UNIVERSITY OF

GREENWICH

ASSIGNMENT SUBMISSION COVER SHEET

SUBJECT CODE: BUSI1314
SUBJECTTITLE: BUSINESS ETHICS
PROGRAMME: BA (HONS) BUSINESS MANAGEMENT
SEGi ID: SCKLBABM1507043
UOG ID: 000905760
LECTURERS NAME: MR RAJARAM
LEARNING CENTRE: SEGi COLLEGE KUALA LUMPUR
SUBMISSION DATE: 16.12.2015

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TABLE OF CONTENTS
1.0 INTRODUCTION ------------------------------------------------------------------------------------- 3
2.0 DEFINING WHISTLEBLOWING ---------------------------------------------------------------- 3
3.0 EMPIRICAL EVIDENCE ------------------------------------------------------------------------ 4-5
3.0.1 LOYALTY ------------------------------------------------------------------------------------------ 4
3.0.2 CULTURE ------------------------------------------------------------------------------------------ 4
3.0.3 EDUCATION LEVEL ------------------------------------------------------------------------- 4-5
3.0.4 GEOGRAPHY ------------------------------------------------------------------------------------- 5
4.0 RISKS OF WHISTLEBLOWING ----------------------------------------------------------------- 5
4.0.1 INTERNAL WHISTLEBLOWING ----------------------------------------------------------- 5
4.0.2 EXTERNAL WHISTLEBLOWING ---------------------------------------------------------- 5
5.0 ETHICAL THEORIES OF WHISTLEBLOWING ----------------------------------------- 6-8
5.0.1 UTILITARIAN ETHICS ------------------------------------------------------------------------- 6
5.0.2 DEONTOLOGICAL ETHICS --------------------------------------------------------------- 6-7
5.0.3 EGOISM ETHICS --------------------------------------------------------------------------------- 7
5.0.3 MORAL ETHICS ------------------------------------------------------------------------------- 7-8
5.0.4 VIRTUE ETHICS --------------------------------------------------------------------------------- 8
6.0 PROTECTION ACT(S) TO WHISTLEBLOWING --------------------------------------- 9-10
7.0 CONCLUSION AND RECOMMENDATIONS ------------------------------------------- 10-11
8.0 REFERENCES ----------------------------------------------------------------------------------- 12-14

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1.0 INTRODUCTION
Since the prevalence of unethical conducts within organizations has become increasingly wide
spread in a global scale, workplace deviance has always been an endless dilemma for higher
management levels of organizations (Henle et al., 2005; Robinson and Bennett, 1995). Miceli
and Near (2005) argued that organization members are the most effective parties to reduce the
frequency of unethical conducts existing in organizations. This is whereby the most commonly
implemented tool used by organization members in the revelation of organizational wrongdoings
is whistle-blowing. An organization member's decision to disclose a misconduct is judged based
on organizational, situational and personal factors. Since whistle-blowers provide information
intentionally, and employ unconventional alternatives to make such disclosures, they are
susceptible to losing their organization statuses and potentially their careers in the job market
(Near et al., 2004).

2.0 DEFINING WHISTLEBLOWING

Whistle-blowing is defined as the revelation by former or current members of an organization of
illegal, immoral, or unethical conducts being controlled by their employers, to persons or
organizations of authority that are capable of taking immediate action (Brody et al., 1999).
Whistle-blowing is classified into internal and external whistle-blowing. According to Huston
(Anon), internal whistle-blowing technically involves reporting misconduct up the chain of
command within the organization with the intention of resolving the concerned issues. Whereas
external whistle-blowing involves disclosing information outside the organization, particularly to
the media, provided that inadequate action has been taken by the organization towards the
concerned problems.

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3.0 EMPIRICAL EVIDENCE

3.0.1 LOYALTY
The significant issue in whistle-blowing is that of organizational loyalty (Jubb, 1999). Conflicts
may occur between personal and organizational values, and between loyalty towards the
organization and also to society. However, an organization member does not necessarily whistleblow the organization wholly due to organizational loyalty being taken into account. While more
publicized incidents of whistle-blowing arise from concerns about the conducts of an
organization or its relative parties such as involving in questionable contractual, environmental,
employment, or safety practices (Dempster 1999), many lesser instances of whistle-blowing
harbor intentional attempts to redress acts of malpractice of an organization. In these cases, the
values embedded in the whistle-blower were both in line with the adopted organizational values
and the motivational cause of whistle-blowing (Dawson, 2000).
3.0.2 CULTURE
Although a crucial determinant for controlling acts of misconduct, whistle-blowing is affected by
culture (Patel, 2003). Hofstede (1980) theorize that individuals that portray individualistic and
egalitarian cultures such as the U.S. have a higher tendency to whistle-blow and show higher
acceptance and tolerance of whistle-blowing, unlike those in collective, hierarchical cultures like
Chinese or Confucian cultures. For instance, Patel (2003) found that accountants originating
from Australia are highly likely to whistle-blow compared to their Asian counterparts like
Chinese-Malayan accountants.
3.0.3 EDUCATION LEVEL
According to Dorasamy (2012),The obligations and ethics of higher and general education
cannot be compromised in view of incurred costs to government due to unethical conduct. While
higher education institutions may offer greater whistle-blowing protection, the culture of whistleblowing must further be institutionalized as a crucial determinant to carry out effective whistleblowing. Such imperatives arise from the fear of retaliation commonly occurring within many
higher education institutions where higher degrees of self-determination are dominant, but scarce
at the primary level (Vinten, 1999). The failure to develop a supportive culture towards whistleblowing as part of an ideal higher education governance will not stimulate constructive whistle-

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blowing, and it is only through institutionalized policies and regulations can the culture of
positive influence on potential whistleblowers prosper.
3.0.4 GEOGRAPHY
The power, rights and frequency to exercise whistle-blowing differ according to different
geographical locations from a global perspective, which in turn affects greatly the propensity to
blow the whistle. As to the context of cultural practices, according to Dennis et al. (2012),
Americans show greater potential in blowing the whistle as they perceive themselves as having
equal rights in relation to the involved parties in illegal, immoral or illegitimate practices. They
also have greater sense of security and hence show lowered caution in blowing the whistle. By
contrast, the Chinese are less likely to conduct whistle-blowing due to their collective nature as
they tend to follow the lead of the organization in terms of tolerating such unethical conducts
(Keenan, 2007).

4.0 RISKS OF WHISTLEBLOWING

4.0.1 INTERNAL WHISTLEBLOWING
According to Bensson 2014, organization members that disclose information internally are prone
to retaliation by their employers or higher management personnel. Consequently, the involved
parties who report any wrongdoings might potentially end up working in a hostile environment,
invoking upsets and boycott amongst other members, as well as potential demotion or even
direct termination of duties on a false pretence.
4.0.2 EXTERNAL WHISTLEBLOWING
Such outside disclosures raise ethical and legal issues of confidentiality and business secrecy
(Dehn, 2001). They also undermine the balanced relationships between businesses and the
media, whereby upon an unfortunate encounter with unjustified adverse publicity, will cause
collateral damage and disrupt business operations of organizations. In other words, media
disclosures open opportunities for unethical individuals to cause significant damage, rather than
raise the issue responsibly.

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5.0 ETHICAL THEORIES OF WHISTLEBLOWING

5.0.1 UTILITARIAN ETHICS
From a utilitarian approach, the act of whistle-blowing is perceived as the assessed outcomes of
different foreseen circumstances, and the implications of potential consequences on conflicting
loyalties (Padgett, 2009). The availability of solutions and whether the benefits of whistleblowing outweigh the sacrifices required will determine the outcome of whether or not whistleblowing occurs. According to Bentham (1996), acts that generate the greatest amount of
happiness for the majority must be regarded as morally obligatory acts. Moreover, utilitarianism
encourages one to treat others' well-being as a significant determinant when making ethical
decisions. Therefore, whistle-blowing should be considered as an obliged duty given that the
drawbacks of non-disclosure would mean that negative impacts would be greatly inflicted on the
public. John Stuart Mill's utilitarian perspective is also used to support the statement that whistleblowing should be a duty. The utilitarian principle of "do no harm" implies that whistle-blowing
is a duty if a non-disclosure act will harm others since this principle dictates that one's action
should be done otherwise. "Harm" can take a variety of forms which is not restricted to only
instances of physical pain. The frequency and amount of harm caused by the issue also
determines whether whistle-blowing should be obligatory. Mill also states that accountability
should be emphasized on the person responsible for causing harm to others. If one sees a
responsibility to prevent others from being harmed, then blowing the whistle on acts that may
prevent harm being inflicted to others (Padgett, 2009).

5.0.2 DEONTOLOGICAL ETHICS

From the Kantian perspective, employees should uphold the duty of blowing the whistle on
unethical conducts because it is the right thing to do. They are morally obliged to disclose any
wrongdoings to any involved stakeholders because the intention of moral action outweighs the
potential consequences of not whistle-blowing. Kant has not spoken specifically that whistleblowing should be a duty for all general circumstances. However, what is required is the
expectations of truth telling and the "good will" of the moral agent. Hence, according to such
principles, an organization member should blow the whistle provided that any information of
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others' or the organization's intentional misconduct is identified (Padgett, 2009). From the
viewpoint of justice which is equivalent to deontological philosophy, organization members are
compelled to internally and externally whistle-blow about any unethical or illegal practices
within the organization as the rights of knowing the truth is compulsory. Doing the contrary will
create unfairness amongst the organization members and also to the public.

5.0.3 EGOSIM ETHICS

From the egoist's point of view, it is uncommon that organization members encounter the issue of
deciding whether or not to blow the whistle. Whether is it due to fear of investigation done by
authorities or fear of perception by authorities as scapegoats for following organization policies,
by adhering to egoism, such issues can be prevented or eliminated (Clairmont, 2011). According
to Clairmont (2011), famous whistleblowers, for instance Ellsberg, Manning and Deep Throat,
will not look attentively of whistle-blowing at the least if they obeyed the egoism method of
making ethical decisions. The is due to the upcoming hassle or trouble encountered from the
aftermath which prevented such decisions to be taken. As such, egoistic employees will perceive
such actions as not being a duty but rather a choice to blow the whistle on unethical or illegal
practices. In other words, employees will only blow the whistle if their self-interest is concerned
and that they are not negatively affected in any way. However, if one is to ponder the possible
benefits of whistle-blowing and the associated negative consequences into consideration, some
degree of egoistic characteristics appears to be acceptable (Clairmont, 2011).

5.0.4 MORAL ETHICS

According to Arszulowicz and Gasparski (2011), whistle-blowing is regarded as morally
prohibited, as morally allowed, and as morally required. Further statements show that the most
plausible and commonly stated rationale for not blowing the whistle is given in terms of loyalty.
However, despite providing the norms of loyalty, there are some criteria to be followed in order
to determine whether or not whistle-blowing would be morally permissible or needed, based on
the following:
1) The organization, through its product or policy, causes considerable harm to the community.
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2) Any identified threats are to be reported to the immediate supervisor for acknowledgement of
the involved moral concerns, else the act of whistle-blowing is unjustifiable.
3) If the second criteria fails, then the employee must exhaust all internal procedures and
possibilities by highlighting the concerns up to the Board of Directors.
4) The whistleblower must have accessible and legitimate evidence that portray and justify the
observer's viewpoint of any unethical conducts done by the involved parties.
5) The employee must show belief that changes will occur after the matter has been brought
about to the public.
Hence, through judgment based on these established guidelines, the moral rightness and
wrongness of whistle-blowing is strongly dependent on whether or not these criteria have been
fulfilled. Fulfillment of such criteria provides employees with the motivation to blow the whistle,
thinking that whistleblowers should bear the responsibility for any action to be taken against the
wrongdoer. Whereas the contrary will lead to inevitable silence by the employees, believing that
by chance there will be something done to address the wrongdoing (Dehn, 2001).

5.0.5 VIRTUE ETHICS

According to virtue ethics theory, whistle-blowing is a wise course of action because it requires
one to tell the truth, to voice out justifications and to emphasize truth with others, thus promoting
positive virtues like honesty, courage and empathy. Organization members who uphold such
virtues are compelled to blow the whistle for the improvement of one's integrity. However, some
argue that whistle-blowing ignores the principles of virtues in different ways. For instance,
whistle-blowing is perceived as putting others' lives at risk, publishing stolen information and
degrading loyalty, privacy and integrity of information" (Backhaus & Crnkovic, 2011). Hence,
by analyzing from this point of view, whistle-blowing is concluded as not being an obliged duty.
A common argument with relations to whistle-blowing is between virtues of loyalty and honesty
(Bowden, 2005). Many organization members often face the effects of scarcity between these
two virtues, whether to be truthful or remain loyal to their organisation. Therefore, organization
members should properly select between these two virtues and choose a virtue which they deem
being more ethical in comparison to the other.

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6.0 PROTECTION ACT(S) TO WHISTLEBLOWING

According to Teen (2007), developed countries such as the U.S., U.K. and Australia have
introduced legislations related to whistle-blowing. In the U.S., the Sarbanes-Oxley Act 2002
requires the audit committee to establish ground rules for proper treatment of issues encountered
by the company in regards to accounting controls or auditing matters, and submission of
confidential and anonymous information by involved employees regarding questionable
accounting or auditing matters. It also contains civil protocols that offer protection to
whistleblowers employed by publicly traded companies from discrimination, and criminal
provisions prohibiting retaliation against organization members of both public and private
companies who whistle-blow to any personnel empowered with lawful authority. For instance,
scandals such as Enron, Tyco, and WorldCom significantly affected investor confidence
in financial statements and required an overhaul of regulatory standards.
Furthermore, Teen (2007) further clarifies that in the U.K., the Public Interest Disclosure Act
(1998) safeguards organization members in the public, private and voluntary sectors for a broad
range of disclosures. Qualifying disclosures of information in which the organization member
believes, with valid reasons, tends to show current situations, past elapsed scenarios, as well as
future-oriented cases are based on the following:
1) Criminal offence
2) Breach of legal obligations
3) Miscarriage of justice
4) Health and safety compromise of any individual
5) Environmental damage
6) Concealment of information with regards to the above scenarios
According to Lachman 2008, the False Claims Amendment Act of 1986 is primarily focused on
prohibiting false claims for reimbursement to the U.S., which also includes whistleblower
provisions. This regulation functions to protect whistleblowers who disclose violations of acts
involving fraudulent use of government assets. The whistleblower may be a current or former
employee, an external competitor, or any individual who managed to obtain primary consent of
fraudulent behavior, whereby such involved party could represent on behalf of any entity in
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filing law suits and recover 15% to 30% of any settlement as remuneration. Provided that the
government won the case, then the whistleblower could potentially win a substantial amount of
money. For example, in fiscal year 2006, the U.S. government regained a staggering record of
$3.1 billion in cases of fraud (DoBias, 2007). Also, Tenet Healthcare Corp's $920 million
settlement accounted for the largest percentage of the $2.2 billion from recoveries in health care.

7.0 CONCLUSION AND RECOMMENDATIONS

It is commonly acknowledged by organizational parties that prevalent unethical misconducts,
which cause breach of the Code of Ethics applicable to all working environments, will always
harbor the existence of whistleblowers. Henceforth, according to Transparency International
(2010), a few recommendations in which to strengthen the protection of whistleblowers as well
as offering change to the cultural norms of organizations in the making of internal policies are
stated as shown:
1. Essential Legislative Enforcement
While the existence of a legal framework is a prime determinant for whistleblower protection, it
is insufficient. Legislation should be enforced effectively and to maintain consistency throughout
its enactment. In order to provide assurance legal provisions are properly implemented, an
established public body with sufficient autonomy should be designated to monitor how the law
functions and to receive and investigate issues related to the law. Enforcement should include
consultations with key stakeholders such as trade unions and business associations in order for
the creation and implementation of agreement of whistle-blowing policies.
2. Good Communication and Staff Consultation
Whistle-blowing protocols must receive full support of the leadership of the organisation and
should be adequately promoted and communicated with clarity throughout the organisation.
During the process of design and implementation of policies, all involved stakeholders such as
employees and managers should be consulted, briefed and trained in a proper manner. The
accomplishments of whistle-blowing mechanisms must be communicated to the members of the
organizations and to the public at a regular basis, as well as consultation with staffs to identify
areas for improvement.
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3. Promotion of Whistle-blowing via Public Support

The perception of whistle-blowing should be altered whereby whistle-blowing serves as an
effective mechanism for preventing existing acts of misconduct and prioritizing the interests of
the community. Governments should provide support in public information campaigns as well as
initiatives to promote whistle-blowing which are conducted by professional groups, media, trade
unions and other civil bodies. Whistleblowers should not only be given protection by lawful
authorities, but also honored and supported.

Word Count: 2540 (excluding title headers)

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8.0 REFERENCES
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Clairmont, D. A., 2011. Moral Struggle and Religious Ethics: On the Person as Classic in
Comparative Theological Contexts. Wiley-Blackwell.

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Dawson, S., 2000. Whistle-blowing: A Broad Definition and Some Issues for Australia. [Online]
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Lachman, V. D., 2008. Whistleblowers: Troublemakers or Virtuous Nurses? Dermatology

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