A response to 'Is Whistleblowing an Ethical Practice?' by Ranjana Lal, a student at the Open Polytechnic of New Zealand

From time to time I receive a blog response that is more in the way of an essay commenting on one of my blogs. Typically, these essays are part of a university assignment to comment on a blog of interest. What follows is the essay by Ranjana Lal, a student at the Open Polytechnic of New Zealand. I have included my response to Ranjana below. Ranjana first wrote to me and said: “I’m currently doing a Business Ethics paper from the Open Polytechnic of New Zealand this semester and one of our assignment requirements is to comment on a Blog on one of the related topics in Business Ethics.   Below is my comment on ‘Is Whistle-blowing an ethical action’.”

You ask ‘is whistle-blowing an ethical action’?

Whistle-blowing always involves an actual or at least declared intention to prevent something bad that would otherwise occur. It always involves information that would not ordinarily be revealed.

Looking at the conclusions and certain criteria given by many ethicists, whistle-blowing is an ethical action. According to the standard theory – Michael Davis ‘Some Paradoxes of Whistle-blowing’ (Davis 1996) points that whistle-blowing is morally required when it is required at all; people have a moral obligation to prevent serious harm to others if they can do so with little costs to themselves. The action is morally justified when it meets the requiring five criteria. In his complicity theory, Davis states that because the whistle-bower is complicit in wrong doing rather than from the ability to prevent harm. There is a moral obligation to help right the situation.

I would also like to draw attention to the Utilitarian theory; the main question with Utilitarian is to which option for action will help produce the greatest amount of happiness and least harm? To support my answer from a general perspective in a case of fraudulent reporting behaviour, the option for a Utilitarian would be, to say nothing in the first place, secondly report the matter to the immediate manager and lastly blow the whistle externally – report outside the organisation.

Looking at these option and analysing the possible outcomes, saying nothing would likely result in the continuing fraudulent behaviour and if the fraud is discovered by any other means, this could cause a damaging effect for the ‘whistle-blower’. Also every employee has an obligation to report any such behaviour to their employer.

The second option – reporting the matter to the immediate manager could result in stopping the fraud, praise for both the ‘whistle-blower’ and the manager. The likely harm would be the loss of the employee who committed the fraud and possibly the ’whistle-blower’ not being trusted by fellow co-workers in the future. Lastly external ‘whistle-blowing’ reporting the fraud outside of the organisation would only result in publicity for the organisation, financial loss for the stakeholders. The only likely positive result from this action would be the ending of the fraudulent behaviour.

The Utilitarian would be morally obliged to the take the second option- report the matter to the immediate manager, as this would likely bring about the most happiness and least harm. Hence in a ‘general’ context and testing the Utilitarian theory, the second option reporting to the immediate manager is the morally correct action to take.

Further in the article you mention a person’s conscience of basic core values such as honesty, trustworthiness and integrity and so did the whistle-blower live up to the ethical standards whilst reporting.  (Duska, 1983) in his article ‘Whistle-blowing and Employee Loyalty’ argues that there is no obligation to loyalty because companies or businesses are not kind of things which are proper objects of loyalty.

It is not possible to be loyal to business as they produce a good or service which makes profit. He points out that people bound together in a business are not bound together for mutual fulfilment and support, but to divide labour so the business makes a profit. Loyalty lies in the existence of a relationship in which there is emotion, trust and confidence. Hence if there is no loyalty to a business or company because there is not emotional attachment how can one be disloyal?

I see an employment relationship as being based on the employment agreement signed by both parties unless loyalty is specified as a clause. There is no obligation from either side for it to be more than what the agreement is, so if whistle-blowing is an immoral action it means you are not fulfilling the terms of the contracted agreement you have with your employer.  For example, if you are disregarding you duties in order to seek out company wrong doing.  The deontologist might say that the rule ‘You should neglect your duties’ cannot be made universal so therefore the action cannot be morally right. A consequentialist still might argue that the harm caused to the company by the employee’s neglect is not as significant as the harm caused by the company’s wrongdoing to the community so therefore the action of whistle-blowing is an ethical action after attempting to right the wrong through internal means.

The significant point is whether the action of whistle-blowing reveals a company’s unlawful practice. If a company has not committed any offence and there is no benefit to either the whistle-blower or the community and the action has potential harm. If this is the case than Davis’ ‘standard’ theory (S4-S5) rule would apply, which is the “whistle-blower has evidence that would convince a reasonable, unbiased observer that his or her views of the threat is correct and has good reasons to believe that revealing the threat will most likely prevent the harm at reasonable cost” (P7).

So, when you ask ‘is whistle-blowing an ethical action’? In conclusion I do believe that whistle-blowing is an ethical action if done in the correct manner and also done for correct reasons because morally it is the correct thing to do, to prevent something bad that would have otherwise occurred.  As for incentivizing whistle-blowing, I believe it should be encouraged as long as the whistle-blower is acting with integrity and the intention is to prevent harm.

Article written by Ranjana Lal, Open Polytechnic of New Zealand

Comments written by Steven Mintz, Ethics Sage, on May 20, 2013