Traditionally organizations have adopted the objective of maximizing profit for the business itself and for the welfare of the business only. In the new generation managers of organizations (whether it is a corner store or a large multinational corporation), they are expected to maximize profit and at the same time act as ‘good’ corporate citizens for the welfare of society. Society expects managers to adopt the concept of TQM (total quality management.)
Due to this change from traditional management responsibility to modern manager’s responsibilities, ethical factors and social responsibility have become important aspects of managing an organization.
Ethics outlines the standards of an organization of what is morally ‘good’ or ‘bad’. The ethical dilemmas with in an organization can create concerns among employers and employees as it conflicts with their individual personal beliefs.
This raises the issue of whistle blowing, which is when “individuals report unethical practices by their employer to outsiders”.
The reason for whistle blowing is that the whistle blower believes that unethical practices are being performed and he or she is willing to preserve the ethical standards in our society.
Whistle blowing may seem ethical to society but it is unethical to the organization itself. From this conflicting factor, it can create problems for both the whistle blower and the organization (manager) itself.
There are a number of problems that arise for the employee who is whistle blowing :
* First is that the employer may retaliate by dismissing the employee who is whistle blowing as he or she may view this action as not staying loyal to the manager. There are now laws preventing the dismissal of an employee for whistle blowing as this employee is taking action for the welfare of society. There has been much emphasis on whistle blower protection in the present day than in the past.
* Another problem for whistle blowers is that fellow employees or co-workers may discriminate against the whistle blower as they may believe the whistle blower is acting unethically towards the manager.
* The whistle blower may be transferred to a lower position in his current work career. Therefore his job career is questioned and cause personal stress for the whistle blower due to a feel of job insecurity.
* Whistle blowers could have problem mentally, emotionally, physically and spiritually as he or she realizes the impact or consequences that will occur to them as an individual from internal organization whistle blowing.
Whistle blowing not only creates problem for the employee whistle blowing, but it also creates problems for the manager and organization as they are the accused of committing unethical practices.
The problems that may arise for the organization includes:
* It may harm the organizations image, or name in the long term as it affects how customers view the company if the whistle blowing is exposed to the media. This concept also applies if the whistle blower has made false accusations, as customers will remember the organization as ‘the company in the media for unethical practices, even if it can not be proven’.
* Whistle blowing also forces customers to question the organization that is accused. Consumers may wonder if there are more unethical practices that are being performed by the organization and not just the one made public.
* Whistle blowing usually results in law suits, or legal investigations which are unfavorable to the organization. The accused organization also receives unfavorable publicity that must not be ignored to display to the public that they are in fact ethical organizations.
* Attention will be drawn to the organization as the whistle blower will be closely watched for misconducts that may occur as a retaliation effect. In an article ‘Protection of whistle blower’, it stated “once the whistle has been blown, the company must be able to demonstrate that any future adverse action against the whistle blower, including changes in pay, benefits, status, primary job duties, shifts, are justified by evidence that the whistle blower is being treated just as similarly situated employees who did not make complaints”
Whistle blowing should be perceived as an advantage to the organization as it helps create, ‘good’ corporate company in our society. Many managers view whistle blowers as a threat to the organization, but in fact they are raising negative issues that are taking place with in an organization that needs to be rectified for the welfare of society. It is usually assumed knowledge for managers and is expected to follow their responsibilities as managers.
Whistle blowing should be encouraged as a valid method to control unethical behavior and to establish a level of social responsibility if internal methods fail to address the unethical issue.
Before whistle blowing occurs, the internal methods that should prevent unethical behavior should include:
* Codes of conduct which helps guide the organization not to practice unethical behavior in its operations.
* Ethics training which encourages ethical behavior among employees.
* Ethic hotlines, which allows employees to bypass the normal chain of command to report someone practicing unethical behavior.
If these methods were applied and there was still unethical behavior occurring in the organization, then whistle blowing should be looked upon as a learning experience for the organization.
The organization should act ethically to preserve the environment for the next generation, respect employees, customers, and also to value yourself as a manager, the organization you work for and knowing you are working with high ethic standards.
The organization must also realize that it is their responsibility to act socially responsible to act for the self interest of the company and the interest of the external stakeholders.
Whistle blowing helps organizations to be socially responsible, which is in itself an ethical issue. There are many reasons why an organization would want to act socially responsible.
The public expects organizations to be socially responsible in today’s society. Consumers have increased their social expectations today than ever before, which makes it hard for organizations not to be socially responsible.
From this social expectation it allows an organization to achieve long run profits more easily and securely as there is better community, and business relations. This also creates a more positive business image.
A business should also feel that they have the ethical obligation and conscience to do the ‘right thing’ to be socially responsible. Whistle blowing encourages this through moral values and beliefs.
Companies must also realize that whistle blowing can also enhance their public image as it shows that they have an ethical workforce, working for their organization. It displays to the public that the strict chain of command of the organization does not affect what an individual wants to express, whether it is whistle blowing on an unethical issue or something regarded as not as important. This makes the public feel relieved, as the company is still acting ethical, as the whistle blower can bypass the strict chain of command to express unethical views of the organization.
Whistle blowing may prevent the harming of the environment, which is an issue that is considered important as a cleaner environment creates a better community to live in and work for.
Whistle blowing can prevent more implementations of government regulations. This can be a negative aspect to society as there are economic costs associated with new government regulation. It also affects managers by preventing decision making flexibility.
Whistle blowing will create a socially responsible company in the long term by continuing to rectify unethical practices, forcing the organization to act ethically ‘right’. This raises shares as the public will view the company as a low risk company, encouraging investment because of it being socially responsible.
Whistle blowing can force an organization to solve a problem before it becomes a more costly and serious problem in the future. Managers can spend more time on accomplishing goals instead of solving problems that arise from whistle blowing.
An example of this can be seen by the case “Managers who made a difference, Ross Pownall, Managing Director of NZ Food Producer Cerebos Gregg’s” from (Robbins.S.P, Bergman.R, Stagg.I, 1997, pg 146).
This case shows us that the manager of Cerebos Gregg’s, Ross Pownall was faced with a tough decision in March 1994. The company was faced with a problem of glass being found in six jars of pickles and relishes which the company had produced. The decision was to decide whether the company should go public and act ethically or be silent about this matter.
Pownall decided to go public and demanded a recall of not only the four production lines that was affected, but thirty production lines to be safe and socially responsible. Although it cost the organization one million dollars to do this, it is the right decision made by Pownall.
First Pownall made the decision to recall in the interest if the public which makes the company socially responsible and is an ethical act. Secondly Pownall could have been faced with bigger problems than just a recall, such as a death of a customer as a result of not recalling all the jars of pickles with glass pieces in them. The organization could have closed down in the long term as the public will never have confidence in an unethical company.
Managers such as Pownall has acted in an ethical way and also can be seen as a role model for the organization which is important in a company, because of the leadership responsibilities involved in managing a business.
Whistle blowing may be embarrassing for the manager, but as a leader with employees following directions, they learn a lot from managers. It is important to participate in ethical practices for the responsibilities to his/her employees as much as it is to external characters. Managers are often perceived as role models in an organization.
The case “The Socially Responsible Body Shop” from (Nelly.D, Gibson, Ivancevich, 1995, pg 97) shows an organization called ‘The Body Shop’ which is a socially responsible company that developed into becoming the role model company for the cosmetic industry.
‘The Body Shop’ only sells natural, non animal tested products which are safe for the environment. This shows that the organization is not only concerned about profit maximization but also is concerned about the environment.
‘The Body Shop’ also teaches undeveloped nations how to make paper without cutting down forests and trees. They believe that this is a social obligation that they need to fulfill as the environment must be preserved for the next generation.
In order for an organization to be socially responsible, the manager must have strong ethical standards. Whistle blowing can force managers to think in terms of the whole organization and society instead of his/her personal wants.
To ensure ethical behavior in an organization, it is not only the legalities of an act or illegalities. Ethics is more complicated and usually depends on the consequences of actions. A manager’s decision making can affect the organization itself, the environment, economy and many more things.
E.g. If a manager decides to package products using paper, and he/she decides to use new paper which is made by using trees from forests, it affects the environment as it destroys natural resources. The product inside the packaging may be non recyclable which is used in land fills, and is once again affecting the environment.
This example shows that managers’ decisions can affect the whole society and is important to think ethically and act socially responsibly. A whistle blower could report this information to the public and, the public could place pressure on the organization to become environmentally friendly. Whistle blower is the voice of ethical people in a way and can help create an ethical workforce in our society.
Whistle blowers require more protection from retaliation acts by managers which is a concerning issue that needs more attention.
Whistle blowing should be regarded as a valid method to control ethical behavior in our workplace and to ensure that the organization is performing in a socially responsible way. Whistle blowing may be a disadvantage for the organization in the short term but in the long term it is an advantage for both the organization and society.
1) Robbins, S., P., (1998) Organizational Behavior (8th ed), Prentice Hall, New Jersey.
2) Bartol, K., Martin, D., Tein, M. and Matthews, G. (2001) Management, A Pacific Rim Focus (3rd ed), McGraw-Hill, Sydney.
3) Daft, R., L., (2000) Management (5th ed), Harcourt College Publishers, U.S.A.
4) Pascale, R. (1990) Managing on the Edge Penguin, London.
5) Electoral and Administrative review commission, (1991) Report on Protection of Whistleblowers Brisbane, Queensland.
6) Donnelly, J., J., H., Gibson, J., L. and Ivancevich, J., M. (1995) Fundamentals of Management (9th ed), Irwin, U.S.A.
7) Robbins, S., P., Bergman, R. and Stagg, I. (1997) Management Prentice Hall, Sydney