Whistle-blowing is a disclosure by organization members of illegal, immoral or unethical practices under the control of their employer, to persons or organizations that may affect action.
Immoral practices can be violation of law, violation of public interest such as fraud, violation of health/safety, corruption etc. the organizations that may affect this action can be media, public interest groups, enforcement agencies etc.
TYPES OF WHISTLEBLOWING:
Internal whistle-blowing:
To report misconduct to a fellow employee or senior management within the company.
External whistle-blowing:
Report misconduct to outside entities or general public.
ETHICAL ISSUES RELATED TO WHISTLE-BLOWING:
“The generally prevailing view of the whistleblower within business on the part of the management and colleagues is that this person is the traitor to the organization.”
(Richard DeGeorge)
“Employees have both moral and legal obligations to be loyal to their employees.”
(Beauchamp and Browie)
Whistle-blowing is a conflicting matter in terms of employee loyalty. On one hand it may be seen as loyal and on another, disloyal. It is assumed that employees have a vow to protect the dealings of the organization.
External whistle-blowing is wrong because an employee has a contractual duty to be loyal to corporation he is working in. Whereas Ronald Duska says:
“One does not have an obligation of loyalty to a company, even a prima facie one, because companies are not the kind of things that are properly objects of loyalty.”
This means it is impossible to associate loyalty with a company because it is an abstract entity. Because company does not have a mind of its own, instead, it is made up of people working towards the same goal.
A whistle-blower is not disloyal in reality. We can make an argument that a whistle-blower shows greater loyalty as compared to the person who ignores any malpractices in the organization.
Whistle-blowing is a brave act of conscience and a person who blows the whistle may carry heavy personal costs.
One should do what is right, lost income can be replaced but lost self-esteem is difficult to retrieve.
IS THERE A RIGHT TO BLOW THE WHISTLE?
Nobody can answer whether blowing whistle is good or bad because the problem is that it has effects, good as well as bad. Sometimes whistle-blowing causes more problem than good. If there is an issue that has to be addressed to the top authorities then it should be channeled through right authorities.
If a whistle-blower starts talking to his co-workers about some malpractices, the office environment gets effected. And also the claims of whistle-blower are not always genuine. As a result other employees get dragged into it unnecessarily and company gets involved in lawsuits. By the time the company proves its innocence it has already suffered a loss of thousands of dollars.
Whistle-blower should approach the internal authority prior to externally blowing the whistle. Because sometimes the top management is not aware of the problem and employees make the situation worse by blowing the whistle.
An employee has an ethical obligation to blow the whistle. It is beneficial for him to act ethically and show loyalty by not only obeying the rules and regulations of the company but also reporting genuine wrongdoings that may affect the public at large.
ETHICAL PERSPECTIVES ON WHISTLE-BLOWING:
DEONTOLOGICAL ETHICS:
For example, a company is making unsafe consumer products in order to save some money. An employee working in that organization sees this as immoral and reports the media about it. A whistle-blower would do this according to Kant’s duty-based ethics. Moral obligations have nothing to do with consequences.
RIGHTS THEORY:
Whistle-blowing is not morally required according to rights theory. Everyone has a welfare right to make income and support themselves and their family, so they cannot do this without a job. By blowing the whistle he/she may get fired so it is better to ignore any malpractices in the organization.
UTILITARIANISM:
Utilitarianism is based on principle to predict the consequences of an action. Utilitarianism is more clearly understood by cost-benefit analysis. Whistle-blowing has many moral venues. On one side the welfare of employees must be considered and on the other side the consumer. Utilitarian simplify whistleblowing by pleasure versus pain issue. If whistle-blowing will generate less pain than pleasure then it is a good act. If not, then it is wrong and unethical
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THE FORD PINTO CASE:
In the Ford Pinto case it is a well-known fact that before the production of this car Ford engineers were aware of Pinto’s potential for catastrophe. They had a crash test at a top secret site and every test at 25mph resulted in ruptured gas tank of the car. Ford employees under the oath denied this fact and this car flooded the market for about eight years. An internal cost-benefit analysis illustrated that it was not profitable for the company to make changes sooner. Thus, they placed monetary worth on human life. Total benefit was $49.5 million and total cost was $137 million. Therefore, none of the employees blew the whistle because they had a fear of being fired from the job.
ISLAMIC PERSPECTIVE:
Prophet Mohammad PBUH said:
“Discussions are confidential (not subject to disclosure) except in three places: shedding unlawful blood, unlawful cohabitation and unlawful accumulation of wealth.”
(Abu Dawud)
Prophet of Allah (P.B.U.H.) said:
“He who saw Munkar (wrongdoing) amongst you should prevent it with his hand, if unable to, then with his mouth (i.e. whistle blowing), if unable to, then (dislike it) in his heart and that is the least of faith.”
(Abu said al khudri)
These sayings of Prophet Muhammad proved that whistle-blowing is also encouraged by Islam.
Richard De George’s Theory of Whistleblowing
The philosopher Richard DeGeorge proposed that external whistleblowing is morally permissible when three conditions are fulfilled. Whistleblowing is termed as acceptable by DeGeorge when following three conditions are met:
If any product or policy cause serious harm for the general public.
If an employee realizes an intense danger to the consumer of a product he or she should report it to his supervisor. Therefore manager responsible for the manufacturing of the product should be aware of its threat.
If an employee’s immediate supervisor does not take the moral concern regarding the product into account, thus the internal chain of command has been exhausted.
The firstcriteria explain the intensity of issue. The explanation of harm can be assessed in terms of physical, emotional or financial harm. The second and third criteria can be interpreted that employee tried hi level best to address via internal means.
DeGeorge holds that whistleblowing becomes morally required when in addition to the previous three conditions the following two conditions are met:
There is sufficient accessible documented evidence available to convince an impartial individual.
The employee must have valid and strong reason that by going public, necessary changes will be brought. Moreover, benefits of whistleblowing must be worth the risks one takes and the dangers to which one is encountered.
WORLDCOM’S WHISTLEBLOWER
Cynthia Cooper Case:
In March 2002, when WorldCom was struggling tocoordinate and integrate the complex mess created by the 65 companies it had acquired, World-Com’s highly respected chief financial officer,Scott Sullivan, moved $400 million from a reserve account and recorded it as income in the company’s public financial reports. Alerted to this, CynthiaCooper, the perfectionist head of WorldCom’s internal audit department, began to secretly examinethe company’s books. She soon discovered that Scott Sullivan and David Myers, for years had publicly reported billionsof dollars as capital expenditures when they were in real the operating costs. Uncollectible receivables were ignored, and reported as income what were reallyreserve funds, and did all this with the help of ArthurAndersen, the company’s auditor and accounting firm. Though angrily threatened by Sullivan, andrisking her job and career, on June 20, 2002, Cynthia Cooper courageously met with the auditcommittee of WorldCom’s board of directors and toldthem what had been going on. On June 25, World-Com’s directors announced the company had inflatedits profits by over $3.8 billion-an amount later roseto $9 billion-is the greatest accounting fraud in history. Sullivan and Myers were arrested; WorldCom’s shareholders lost $3 billion; 17,000 WorldCom workers lost their jobs.It was the biggest fraud in U.S. corporate history. WorldCom declared bankruptcy in July 2002, after its stock’s value had declined by $180 billion and its founder; Bernard Ebbers had left the company. CynthiaCooper was later recognized as one of the three “Persons of the Year” by Time Magazine.
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Analysis Based on Kantian Ethics
Philosopher Immanuel Kant is renowned for his ethical theory which is categorized under Deontological ethics. According to his theory it can be assessed that it is the intention behind an action rather it’s consequences that make an action good. Deontological Moral system is based on the categorical imperative. According to Kant to act from a good will is to act from a duty. The act of Cynthia Cooper’s whistleblowing fits into this categorical imperative of duty to do the right thing. The sole motive of the action is report financial crime; there are no monetary gains or self-interested motives. A Kantian view justifies Cynthia Cooper’s whistleblowing as reporting financial crime is morallyright thing to do, thus moral obligation has nothing to do with consequences.
Since Kant believed that every action has a maxim, we need to ask what would happen if the principle (maxim) of an action were a universal law (one that everyone acted on). Would a world where everyone acted on that principle be possible? If it can, then the decision to act would be morally permissible” (Bowie, 1999). Therefore the proposed act of whistleblowing passes Kant’s test of universizability. If whistleblowing were a universal principle, all would benefit from the transparency and investor confidence would be maximized; therefore, according to Kant, the act of whistleblowing is morally permissible.
Analysis based on Kohlberg’s Moral theory of Development
Kohlberg’s theory is useful because it helps us understand how our moral capacitiesdevelop and reveals how we may mature in our understanding of our own moralstandards. According to Kohlberg Cynthia reached the sixth stage of moral development: Universal Moral Principles Orientation. This is because at thisPost conventional stage, right action comes to be defined in terms of moral principles chosenbecause of their reasonableness, universality, and consistency. Cynthia believed that manipulation of financial accounts is a universal crime and therefore she reported the misconduct based on the moral principle orientation. Cynthia Cooper justified her choices on the basis of moral principles and obligations as during the interview with Times Magazine she said:
“There is a price to be paid. [But] it comes back to the values and ethics that you learn…..The fear of losing my job was secondary to the obligation I felt.”
WHISTLE BLOWING IN PAKISTAN
Whistle blowing internal and external is usually not practical for employees in Pakistan because they don’t posses the resources either within the firm or within the civil society. They lack strong moral beliefs, confidence, will power and commitments and are scared of the consequences. Today, media especially journalism is acting as a whistleblower to the public.
The current political environment in Pakistan threatens whistle blowers in a corporation from upholding their voices against illegal practices of their organization. Employees who blow whistle are refrained from doing so and observe difficulties and barriers such as life threats, political insecurity, risk of career and family insecurity.
In our country, unsafe medical practices and unethical behavior is at such a high level and widely spread that blowing a whistle to alarm the authority would be simply inaudible. Health care fraud is very common in Pakistan. False claims, patients required paying illegal fees, absence of staff and refusing to see patients in government hospitals and referring them to private clinics are violating ethical spheres.
95% of the population in Pakistan holds the view that our health sector is corrupt. The fear of been victimized, loosing the job and career, is the main concern very often trainee doctors keep quiet and do not raise their voice against their seniors.
RICHARD BARLOW’S CASE
Richard Barlow is an American intelligence analyst and a former senior member of the Central Intelligence Agency. He lost his job and was charged of being disloyal to CIA. Barlow learned that the top US officials were allowing the sale of the F-16 fighters to Pakistan in 1989. It was against the 1985 Pressler amendment of the Foreign Assistance Act which prohibited the sale of any material or armaments which might assist in the development or manufacturing of nuclear weapons.
He also found that the officials were concealing this information from Congress since telling the truth would have legally obligated US government to restrain from giving military aid to Pakistan at the time when it was being provided, through Pakistan, to Afghanistan against Soviet Union.
Barlow therefore blew a whistle without considering the consequences. As a result he was asked to prove himself before Congress and court. He was charged of being a traitor and an adulterer. He lost his job. It was life altering experience for him which damaged his marriage, career and left irreparable dents on his character.
He is quoted as saying: “They smeared my name in truly extraordinary ways that no one had ever seen before”
If he had been listened to, many people believe that our country would have never got its nuclear bomb.
ETHICAL IMPLICATIONS
KANTIAN ETHICS:
Immanuel Kant is the founder of deontological ethics. He states that ethical behaviors are those which are duty oriented. A person must perform what is his duty, not what’s good. The act of Richard Barlow is justified on Kantian grounds. Sacrifice of self interest for the greater interest of the society was the act performed by Barlow.
LOYAL AGENT ARGUMENT:
Loyal agent argument reduces an employee from being human to just being an organ of the organization. Loyalty does not imply that we have a duty to refrain from reporting the immoral actions of those to who we are loyal. An employer who is acting unethical is not acting in his own best interests and an employee is not acting disloyally in blowing the whistle.
LEGAL PROTECTION TO WHISTLE BLOWERS
One of the early laws that protected whistleblowers was the 1863 United States False Claims Act (revised in 1986), which tried to counter fraud by the US government during the Civil War.
Under the 1st and 14th Amendments to the U.S. Constitution, state and local government bureaucrats are prohibited from opposing whistleblowers. Boards like Civil Service Reform Act are created
Whistle blowing has gone high tech; therefore steps are taken to ensure safety of them. There are different websites available which guide employees on ethical issues like national whistle blowing centre(NWC)
Federal (equal employment opportunity) laws also have protection provisions for whistle blowers. If you observe a prohibited discrimination against employees you may report the concerned authorities.
Consumer Rights Commission of Pakistan has stated the unavailability of protection to whistle blowers and lack of transparency as the major causes of corruption in our state. Therefore, it has created an interface in the form of Freedom of Information Bill 2008.
Summarizing:
“Whistleblowers not only provide the initial stimulus for improving organization efficiency and effectiveness, but also they are often the source of solutions to organization problems” (Miceli et al., 1991).
Whistle blower observes a dilemma between serving as a loyal agent and preventing social harm. This implies that he should reconcile his own interest with the general interest of the organization. Utilitarian considerations therefore cannot furnish a definitive guide in this context.
Whistle blowing must be institutionalized. This means that there must be a set of procedures for employees to report the fraud internally before they raise the matter in the outside world
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