority of Singapore (MAS) in 2007 to set a regulatory and supervisory framework for Singapore listed companies. Under the ruling of the MAS, it suggests that companies should disclose all whistleblowing practices under guideline 12.7 and to give explanations for deviations from the Code in the company Annual reports (Monetary Authority of Singapore, 2013).

As Scott (2000) states, whistle-blowing constitutes a positive duty where the whistle-blower should aim to not harm others while working towards benefiting the public interest. Whist whistle-blowing creates a conflict of role-related obligations and general obligations as members of workplace organization, society and our social and family units (Frey & Wellman 2008). To develop clarity on the issue, I will be applying normative ethical theories to demonstrate the various teleological and deontological theories in action. As my insights, I will be covering the issue of whether there should be a law in place to protect whistle-blowers.

Main Body
Whistle-blowing is an ethical dilemma because of its wide reaching implications to all parties involved through the action of the whistle-blower (Frey & Wellman 2008). Normative theories consider factors such as 1) principle, 2) duty, 3) obligation, 4) rights and 5) consequences (Trevino & Nelson 2010) of which duty for the employee to whistle-blow can be analyzed. In this assignment I will be using enlightened egoism and utilitarianism to represent teleological ethics and Kantianism and justice ethics to represent Deontological ethics.

According to Ferrel et al. (2005), Teleology is the study of ethics focusing on the consequences of which the act is deemed ethical. In this context, an act is deemed ethical if its consequences benefits either self-interest or utility on the whole. With reference to Crane & Matten (2004), the application of enlightened egoism to the case of duty to whistle-blow unethical or illegal acts is based on the consequence of whether individual desires or interests are promoted in the end. As such, a person operating in enlightened egoism will agree that whistle-blowing of unethical and illegal acts, acts on the basis that the underlying outcome would be benefit to the whistle-blower’s self-interest in terms of individual pleasure or avoidance of pain. In Duska’s (2012) article, self-interest is an important consideration in being ethical even with regards to having a duty to whistle-blow because the basis of purpose and action stems from self-interest. The process of the moral agent identifying himself as having a duty is intricately related to his moral awareness which stems from his character and thus branching out to form his self-interests.

The application of utilitarianism to the case of duty to whistle-blow follows the line of whether or not the consequences of the actions lead up to greater utility for the greatest number of people at the highest level of happiness. On the basis of duty to whistle-blow unethical or illegal acts, Utilitarianism deems an act ethical where it follows that the act leads to the collective welfare of all parties (Hartman & DesJardins 2010). According to (Sims & Brinkmann 2003) utilitarianism may be seen to cause fraud in the system as in the case of Arthur Anderson auditors for Enron. The likelihood that a greater good would be produced as a result of whistle-blowing financial fraud using utilitarian ethics justifies the means of whistle-blowing. However when whistle-blowing a minor act such as theft in the organization to external whistle-blowing agencies is done, it could undermine the management’s authority, trust, relationships or the organization’s reputation as a result. Following Beauchamp et al. (2008), deontology is the study of ethics which focus on the motivations and principles of the actor. Of which an act is deemed ethical when the actor fulfils all agreed upon rights, duties and principles set out.

Kantianism states that ethical decisions are first determined by whether they follow fundamental truths of human nature and next by the willingness of the actor in being able to live with his actions. In Grant’s (2002) journal, a person acting out of Kantian ethics would view an unethical or illegal act in the organization as something to be reported as it is his duty to report it as it would a violation of self-respect on the contrary. As such the person would relate the unethical or illegal act as a personal violation and take action upon it where possible. Ripstein (2000) argues that Kantianism does not provide a clear ethical duty when there is a conflict of duties between duties. On the one hand, it is the duty of the would-be whistle-blower to inform higher authority either internally or externally, on the other hand, he also has an obligatory role to protect the reputation of the organization or the boss by not bringing up the issue to the higher authority (external whistle-blowing agency or senior management).

According to Rawls (2001), Justice Ethics states that ethical decisions are based upon obtaining equal rights for all parties and achievement of benefits and burdens being distributed evenly to all parties. A person operating on the justice ethics system is likely to take the stand of whistleblowing not being a duty on the basis that it incompatible with the approach of justice ethics. Lindblom (2007) suggests, there be 2 options to employee whistle-blowing. 1) To ban whistle-blowing and 2) to not approve contracts which restrict whistle-blowing. In justice ethics, the duty of whistle-blowing within the organization does not agree with the notions of equal rights for all parties and the inherent equal distribution of benefits and burdens. Like other theories dealing with mismatching value systems, justice ethics take the stance of getting rid of the issue. Should there be a law enacted to protect whistle-blowers?

In the context of whistle-blowing being a duty of employees to report unethical and illegal acts, I find justice ethics to be the best way in explaining the dilemma. Firstly, Justice ethics focus on the roots of the issue which are the agreed upon roles and behaviour of society, of which organizations, individuals and the public operate on consistently. Kantianism, a theory related to justice ethics in its use of principles, duties and rights, is also feasible but not as strong because it assumes that universal principles are infallible and that all peoples would support the instance the ideology (which is not true). Supporting my stand to not impose a law is empirical evidence (Armenakis 2004; Miceli & Near 1992) suggesting that threatening retaliation does not discourage whistle-blowing because threats impose a cost and suggest high risk of more costs to potential whistle-blowers, on the contrary, it encourages whistle-blowing instead. To add to that, according to Carson et al. (2008), a law for whistle-blowing protection morally corrupts the influence of whistle-blowing and makes it less ethical on the basis of duty. It creates a framework in which moral character is harmed since there is no longer any liability to act in a principled and morally responsible manner.

There is danger in enacting laws for whistle-blower protection as it would result in the promotion of mercenary-like behaviour rather than morally ethical behaviour based on principles, rights and duties. The flip side is however, in terms of practicality, creation of laws for whistle-blowing protection would result in the entrance of employees who support enlightened egoism to take part in whistle-blowing more frequently. It creates a system whereby the employees are more likely to report both small incidences like theft in the office and big incidences like corporate fraud externally rather than internally. In this case, it is up to the organization to deal with the internal corporate governance issues of whistle-blowing by setting up functional systems of internal whistle-blowing and to manage them ethically to allow the employees to have a medium of which to communicate with management proper. On the applicative side of the equation, justice ethics requires a general consensus in terms of acceptance into the system (organization and society) as normative forms of ethics like other systems are useful on the basis of consideration and the support it has garnered amongst decision-makers.

As shown in my analysis, the use of normative theory generated much insight on the issue of duty to whistle-blow. However, it is clear that there will be divergent opinions based on the normative theories a person is functioning on.

I have chosen justice ethics as my ethical framework because it addresses the ethical issue at the root of its appearance which is at the level of intention and creates a system in which there is an agreement of right action amongst stakeholders.

In terms of enacting a whistle-blowing law to protect employee’s rights, I do not agree to enact a law for whistle-blower protection because the basis of ethical behaviour should come from the motivations of the individual to be morally just. Creating norms for whistle-blowing and policing management to ensure less retaliation do not seem viable according to research and would disconnect moral obligation to society from the whistle-blowing process.

The limitation of this assignment is that it does not consider the descriptive aspect of ethical decision-making and in so doing, the practical value normative theories in organizational settings cannot be realized since ethical decision-making involves not only knowledge but context of practice. As stated in (Trevino & Linda Nelson 2007) when looking for whether a certain conduct is likely to be followed, it is important to learn of whether there are conflicts of interest within an organization in order to know the legibility of the its code of ethics.


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