WHISTLEBLOWING: AN ORGANIZATIONAL SUPPORT PERSPECTIVE

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1 ISSN: IJMRR/July 2015/ Volume 5/Issue 7/Article No-1/ Muhammad Hariz Hamid et. al., / International Journal of Management Research & Review WHISTLEBLOWING: AN ORGANIZATIONAL SUPPORT PERSPECTIVE ABSTRACT Muhammad Hariz Hamid* 1, Nasruddin Zainudin 1 1 College of Business, Universiti Utara Malaysia, Malaysia. Humans are social creatures. They socialize and cooperate among each other to survive. And, in many occasions, humans expect a return on their action toward others. This perspective explains a process of social exchange of which underpinned the social exchange theory. In fact, it is also suggested to be relevant and could be extended to the employee-organization relationship in an organizational context. Especially when employees expect their working organizations to behave in a humanlike manner, mutual commitment or reciprocity between them is developed. This reciprocal relationship is suggested to influence individual employees tendency to act in the organizations best interest, and thus explains the whistleblowing behavior among employees in the workplace. Keywords: Organizational Support Theory, Perceived Organizational Support, Social Exchange Theory, Whistleblowing. INTRODUCTION In recent days, organizational wrongdoings occur rather more frequently. In many instances, they had severely impacted the victim organizations. Indeed, wrongful activities pose as a serious threat to organizations globally. Popular cases such as Enron and WorldCom can serve as good reminders of the massive repercussions of corporate scandals to organizations and their stakeholders. Regardless, one of the common characteristics shared by both cases is that, the wrongdoing was first blurted out by a whistleblower. Realizing the critical role of employees to deter unethical behaviors in the workplace, many studies were carried out to better understand this matter (Mesmer-Magnus & Visveswaran, 2005). Among the perspectives that garner researchers attention is upward communication in organizations. As identified by the Committee of Sponsoring Organizations of the Treadway Commission (COSO, 1992), information and communication is one of main components of effective control systems. Indeed, whistleblowing has been considered as an appropriate mechanism to detect wrongdoing (Patel, 2003). Nevertheless, will employees blow the whistle upon awareness of wrongdoings in the workplace? If yes, how likely are they in doing so? To gauge the whistleblowing behavior among employees, numerous predictors to whistleblowing decision have been studied (Near & Miceli, 1985). And, as the decision to blow the whistle itself is complex, literature offers insight from various perspectives. However, not only that the findings were mixed, the presentation of literature on whistleblowing was also found to be biased. Specifically, majority of the studies are carried out to investigate the behavior from the fact of the case, that is, the nature and type of *Corresponding Author 479

2 wrongdoing (Miceli, Near, & Schwenk, 1991; Near, Rehg, Van Scotter, & Miceli, 2004), as well as characteristics of the whistleblowers (Mclain & Keenan, 1999), among other perspectives that explain whistleblowing. To have a more comprehensive view of this decision, researchers from diverse background are suggested to integrate and complement relevant perspectives in the existing whistleblowing frameworks. Moreover, prior studies also emphasized that it is critical to understand employees motivation to report from key organizational factors, especially regarding organizational attitude and behavior toward wrongdoing (McLain & Keenan, 1999). Similarly, literature proposes that attention should also be directed to contextual conditions as findings on this perspective were found to be more varied as compared with personal characteristics (Miceli et al., 1991; Near & Miceli, 1996). In light of this issue, Miceli, Near, Rehg, and Van Scotter (2012) assert that employees observation of organizational wrongdoing is associated with low organizational support and low perceived justice of reporting channels. In fact, silence literature offers some useful insights into these propositions. Specifically, Morrison and Milliken (2000) recommend that the phenomenon of silence in organizations influences employees to feel that they are not being valued by their working organizations. They claim that this perception would influence employees behavioral disposition and subsequently lead to low levels of commitment and trust among organizational employees. Although organizational commitment has been shown to have a link to the whistleblowing decision (Miceli et al., 1991; Shore & Wayne, 1993), literature however justified that organizational commitment and organizational support are conceptually different (Eisenberger, Fasolo, & Davis-LaMastro, 1990; Shore & Tetrick, 1991), and that their influence on whistleblowing behavior should be studied independently. From these assertions, we conjecture that the relationship between individual employees and their working organizations gives important cues concerning whistleblowing. Accordingly, validation of the influence of perceived organizational support on whistleblowing behavior is warranted. DEFINING WHISTLEBLOWING Near and Miceli (1985) define whistleblowing as the disclosure by organization members (former or current) of illegal, immoral or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action (p. 4). We view that this definition covers several important aspects. First, the whistleblower could be both present and past employees of the organization. Secondly, the scope of wrongful activities encompasses activities that are illegal, immoral or illegitimate, all of which fall within the victim organization s jurisdiction. And lastly, the reporting is made to parties that could take action on the occurrence of wrongdoing. To set context for research, many studies were found to have adopted this definition. Despite covering the key components of whistleblowing, we argue that it still has a number of limitations. First, this definition does not clarify regarding the reporting role, whether a whistleblower is someone, who, in a reporting position. Besides, it also lacks explanation on the reporting recipient, especially concerning the used of the word persons, whether it only applies to individuals outside the organization or inclusive of those within the same Copyright 2012 Published by IJMRR. All rights reserved 480

3 organization. Seemingly, it leaves us to believe that it meant for both, internal and external recipients. Finally, the definition left no clue whether the scope of wrongful activities should also comprise those that are anticipated and probable to occur. In this regard, we view that Jubb (1999) fills the loopholes found in the prior definition. Specifically, he describes whistleblowing as a non-obligatory act of disclosure, which gets onto public record and is made by a person who has or had privileged access to data or information of an organisation, about non-trivial illegality or other wrongdoing whether actual, suspected or anticipated (p. 83). This extended definition appears to satisfy our queries. Jubb clearly states that whistleblowing is not an act of obligation. In other words, it is a voluntary action of the individuals. Moreover, the definition specifies that whistleblowing covers disclosure of information to public. Lastly, it also caters probable and anticipated wrongdoings. Considering the contextual limitations mentioned earlier, we suggest that McLain and Keenan (1999) provide a clearer definition for whistleblowing. In particular, they describe whistleblowing as present or former organization members going outside prescribed responsibilities and procedures to report wrongdoing in the organization to entities believed willing and able to stop the wrongdoing (p. 266). BLOWING THE WHISTLE IN ORGANIZATIONS The role of whistleblowing is very critical, as it could stop wrongful activities and rectify the problems (Mesmer-Magnus & Viswesvaran, 2005). In fact, whistleblowing could serve as a control mechanism to detect and prevent wrongdoings in the workplace (Patel, 2003). Especially when the wrongful act is serious and could impact the organization significantly, whistleblowing could serve as a protection. Consequently, resources can be saved, performance can be improved, and thus enhance the effectiveness of control system (COSO, 1992). Paradoxically, whistleblowing can be costly to individual reporters (Mesmer-Magnus & Viswesvaran, 2005). Often times, employers or related parties would retaliate on the reporting. It puts many things associated with the whistleblowers at jeopardy, mainly concerning their career prospect (Jubb, 1999; Near & Miceli, 1985). Whistleblowing could also cause stir and disharmony in organizations. At worst, it may diminish the victim organization s public image. In many instances, initial reporting such as tips would trigger further investigation on the reported cases. Considering the future implications of such action, research shows that, employees who contemplate to report wrongdoing chose to be anonymous, especially among employees in smaller organizations (Miceli & Near, 1985). Studies also reveal that employees blew the whistle externally when they have strong evidence for the wrongdoing (Dworkin & Baucus, 1998). Nevertheless, literature suggests that employees should first consider to report the wrongful activities internally prior to bringing the matter to the public as it could be less harmful to the victim organization (Miceli et al., 1991), and intuitively, less risky to the whistleblower (Dworkin & Baucus, 1998). WHISTLEBLOWING PROCESS Researchers argue on the nature of whistleblowing decision, specifically whether it is a process or a straight call made by individual employees (Brennan & Kelly, 2007). Prior to Copyright 2012 Published by IJMRR. All rights reserved 481

4 reporting, literature suggests that potential whistleblowers will make some assessments, which include weighing the decision from a cost and benefit perspective (Miceli & Near, 1985). In this regard, many studies recommend that the decision to blow the whistle involve a series of process that comprises at least four key components: the whistleblower, the act of whistleblowing, the whistleblowing recipient, and the victim organization (Brennan & Kelly, 2007; Jubb, 1999; Near & Miceli, 1985). Generally, the process to blow the whistle starts with the decision made by individual employees, whether a particular practice in the organization is deemed wrongful (Near & Miceli, 1985). Having considered such action as a wrongdoing, the employee then will decide whether or not to make a report. This judgment comprises multiple perspectives. Research asserts that this decision is mostly depending on the seriousness of wrongdoing and the exposure to retaliation (Miceli & Near, 1985). Besides, the individual employee would also consider the reporting effectiveness. In this regard, literature states that individuals will be more likely to report when they believe that the disclosure will be able to stop the wrongdoing, and that they have no other alternatives to do so. Additionally, studies also indicate that the reporting decision is also influenced by conditions and personal characteristics of the potential whistleblowers (Mesmer-Magnus & Viswesvaran, 2005). Subsequently, upon receiving the report, the victim organization will make an appropriate response. Research highlights that this response is vital as it reflects the organization s attitude toward whistleblowing, and hence influences employees assessment on the level of their personal cost to report. For instance, McLain and Keenan (1999) recommend that the quality of information regarding wrongdoing and the anticipated organizational response are important throughout the whistleblowing process. Essentially, response to wrongdoing should be carefully thought out as it could be flawed, despite the attempt to be rational. In fact, this response can vary significantly, depending whether the individual reporter is internal or external to the organizations. This claim is well supported as it was found that external disclosure has been more effective in changing organizational practice than internal reporting (Dworkin & Baucus, 1998). THEORETICAL PERSPECTIVES Due to its complex nature, there is no single theory could adequately describe whistleblowing behavior (Near & Miceli, 1985). Prior studies have adopted models from numerous theories to explain whistleblowing decision, among others, theory of prosocial behavior (Brennan & Kelly, 2007; Brief & Motowidlo, 1986), bystander intervention theory (Latané & Darley, 1968); justice theory (Near, Dworkin, & Miceli, 1993), and expectancy theory (Fudge & Schlacter, 1999). Nevertheless, the relationship between variables, however, is somewhat inconclusive (Mesmer-Magnus & Viswesvaran, 2005). In the following sections, we present a review of social exchange theory to better understand whistleblowing from a social construct perspective. Similarly, in an organizational context, the process of mutual exchange was explained by the theory of organizational support. Finally, the influence of perceived organizational support on whistleblowing decision is evaluated. Copyright 2012 Published by IJMRR. All rights reserved 482

5 SOCIAL EXCHANGE THEORY Humans are social creatures. They socialize and cooperate among each other to survive. And, in many occasions, humans expect a return on their action toward others. Literature describes this situation as a process of social exchange (Gouldner, 1960), which leads toward the establishment of social exchange theory, one of the well-regarded theories in the field of organizational behavior. The theory of social exchange is based upon the quality of mutual exchange among related entities (Cropanzano & Mitchell, 2005; Gouldner, 1960). However, as Cropanzano and Mitchell (2005) put it, this theory is conceptually debatable, and thus more research is needed to shed light especially on the following issues: conceptual roots, norms and rules of exchange, nature of the exchanged resources, and the relationship of social exchange. One of the key hypotheses assumed by this theory is that the social exchange process may have an influence on the feeling of obligation between the parties involved (Shore & Wayne, 1993). From this perspective, we are intrigued to further understand whether the norms and rules of exchange from the social setting could also be assimilated in an organizational context. Therefore, a more important concern is that, could we establish the influence of social exchange theory from an employee-organization perspective on a whistleblowing decision? This question takes us to a more in-depth discussion on the theoretical background underlying this study. ORGANIZATIONAL SUPPORT THEORY Despite the fact that it regards social interaction among human beings; the fundamental philosophy of the social exchange theory can also be translated into an organizational context, of which derives organizational support theory (Wayne, Shore, & Liden, 1997). Primarily, the theory of organizational support examines the organizations readiness to reward employees increased efforts and socio-emotional needs (Eisenberger, Huntington, Hutchison, & Sowa, 1986). This perspective is crucial in understanding the employeeorganization relationship, within and beyond the scope of employment contract. Fundamentally, it describes the exchange between effort and loyalty for benefits and reward (Brief & Motowidlo, 1986; Levinson, 1965). Literature suggests that employees tend to associate their employer, that is, a partner of social exchange, with individual characters (Eisenberger et al., 1986; Levinson, 1965). This personification is essential to validate interpersonal commitment between the two parties. The process may cover a range of responsibilities such as financial, legal, and moral of the organizations agents that usually reflected on the policies, norms, and culture in organizations (Levinson, 1965). In fact, actions of the organization s agents, not only reflect, but also generally considered as organizational intent, instead of the agents personal motive. This perspective is critical as it is suggested that strong reciprocity will only occur when employees perceive that those treatments are made voluntarily (Eisenberger et al., 1986; Levinson, 1965). PERCEIVED ORGANIZATIONAL SUPPORT In light of the concept of reciprocity, researchers in organizational studies establish a term called perceived organizational support, which covers a two-phased process. First, individual Copyright 2012 Published by IJMRR. All rights reserved 483

6 employees make assessment of the organizations treatment onto them. Subsequently, they reciprocate the treatment that they received (Aselage & Eisenberger, 2003; Levinson, 1965). Specifically, perceived organizational denotes that organizational employees make assessment and form a general belief of the extent to which the working organization values their contributions and cares about their well-being (Eisenberger et al., 1986, p. 500). Studies also indicate that, in lieu of the degree of the reciprocal relationship, this perception reinforces employees effort to accomplish organizational goals (Aselage & Eisenberger, 2003; Eisenberger et al., 1986). One of the earliest studies on perceived organizational support was regarding absenteeism (Eisenberger et al., 1986, 1990). It was found that respondents with higher perceived organizational support tend to be less likely to be absent at work. Previous research also indicate that perceived organizational support relates to job satisfaction, especially as it fulfills the socio-emotional needs of organizational employees (Eisenberger, Cummings, Armeli, & Lynch, 1997; Miao, 2011; Shore & Tetrick, 1991). Moreover, it was also suggested to have a significant relationship with organizational justice, support from supervisor, positive job conditions, and favorable organizational rewards (Rhoades & Eisenberger, 2002). All these perspectives show that employees demonstrate strong commitment toward their working organizations when they believed that they have a reciprocal relationship that goes beyond formal responsibilities toward each other (Settoon, Bennette, & Liden, 1996). Studies assert that this relationship reflects the organizational citizenship behavior (Miao, 2011; Moorman, Blakely, & Niehoff, 1998). CONCLUSION Employees whistleblowing behavior in organizations is significant primarily to enhance effectiveness and efficiency of internal control system (Patel, 2003). While discussions on this decision were found to be varied across contexts, literature does not discriminate the role of the many perspectives leading toward the action. Admittedly, however, that the focus can be biased, and thus efforts to balance these viewpoints are needed. By addressing whistleblowing decision from a theoretical standpoint, we suggest that the social exchange theory provides a useful insight into this objective. In an organizational context, we found that organizational support theory could also contribute to a similar purpose. Fundamentally, the theory of organizational support suggests that the employee-organization relationship is reciprocal (Levinson, 1965). In particular, it posits that employees form an assessment of the organizations appreciation toward their contribution and care for their social well-being. Subsequently, they reciprocate the treatment that they received. This judgment is known as perceived organizational support (Eisenberger et al., 1986). Literature advocates that the effect of this reciprocal relationship rises up commitment ties between the two parties (Eisenberger et al., 1990). Hence, employees tend to show strong commitment toward the organization when their perceived organizational support is high. This commitment is demonstrated through actions that are performed in the organization s best interest. Employees whistleblowing is claimed to meet this condition as the decision is meant to benefit the organization. Copyright 2012 Published by IJMRR. All rights reserved 484

7 In conclusion, we recommend that the influence of organizational support is prominent on employees behavior in the workplace. Hence, it may be justified to infer that perceived organizational support could affect the employees whistleblowing decision. And, despite its critical importance, scope of discussion of this paper is only limited to one of the many theoretical standpoints. Future research could extend whistleblowing literature by evaluating other theories that may be relevant to an organizational context. Especially due to the complex nature of whistleblowing behavior, future research should integrate these theories in constructing comprehensive and rigorous reporting framework. REFERENCES Aselage J, Eisenberger R. Perceived organizational support and psychological contracts: A theoretical integration. Journal of Organizational Behavior 2003; 24: Brennan N, Kelly J. A study of whistleblowing among trainee auditors. The British Accounting Review 2007; 39(1): Brief AP, Motowidlo SJ. Prosocial organizational behaviors. The Academy of Management Review 1986; 11(4): Committee of Sponsoring Organizations of the Treadway Commission. Internal Control Integrated Framework. Harborside, NJ: AICPA, Cropanzano R, Mitchell MS. Social exchange theory: An interdisciplinary review. Journal of Management 2005; 31(6): Dworkin TM, Baucus MS. Internal vs. external whistleblowers: A comparison of whistleblowing processes. Journal of Business Ethics 1998; 17(12): Eisenberger R, Cummings J, Armeli S, Lynch P. Perceived organizational support, discretionary treatment, and job satisfaction. Journal of Applied Psychology 1997; 82(5): Eisenberger R, Fasolo P, LaMastro VD. Perceived organizational support and employee diligence, commitment, and innovation. Journal of Applied Psychology 1990; 75(1): Eisenberger R, Huntington R, Hutchison S, Sowa D. Perceived organizational support. Journal of Applied Psychology 1986; 71(3): Fudge RS, Schlacter JL. Motivating employees to act ethically: An expectancy theory approach. Journal of Business Ethics 1999; 18(3): Gouldner AW. The norm of reciprocity: A preliminary statement. American Sociological Review 1960; 25(2): Jubb PB. Whistleblowing: A restrictive definition and interpretation. Journal of Business Ethics 1999; 21(1): Latane B, Darley JM. Group inhibition of bystander intervention. Journal of Personality and Social Psychology 1968; 10(3): Copyright 2012 Published by IJMRR. All rights reserved 485

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