2.0 Review of Literature on Whistleblowing
There are two central problems in designing and implementing policies and programs to promote whistleblowing against corruption. The first is how to encourage the "silent majority" of public officials and employees to report a wrongdoing despite the risks. The second is how make whistleblowing effective in creating desired changes in individual, organizational and societal practices. This chapter reviews the theories and practices in whistleblowing to generate insights on these two central problems in whistleblowing.
2.1. Encouraging whistleblowing
Whistleblowing among employees appears to be a rare behavior especially in societies and organizations that do not encourage it as a policy. Impediments to whistleblowing against certain wrongdoings include threats to professional careers and physical security, social ostracism, absence or ineffective legal framework, the lack of evidence, absence of clear procedures on whistleblowing, and the perception that nothing will be done about a reported wrongdoing. Identifying and understanding the factors that deter whistleblowing among individuals offer valuable insights on how to design appropriate and effective whistleblowing policies.
2.1.1 Benefits of whistleblowing
Some authors contend that whistleblowing is ineffective in creating change. For example, Near and Miceli (1995:703) assert that whistleblowing, sometimes, benefits no one and harms many, including the whistleblower who may suffer retaliation. They warn that whistleblowing should not be resorted unless the desired outcomes will be realized. For all the controversy that it generates, whistleblowing actually produces benefits for organizations and societies. These benefits, however, are mostly left unappreciated in the heat of controversies surrounding many whistleblowing incidents.
Nonetheless, several studies have documented the benefits of whistleblowing. For example, in a survey of federal employees in the United States, Jos, Tompkins, and Hays (1989) reported that whistleblowing resulted in policy, procedural, and personnel changes (Table 11). The authors also noted that whistleblowing led to internal and congressional investigations that ultimately resulted in the criminal indictment and conviction of perpetrators of wrongdoing.
Table 11
Reported effects of whistleblower actions on the organization
| Percentage of survey respondents |
Total reporting changes within organization | 62 |
Managerial changes | 37 |
People transferred/replaced/not reappointed | 37 |
Personnel practices | 24 |
Departmental reorganization | 17 |
Safety improvements made | 11 |
Policies changed | 32 |
External Investigations | 51 |
Outside Agency (FBI, EPA, NRC) | 31 |
Congressional hearings/investigations held | 28 |
Criminal investigation | 22 |
Indictments resulted | 11 |
Convictions obtained | 12 |
Source: Jos, Philip. H., Mark Tompkins, and Steven Hays.1989. "In Praise of Difficult People: A Portrait
Of the Committed Whistleblower". Public Administration Review, Nov/Dec.1989; 49, 6; Academic Research
Library, p. 555
Johnson and Kraft (1990) provide an assessment framework for looking at the concrete benefits of whistleblowing (Table 12). Exploring several case studies on whistleblowing incidents in the United States, they concluded that whistleblowing led to : 1) certain changes in the government's policy agenda, 2) some substantive changes in public policies, and 3) changes in bureaucratic and organizational procedures. These accounts validate the benefits of whistleblowing as an instrument to bring about certain changes in organizations and the society.
Table 12
Measures for assessing whistleblowing policy impact
Dimensions | Indicators |
Changes in policy agenda | |
Changes in bureaucratic procedures | |
Changes in the substance of public policy | |
Source: Adapted from Johnson and Kraft (1990)
The Criminal Justice Commission of Queensland (Australia) enumerates some of the most important societal benefits of whistleblowing against corruption and other forms of wrongdoing. It asserts that whistleblowing protects and promotes the public good by
stopping wrongdoings;
stopping other people from being disadvantaged by the wrongdoing;
preventing danger to the health and safety of the people;
preventing serious damage to the environment;
creating an opportunity to put better work procedures into practice which can prevent wrongdoing in the future;
bringing to justice the people responsible for wrongdoing.
The Criminal Justice Commission also provides the following organizational benefits of whistleblowing:
early identification of conduct needing correction;
early identification of weak or flawed systems which make the organization vulnerable to loss, criticism, or legal action;
avoidance of substantial financial losses;
maintenance of a positive corporate reputation;
elimination of a risk to the health and safety of the employees
or the community;
2.1.2 Personal costs and other key factors affecting whistleblowing
Some scholars have attempted to provide a framework to analyze the various factors that affect or influence an individual's whistleblowing decision or behavior. Schultz et al. (1993), for example, examined the propensity of corporate managers and professionals to report questionable acts in both the domestic and international settings. Figure 4 shows their whistleblowing model, which proposes that the chances of actual whistleblowing decline as the perceived personal cost of whistleblowing goes higher, and increase with the perceived seriousness of an issue and the attribution of personal responsibility to report a wrongdoing.
The factors affecting whistleblowing intentions enumerated in the study of Schultz et al. are closely related to the significant whistleblowing variables identified in a recent study by Ayers and Kaplan (2005). Using an experimental approach, Ayers and Kaplan identified four considerations that affect whistleblowing behavior. These factors are 1) perceptions about the seriousness of wrongdoing; 2) personal costs; 3) personal responsibility related to a wrongdoing; and 4) moral equity judgments.
Figure 4
A Model of Reporting Questionable Acts
(Adapted from Schultz et al. 1993)
Seriousness of a wrongdoing and whistleblowing. Whistleblowing will likely occur when people are more aware and actually feel that a wrongdoing has become more harmful to the organization. Perceptions on the seriousness of a wrongdoing are subjective, however. They are influenced by several factors.
One of these is the prevailing organizational or societal value. When the dominant organizational or societal value accepts or tolerates wrongdoing, then whistleblowing will not likely occur. In a survey on corporate wrongdoings conducted by the Asian Institute of Management-Ramon V. del Rosario Center for Corporate Responsibility (2004), for example, the findings reveal that majority of the senior executives (57 percent) believe that "keeping quiet" on a wrongdoing is not "always wrong". In one survey of the Social Weather Stations also, bribery is perceived by some businessmen as a standard business practice.
Although a potential whistleblower may perceive that a wrongdoing is serious enough, whistleblowing will not automatically occur especially in the absence of a clear and convincing evidence of the wrongdoing. When the whistleblower holds strong evidence about a corrupt practice, it strengthens his or her belief that the wrongdoing is serious enough and need to be reported.
Perceptions of the seriousness of a wrongdoing may also be influenced by clear policy standards on what constitutes wrongdoing. Laws defining corrupt acts, for example, may provide cues to the potential whistleblower in deciding whether observed wrongdoing is serious or not.
Personal responsibility and whistleblowing. When people are aware and feel that it is their responsibility to report a wrongdoing, they are more likely to blow the whistle. The attribution of personal responsibility to report is an important explanation why people have a higher propensity to report a questionable act compared to others. In a study of internal auditors in the United States and Canada, Miceli, Near and Schwenk (1991) reported that "subjects were less likely to report incidents when they did not feel morally or by role prescriptions to do so". This finding is at odds with the ideal concept of whistleblowing as a voluntary act on the part of the individual. Nonetheless, for the purpose of encouraging whistleblowing as a policy in order to fight corruption, it may be worthwhile to explore the pros and cons of making whistleblowing as a legal obligation of public officials and employees. In addition, it may also be desirable to enhance existing protections given to role-prescribed whistleblowers such as Internal Auditors and Compliance Officers.
Personal costs and whistleblowing. Whistleblowing rarely occurs as the personal costs of reporting rise. When people perceive that the personal costs have become very high, then they will not blow the whistle. This insight does not mean, however, that when personal costs exceed expected benefits, then no whistleblowing will take place. It only means that there are thresholds of tolerable personal costs wherein people are still courageous or willing enough to blow the whistle. Beyond this threshold of tolerance, whistleblowing will be very rare, if it will happen at all.
The fear of retaliation is the major impediment to whistleblowing. This is one of the main reasons why many people prefer to stay silent than blow the whistle against observed wrongdoings. Table 13 shows the most serious forms of retaliation experienced by whistleblowers. Among these are loss of job, reduction of salary or job responsibilities and harassment in the workplace. Ostracism in the workplace is also one of the most burdensome consequences of whistleblowing. Overall, these consequences of whistleblowing deprive the individual of much-needed social support and personal comfort. Expectations of these difficulties will discourage individuals from blowing the whistle.
Table 13
Most serious forms of retaliation experienced by whistleblowers
Form of retaliation | Percentage of survey respondents |
Loss of job | 62 |
Job responsibilities or salary reduced | 11 |
Harassment, transfer | 18 |
Job responsibilities changed | 2 |
Work more closely monitored | 1 |
No retaliation | 5 |
Source: Jos, Philip. H., Mark Tompkins, and Steven Hays.1989.
The absence of effective legal protection for whistleblowers increases the personal costs of and deters whistleblowing. In a survey of New South Wales (Australia) public sector employees, it was reported that 76 percent of the respondents said they would either be unlikely to, or definitely would not, report corruption in the absence of legal protection. About 67 percent of respondents agreed that "legal protection makes it easier for them to consider reporting corruption".
Perceptions of the personal costs and of whistleblowing may differ among cultures. The differences may be explained by the dominant value judgments with regard to existing practices. One culture may accept a certain business practice, for example, but in another context, such practice would be viewed as questionable (Schultz et al. 1993:80). The differences in value judgments with regard to certain practices may also affect employee's assessment on whether to report a wrongdoing.
Organizational culture is another factor affecting people's propensity to blow the whistle against observed and perceived forms of wrongdoing. As "collective programs", organizational culture contains values that direct not only people's awareness and attitudes of "good" and "evil" acts, but also contribute to the "tolerance of principled dissent in the organization".
People will not also be willing to blow the whistle when authorities, whether internal or external to the organization, habitually fail to act on reported wrongdoings. The perception that nothing will be done about a reported wrongdoing may contribute to the potential whistleblower's fear of retaliation from powerful wrongdoers.
2.1.3 Frameworks on whistleblowing effectiveness
Policies designed to encourage whistleblowing must consider the factors that facilitate or constrain it. In addition, they must address the issues that impede the effectiveness of whistleblowing in correcting or terminating reported questionable practices. Understanding the whistleblowing process provides valuable guidance in designing such policy.
The whistleblowing process has been explored in considerable depth by some scholars. Near, Dworkin, and Miceli (1993) employed the concepts of justice and power to make some sense of the whistleblowing process.
Justice framework. This framework explains the reactions of various parties to whistleblowing. It uses the concepts of procedural and distributive justice to understand the reactions of parties to whistleblowing incidents. The concept of "procedural justice" guides stakeholders' perceptions of "satisfaction" or "dissatisfaction" with the system of whistleblowing (Near, Dworkin, and Miceli 1993). "Distributive justice" concerns determine feelings of satisfaction or dissatisfaction with the outcomes of whistleblowing. The justice framework offers the following insights on whistleblowing effectiveness.
Procedural justice
Distributive justice
Power-relations framework. This framework views whistleblowing as an "influence process" that affects the "balance of power within an organization". According to this framework, a whistleblower tries to convince the members of the organization or its dominant coalition to change an existing practice because it constitutes a wrongdoing. The organization can either terminate or continue with the challenged practice, depending on how powerful or influential the whistleblower is in the organization. Lacking power, the whistleblower may be punished for his or her "activism" that may rock the stability and challenges the power structures in the organization. Thus, for Near and Miceli (1995:686), the whistleblower's effectiveness in producing the desired changes depends partly on the power he or she possesses in the organization.
Whistleblowing involves the dynamic interaction of several parties. Near and Miceli (1995) offers the following simple framework to understand this process of interaction.
Figure 5
A model of the whistleblowing process
As Figure 5 shows, whistleblowing effectiveness will be determined by the combined outcomes of the six (6) interactions:
between the whistleblower and the complaint recipient;
between the whistleblower and the organization;
between the whistleblower and the wrongdoer;
between the complaint recipient and the wrongdoer;
between the complaint recipient and the organization;
between the wrongdoer and the organization.
In turn, the outcomes of these interactions will depend on the characteristics of the five (5) primary actors in whistleblowing (Near and Miceli 1995:681).
Characteristics of the whistleblower;
Characteristics of the complaint-recipient;
Characteristics of the wrongdoer;
Characteristics of the wrongdoing;
Characteristics of the organization.
The influence of individual and situational variables on the outcome of whistleblowing is shown in Figures 6 and 7. Essentially, the credibility and power of whistleblowers, complaint recipients, or wrongdoers affect the overall outcome of a whistleblowing incident. The organizational and societal support to whistleblowers or wrongdoer is also crucial in determining the outcomes of whistleblowing. Lastly, the willingness of the organization to change a questionable practice determines whistleblowing effectiveness.
Figure 6
Individual variables that affect the outcome of whistleblowing
(Source: Near and Miceli.1995. Effective Whistleblowing, p. 682)
Figure 7
Situational variables that affect the outcome of whistleblowing
(Source: Near and Miceli. 1995. Effective Whistleblowing, p. 683)
In addition to individual variables, situational variables also influence the outcome of the whistleblowing process. Two variables are crucial: the characteristics of the wrongdoing and the characteristics of the organization. The level of organizational dependence on a wrongdoing, the availability of convincing evidence of wrongdoing, and the legal basis for the whistleblowing may influence its outcomes.
Other important factors affecting whistleblowing effectiveness are 1)organizational perceptions on the "appropriateness of whistleblowing", 2) the existence of a climate favorable to whistleblowing, 3) the existence of less bureaucratic organizational structures, 4) organization's power relative to its external environment, and 5) the whistleblower's choice of whistleblowing channels (internal or external).
2.1.4 Theoretical insights on whistleblowing policy design
The main challenges in whistleblowing policy design are 1) encouraging individuals with information about a wrongdoing to blow the whistle, and 2) making whistleblowing effective as an instrument of change. The literature contains rich insights on these core problems in whistleblowing. Among these are the following:
Achieve overall system satisfaction.
Improve legal standards on protected whistleblowing.
Reduce the costs of whistleblowing.
Create effective societal and organizational structures.
Promote role-prescribed whistleblowing.
Enhance whistleblowing skills.
Achieve system satisfaction. Many policy initiatives to encourage whistleblowing generally fail because they focus only on satisfying the concerns of whistleblowers; the concerns of the other parties such as managers and fellow employees are largely neglected (Near, Dworkin and Miceli 1993:396). Currently, the dominant approach to encourage whistleblowing is to protect whistleblowers and establish procedures that will facilitate whistleblowing. Such interventions are not enough to increase the supply of whistleblowers to counter the massive corruption in some societies and organizations.
The key to encourage whistleblowing, according to Near and Miceli (1995), is to achieve overall system satisfaction, which can create a much safer environment for whistleblowers. To achieve system satisfaction, policies must satisfy the procedural and distributive justice concerns of both the whistleblowers and the other parties to whistleblowing incidents.
Satisfying the concerns of whistleblowers. Policies must ensure that organizations establish and provide fair procedures for whistleblowing by employees. In addition, the policies must address the distributive concerns of whistleblowers, i.e., making sure that reported wrongdoings are acted upon. The policies must ensure that whistleblowers will not suffer from retaliation as a result of reporting wrongdoings that pose serious harm to the public or organizational interests.
For whistleblowers, satisfaction and continuing confidence on the whistleblowing system will come from perception that society and organizations have fair and user-friendly procedures for reporting and responding to reported wrongdoing. The whistleblowing system must ensure that whistleblowers will be amply protected, if not rewarded, when they blow the whistle against serious forms of wrongdoing.
Satisfy the procedural and distributive concerns of the other parties to whistleblowing. The policies must provide certain incentives for whistleblowers to follow the prescribed and legitimate procedures for whistleblowing, probably giving the organization the first opportunity to correct the wrongdoing. Policies to encourage whistleblowing must raise awareness and appreciation of the individual, organizational, and societal benefits of whistleblowing. Addressing the concerns of stakeholders will help produce a favorable response to whistleblowing (ibid., p. 397). Policies must mandate the adoption and implementation of programs to promote the value of whistleblowing to all stakeholders.
Improve legal and organizational standards on protected whistleblowing. Whistleblowing will be more effective when whistleblowers report activities that are clearly illegal compared to those that are merely unethical or immoral (Near and Miceli 1995:698). In one survey, majority of respondents expressed higher preference for whistleblowing against illegal-as compared to merely unethical--activities (Callahan, Sangrey and Collins 1995:942). In the same study, 75 percent of respondents believed that an employee who is terminated for informing the news media of an employer's illegal activity should be protected. In comparison, only 61 percent of respondents asked for whistleblower's protection for those who report unethical practices.
Laws that define the forms of wrongdoing that are illegal also empower complaint-recipients to act on whistleblower's disclosure.
Whistleblowing will be more effective in organizations with ethical climates that discourage wrongdoing, encourage the reporting of wrongdoing, and discourage retaliation against whistleblowers (Near and Miceli 1995:701). The ethical climates in organizations influence perceptions of the appropriateness of whistleblowing (Near and Miceli 1995:700). In general, if the organizational climate discourages wrongdoing, then employees will be more encouraged to report a wrongdoing.
When stakeholders perceive that the whistleblower's action is appropriate, then whistleblowing will be more effective in producing the desired changes. When coworkers, management, and the complaint recipient believe that organizational norms allow or even encourage the reporting of a wrongdoing, then whistleblowing will be more effective. But, if stakeholders perceive that the whistleblower's actions have breached the bounds of appropriateness, whistleblowing will be resisted regardless of its benefits. Policy interventions, therefore, must encourage organizations to adopt organizational cultures and practices that make whistleblowing legitimate, appropriate, and socially rewarding.
Reduce the costs of whistleblowing. Whistleblowing has personal costs that will make whistleblowing a rare behavior among individuals. Mitigating these costs will increase the individual's use of whistleblowing as an instrument for correcting or terminating wrongdoings. A holistic policy on whistleblower's protection is an essential step in reducing the costs of, and encouraging, whistleblowing. Policies must also establish programs to promote the value of whistleblowers for organizations and the society.
Counter the negative perception that whistleblowers are "harmdoers". Some people in powerful positions view a whistleblower as "harmdoer" when he or she reports directly to an external public authority or to the media, about alleged wrongdoing. According to the view, a whistleblower makes the first "public attack" against an organization although he or she may be making a legitimate protest against a questionable organizational practice that poses serious harm to the public or even organizational interest. This negative view serves as justifications for retaliating against whistleblowers. To counter this view, whistleblowing policies must mandate the adoption of programs to promote the value of whistleblowers in uncovering anomalies that would do more serious damage to the public or even organizational interest if left not corrected. They must also provide incentives (e.g. state protection) for whistleblowers to use official channels for airing allegations of wrongdoings.
Prevent retaliation. Policies and programs to encourage whistleblowing must be able to prevent harassment, reprisals and other forms of retaliatory actions, which are major impediments to whistleblowing. Society can reduce the personal costs of whistleblowing by establishing the rights of, and providing legal remedies for retaliatory actions against, whistleblowers.
Cultivate social support. Policies and programs must help cultivate societal and organizational support, which are far more effective strategies in preventing retaliation against whistleblowers. They can enhance such support by increasing awareness of the benefits of whistleblowing and preventing damage to the reputations of individuals and organization from unsubstantiated allegations of wrongdoings.
Increase personal benefits. Organizations and society must increase the personal benefits of whistleblowing. The level of expected benefits must be convincing enough to help the whistleblower decide in favor of whistleblowing despite the presence of risks. Attractive incentives, in whatever form, should be provided to encourage whistleblowing.
Create powerful societal or organizational structures for whistleblowing. The work of Near and Miceli (1998) on effective whistleblowing underscores the value of powerful complaint-recipients in making whistleblowing effective.
Like whistleblowers, complaint-recipients also make some calculations on whether to act on the reported wrongdoings. They must determine 1) whether wrongdoing has really occurred, 2) whether they are responsible for acting, and 3) whether they have the power to change the wrongdoing.
When they are powerful enough, complaint-recipients may use "efficacious actions" to address a reported wrongdoing, but only when they support the whistleblower (Near and Miceli 1995:694). A powerful complaint-recipient, who is supportive of the whistleblower, enhances the whistleblower's credibility (ibid., p. 693), thus increasing overall whistleblowing effectiveness.
Near and Miceli (1995:702) also hypothesize that whistleblowing is more effective in organizations with more formal (written) mechanisms of encouraging whistleblowing.
Allow graduated levels of anonymous or confidential whistleblowing. Anonymity may either enhance or decrease whistleblowing effectiveness (Near and Miceli 1995:692). On the one hand, it can increase whistleblowing effectiveness by reducing the likelihood of retaliation against whistleblowers and by preventing attacks against the motivations of whistleblowers who have questionable characters but, nonetheless, provided valuable information about wrongdoings. On the other hand, anonymity reduces the credibility of the complaint itself; it raises suspicions about the value of the disclosed information and the motive for whistleblowing. Anonymity makes it also difficult for complaint-recipients to seek additional evidence to validate the whistleblower's allegations of wrongdoing, reducing whistleblowing effectiveness in the process.
The proper policy approach towards anonymity and confidentiality may depend on the existing organizational climates. When the organizational climate is unsafe for people who challenge authority structures for perpetuating questionable practices, then anonymous whistleblowing can be a safer alternative to encourage individuals to disclose information about observed wrongdoing. Confidential whistleblowing to authorized complaint-recipients, inside or outside organizations, can also be encouraged especially when organizational norms that discourage wrongdoing already exist.
Whistleblowers who have the courage to reveal themselves to complaint-recipients may increase perceptions about their credibility and facilitate the complaint-recipient's investigation.
Allow several channels for whistleblowing. Internal whistleblowing will be less effective especially when the organization exhibits great dependence on a questionable practice. When the organization is highly dependent on the wrongdoing for its survival, top management may be unable to terminate a protested wrongdoing. In such cases, external whistleblowing will be more effective in correcting or terminating a wrongdoing (Near and Miceli 1995:695-697).
Using a justice framework on whistleblowing, organizations must develop consensus not only on internal whistleblowing procedures, but also on the criteria and procedures that would make it legitimate for employees to use external whistleblowing channels.
Promote role-prescribed whistleblowing. The likelihood of whistleblowing depends on the attribution of personal responsibility to report wrongdoings (Schultz et al. 1993). Thus, to encourage whistleblowing, society and organizations need to mandate it as part of an employee's responsibilities.
Some existing studies also hypothesize that role-prescribed whistleblowers are more effective in correcting or terminating wrongdoings because their whistleblowing is seen as more legitimate (i.e., they are just doing their job). Role-prescribed whistleblowers, such as Internal Auditors, are also less prone to retaliation because they can offer more socially acceptable and legitimate reasons for whistleblowing; they can use "ideological accounts" to convince stakeholders that their whistleblowing only complies with societal dictates to report organizational wrongdoings although organizations themselves may suffer certain consequences (Near, Miceli and Dworkin 1993:405).
Whistleblowing can also be prescribed as a duty of leaders and managers of organizations, to make it more effective. Using a theory of resource dependence, Near and Miceli (195:687) hypothesize that whistleblowers who occupy leadership positions or have expertise are likely to be more effective in stopping questionable practices. This is because of the organization's dependence on their resources (leadership, expertise, etc.) In addition, using the theory of value congruence, Near and Miceli assert that whistleblowers who have the same values as the organization's management will be more influential in stopping organizational wrongdoings. The effectiveness of role-prescribed whistleblowers can also be explained by their legitimate organizational power to reward or coerce (Near and Miceli 1998).
Policy initiatives to prescribe whistleblowing as an employee's duty may have the same effect as legitimizing role-prescribed whistleblowing status (Near and Miceli 1998).
Improve whistleblowing skills. Whistleblowing will be more effective when the evidence of a wrongdoing is convincing. Written documentation and other clear evidence of a wrongdoing will make whistleblowing more effective because they enhance the credibility of the whistleblower and his/her disclosure. Strong evidence will also make it easier for the whistleblower to convince the complaint recipient to act on the reported wrongdoing (Near and Miceli 1995:697. These insights suggest that whistleblowing policies must mandate the adoption and implementation of programs designed to increase the knowledge and skills of whistleblowers in using the official channels and procedures for whistleblowing.
