To whistle or not to whistle? Determinants and consequences

Abstract

PurposeMany corporate scandals that occurred recently have indicated the importance of a whistle-blowing mechanism in preventing fraud and malpractices from damaging the organizations. By selecting one organization that has experienced a corporate scandal, this study aims to examine factors that influence employee’s intention to blow the whistle to prevent malpractices in the company. In addition, this study also examines the perceptions of employees regarding the business culture in their organization and how this culture impacts their intention to whistle-blow.Design/methodology/approachThis study engages in a mixed method of data collection, namely, survey questionnaire and interviews to gather the data.FindingsIt is found that retaliation is the most important factor that influences the employee’s intention to whistle-blow, followed by the burden to prove the malpractices, cost implications as a result of the wrongdoing and the action taken by the authority as a result of the fraud reporting. In terms of business culture, a large number of employees are reluctant to become a whistle-blower, although a secured and safe whistle-blowing mechanism is in place, indicating that Asian customs of collectivism and assertiveness play a major part in shaping the whistle-blowing mechanism in Malaysian organizations.Research limitations/implicationsThe results provide further confirmation of the determinants that influence employees to report wrongdoings in the organizations. This study however may subject to self-reported data biasness because of sensitivity of the research that related to fraud and immoral behaviours that occur in the company. Owing to this sensitivity, the study only focuses on employees’ internal whistle-blowing intentions rather than their actual intentions.Practical implicationsThis study helps the management to understand the working culture in the company so that they can identify the weak area of governance which needs improvement such as whistle-blower protection.Originality/valueThis study is original, as it focuses on the employees in a big organization such as government link companies that have experienced corporate scandals albeit having whistle-blowing mechanism in place. In addition, the finding of this study contributes to the theory and body of the literature on the whistle-blowing determinants, currently scarce in the context of a developing country like Malaysia.