Unit Three: Case Incident 2: Whistle Blowers: Saints or Sinners
Rachel Hogan
Kaplan University
MT302 Organizational Behavior
May 17th, 2011

Corporate whistle-blowing, reporting company wrong-doings is a controversial subject of debate. There have been several widely known cases in which reputations are damaged, sometimes unsubstantiated or falsely, and where informants have received hefty pay-offs. The adoption of the whistle blower law pays informants thirty percent of legal fines received from lawsuits in whistle blowing cases (Judge & Robbins). I believe corporate whistle-blowing is good for organizations, its members, and the general public. It is important for corporate wrong-doings and do-ers to be brought to the attention of senior management. The sooner the wrong-doings are reported and investigated, the better for everyone involved. Before the issue is handled publicly or in court, the organization should have the opportunity to rectify the wrong-doings, which would save money in legal proceedings, and save the reputation of the company. According to our Organizational Behavior textbook, self-fulfilling prophecy has “evolved to characterize the fact that an individual’s behavior is determined by other people’s expectation” (Robbins & Judge, 2007). With this in mind, I believe self-fulfilling prophecy can drive an individual’s search for incriminating evidence or sometimes hinder it. An employee may have a negative self-fulfilling prophecy if they do not feel valued at their job, even mistreated, or feel that other employees are treated better and favored. This may lead to the employee searching for a way to get back at their manager, or even the company. They may search for evidence even when there are no facts substantiating the employee’s claim. If an employee has a positive self-fulfilling prophecy perhaps because they are treated extremely well or admire their supervisor, they may tend to overlook corporate wrong-doings. This employee may admire their supervisor or manager so much that they’re oblivious to what is taking place. When frivolous lawsuits occur, future whistle-blowers with a valid claim against their company will probably be less likely to come forward and report the problem. It is very likely their claims will be viewed as irrational or unfounded, or they may not want to see it ridiculed publicly. Preventing frivolous lawsuits can be challenging for the government and organizations. One thing companies can do is to establish and enforce a strong ethical policy for their employees to live and maintain inside and outside the workplace. It must apply to every, from top-management to bottom line employees. With the implementation of such an ethical policy, companies should also provide anonymous means for reporting unethical behavior so that the claim may be investigated internally before it is reported publicly. The U.S. Government made great strides in codifying certain rules relating to corporate ethics and behaviors when Congress enacted the Sarbanes-Oxley Act in 2002 (Brigham & Houston, 2007). One provision of this act was the protection of “whistle-blowers” from adverse disciplinary action by supervisors or managers. Under the Sarbanes-Oxley Act, whistle-blowers were granted the right to have disciplinary actions reported to and investigated by the Occupational Safety and Health Administration (OSHA). In the event that the employee reporting corporate wrong-doing is found to be punished for no reason, “the company can be required to reinstate the person, along with back pay and a sizeable penalty award” (Brigham & Houston, 2007). I believe that employees should have an ethical obligation to report wrong-doings to members of the company, unless senior management is aware of the situation already, or even involved. In many cases, senior management may not have any idea that unethical business is being conducted. As seen in the case incident itself, speculation does not always lead to a valid claim. Though since the case was settled, the reputation was already negatively impacted and the employee received a sizeable reward undeservedly. Therefore, reporting the situation to authorities prior to addressing the issue internally can be very costly to the organization and very damaging to the company’s reputation. Once the wrong-doings have been investigated internally, senior management should rectify the situation or report it to the proper authorities if necessary. Advantages of blowing the whistle internally include: less costly to the organization, lower potential for negative news media, spares the company’s reputation, and instills trust in senior management for the appropriate and ethical handling of the situation. The biggest disadvantage to an employee blowing the whistle internally is backlash from fellow coworkers, attempts at retaliation, fear of being the situation being pushed aside, or not being believed. Fortunately, the Sarbanes-Oxley Act has alleviated most of the concern for retaliation or punishment.

References
Brigham, E. F., & Houston, J. F. (2007). Fundamentals of financial management (5th ed). Mason,
OH: Thomson South-Western.
Drafke, M. W. (2006). The human side of organizations (9th ed.). Upper Saddle River, NJ: Pearson Education, Inc.
Robbins, S. P., & Judge, T. A. (2007). Organizational behavior (12th ed.). Upper Saddle River, NJ: Pearson Education, Inc.