Whistle Blowing By Proposing National Culture Commerce Essay

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This study is an attempt to examine "whistle blowing" by proposing national culture as a mediator between the perceived illegal practices in an organizational practices and the act of whistle blowing. In the first part, it briefly focuses on the concept of whistle blowing,, personality and situational determinants of whistle blowing and potential consequences of whistle blowing from the victim's and whistle blowers perspective in organizational setting and society in general. It further analyzes the whistle blowing practice with special reference to United Kingdom and Pakistan. In doing so it analyzes cultural differences existing between the two countries using cultural dimensions as outlined by Hofstede's and relevant law(s) and its implications for whistle blowing. This study attempts to test the hypothesis that national culture is a major determinant in shaping the act of whistle blowing

Ethics can be defined as the cognitions and values held collectively by the members of a particular society which establishes the criteria for judging the behaviors as right or wrong (Donaldson & Dunfee, 1999). Whistle blowing "operates" under the general "umbrella" of ethics management. (MacNab et al, 2007). It is pertinent to mention here that in the existing literature on ethics the terms whistle blowing, internal whistle blowing, external whistle blowing and internal reporting have been used interchangeably. "Some research doesn't not clearly delineate between internal reporting and whistle blowing while others make a clear cut distinction (MacNab et al, 2007). It is important to understand that the internal reporting is essentially seen as "potential protective mechanism against whistle blowing" (MacNab et al, 2007). It encourages the current employees to bring to surface the objectionable activities of any organization "internally" preferably to the top management which are then rectified thus preventing the leakage of information to the external agencies and saving the organization from legal costs, loss of business opportunities and reputation. (MacNab et al, 2007).

On the other hand whistle blowing essentially refers to the voluntary act of divulging information regarding unethical activities concerning the current or former organization to the external empowered agency with an intention for corrective action (Jubb, 1999; Near & Miceli, 1992; Tavakoli et al, 2003). A number of definitions and explanations of the term "whistle blowing" can be found in the existing literature.

It is defined as " the disclosure by organizational members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to person, persons or organizations that may be able to effect action" ( Near & Miceli , 1985:4). Whistle blowing may include reporting the violation of law, reporting of wrongdoing to an external agency or media or testifying in legal proceedings against organizations

Whistle-blowing does not include employers' / organizations' retaliation for objections about personal dislikes or issues that affect only one person (though laws governing equal employment opportunities and prohibiting discrimination do address personal discrimination). Whistle-blower complaints usually focus on "conduct prohibited by a specific law that may cause damage to public safety, waste tax dollars, or violate public trust in an honest, accountable government" or "any disclosure of information by the employee or applicant that he or she reasonably believes evidences a violation of a law, rule or regulation; gross mismanagement; gross waste of funds; an abuse of authority; or a substantial and specific danger to public health or safety" (U.S. Federal Law, Whistleblower Protection Act of 1989- www.sec.gov.com)

To further our understanding of whistle blowing, we can draw upon three main elements of whistle blowing (in public) explained by Sessela Bok which are dissent, breach of loyalty and accusation. Dissent refers to disagreement with the authority publically. The more repressive the authority which is challenged the more severe will be the repercussions. Breach of loyalty is when one blows the whistle of your own team. Here there is conflict between team loyalty and public loyalty (in broader view team may be viewed as organization). The consequences of breach of loyalty could be severe in terms of loss of team membership or loss of job. This element is present only when the internal channels for whistle blowing have been exhausted like reporting to supervisor (in case of team) and top management (in case of organization). Last is the most serious element of whistle blowing which may take the form of accusations directed at particular party (team, team member or organization). The accusations are generally made publically and put the credibility of accuser and accused in question (Murphy 1981:1692). In the view of this the whistle blowers ought to be aware of their moral responsibility and must weigh the consequences of decisions in taking a decision whether to blow the whistle or not.

Whistle blowing is important with respect to organizations' daily activities. Each day, every single organization runs into the risk of engaging into some wrongdoing, intentionally or unintentionally, in the conduct of business which can have serious repercussions for the organization is particular and society at large. Whistle blowing can have positive or negative consequences for the organization and the employee. On one hand it may pose a threat to the organizations in terms of loss of reputation, legal suits and in worse cases closure of business but on the other hand can be beneficial for the organizations in terms of indicating the areas for improvement. It helps organizations to improve "long term effectiveness" (Miceli, M.P., Near, J.P, Schwenk, C.R. 1991: 113) as the solutions suggested by whistle blowers may be useful. Moreover not only organizations but the society, in general, can benefit from the activities like "fraud, unfair discrimination or safety violations" (Miceli, M.P., Near, J.P, Schwenk, C.R. 1991: 113). But quite often the whistle blowers are negatively evaluated and people have negative opinions about them. They are labeled as "stool pigeon, squealer, informer and fink" (Murphy 1981:1691). Even whistle blowers act in good faith their loyalty is questioned and commented which should not be the case as whoever blows the whistle are loyal to a better noble cause of helping to rectify the "wrongdoings" for the betterment of organization and society in general. (Johnson, 2003).

Despite of the widespread understanding of the concept of whistle blowing, it's positive and negative consequences, there still remains a question as to why whistle is blown in some society and not in others. In other words what are the possible reasons that whistle blowing is encouraged and discourages in various settings/societies.

Several individual, situational and organizational factors have been linked to the incident of whistle blowing. Some theories that link the individual differences to the whistle blowing are the theories of moral development drawing on Kohlberg's work, theories of motivation, theories on organizational commitment and loyalty. Several personality characteristics are discussed in these theories with special reference to whistle blowing. Such personality characteristics include low tolerance for ambiguity, high moral judgment and high self esteem. Demographic have also been discussed to play a role in whistle blowing. Young, highly educated and men are more likely to blow the whistle. However, there isn't enough empirical evidence to support these theoretical findings (Near & Miceli, 1992)

Theories of justice primarily explain the situational causes of whistle blowing. Focus is also placed on the content of action, credibility of the wrongdoer and availability of internal and external channels of reporting. Similarly the culture of the organizations, size, hierarchical setting, power relationships, code of ethics, industry practices etc are some of the major organizational factors that are considered as prime determinants the whistle blowing. (Near & Miceli, 1992)

Till date, the list of personality and situational factors affecting whistle blowing remains non-exhaustive so it is hard to identify potential individual, situational and organizational antecedents of whistle blowing. Moreover these linkages lack the strong empirical evidence to support it. Moreover the major shortcoming in the existing literature is the tendency to view blowing "from a culturally bound perspective without looking at the cultural and international differences (Tavakoli, Keenan & Karanovic, 2003: 50)

This channelizes the current study towards examining the potential explanation for whistle blowing activities by looking at broader context the differences in national culture.

Whistle blowing in the cross cultural context:

In today's world, since the media has become powerful, fast and effective specially in the advanced countries like U.K., U.SA. etc, whistle blowing is a common practice in such countries Almost everyday the media is full of disclosures by the organizational members of illegal or immoral acts to the parties who can rectify it (Near, Miceli & Schwenk, 1991). Despite of this fact, there is still lot of controversy surrounding the act of whistle blowing. It may have become a common practice in the organizations of the western world but in third world countries it still remains a myth where such concept doesn't even exist in any organizational setting and even it does exist, it is never practiced and remains confined to the books of law and human resource manuals.

The world is changing. Historically organizations confined their businesses within a certain geographical boundary. Now, the companies are expanding their businesses; geographical limits do not prove to be a barrier to expansion anymore and multinational companies are emerging. With the emergence of these changes greater stress has been placed on the cross cultural management issues. Plenty of literature on cross cultural elements addresses the fact the national culture has a profound impact on the design of organizations and management of employees. This cross cultural literature also focuses various management issues and concerns that may arise in cross cultural interaction and outlines its implications for the multinational organizations.

The managers of multinational corporations have to deal with "plethora of problems" which is further complicated with the fact that they are operating on global level meaning thereby with various cultural backgrounds. (Tavakoli, Keenan & Karanovic, 2003). The lack of cultural intelligence poses a threat to the survival of such organizations. Where there is a lot of concern on the differences in the management practices, the issue of being ethical has also raised various questions and concerns.

Ethical decision making poses to be a huge dilemma for the global managers because of the marked cultural differences existing among countries/ societies. Countries differ in their perception to what is termed as "ethical" and "unethical" and the ways to handle such behaviors. One key area of this ethical decision making which has raised recent concerns is "whistle blowing". (Sims & Keenan,1999). It is reasonable to assume that managing the act of whistle blowing is more difficult because "the actions, motivations and reactions of all parties are not predictable and may even appear to be illogical". For the organizations to be effective globally, it is important to understand this key aspect in the light of cultural variations from the theoretical as well as practical point of view (Tavakoli, Keenan & Karanovic, 2003).

National and Organizational culture- the linkage

Several empirical evidences posit that the organizational culture is largely determined by the national culture. National culture has been tested to affect the organizational culture which in turn determines the behaviors of individuals across various social and work place settings.

In any organization and society where culture is not very conducive to whistle blowing people may "withdraw psychology from the work" and their productivity may suffer. Here it may be linked to cognitive dissonance theory and employee alienation which occurs when there is a disparity between what employees experience or want and what they want to experience or get. From the organizations' perspective the failure to highlight the organizations'' wrongdoing may escalate the violation, proving to be more costly to the organization in terms of its survival. However on the brighter side if the whistle is not blown the employees shows acceptance of authority and conflict can be kept to the minimum level. In this way organizations may save time which otherwise would have been wasted in investigating various complaints. Even at the societal level such "frivolous" whistle blowing can be avoided thus avoiding the cost of legal actions associated with it helping maintain more stable lifestyle. (Near & Miceli, 1992)

In cultures where whistle blowing is encouraged the whistle blowers may pose threat to formal authority structure and chain of command. It may drastically reduce organizations' profitability as sometimes during the conduct of business organizations are compelled to violate the law o ensure maximum profits. It also creates an environment of uncertainty where members of the organizations feel threatened that given the privilege to blow the whistle, their professional activities may be interfered by the unjustified complaints. Such an environment mars creativity and risk taking behavior required for organizations' progression. On the other hand whistle blowing is very effective in bringing forward attention to such actions or "wrong doings "that have the potential to harm the organizations' members or society. It fosters ethical culture and helps reduce mismanagement which in turn alleviates employee morale and organizational effectiveness (Near & Miceli, 1992)

Thus if the employees perceive that they will be "victimized" if they blow the whistle they are unlikely to engage in whistle blowing than to when they perceive safe and supportive organizational culture where such activities are encouraged and rewarded. (Calland & Dehn, 2004). This is undisputable that the employees who work for that particular organization engaging in "wrongdoing' are in the best position to uncover such acts so the risk can be "reduced or removed" but, most of the time, at the cost of their own job. "In workplaces around the world, law, culture and practice give a strong message that employees should turn a blind eye to wrong doing" or should they raise their concerns. (Calland & Dehn, 2004: 3).

The current study

The aforementioned theories/discussion leads us to further explore an important aspect of whistle blowing keeping in view the discussion of cultural and legal factors which determines or deters the "act of whistle blowing". In global setting, the managers are confronted by difficulties while addressing ethical issues in various cultural contexts (Sims & Keenan, 1999). Very limited literature exists on exploring the impact of national culture on whistle blowing. The aim of this study is to further examine the aforesaid important aspect of whistle blowing by placing two countries in contrast with different level of advancement/ cultural dimensions with a view to add to the theoretical body of knowledge.

In an order to determine the impact of national culture in the relationship of perceived illegal activities of organizations and employee reaction to it (either to blow the whistle or not), it is useful to highlight first the cultural differences existing between the two countries under study- United Kingdom and Pakistan. In doing so, I will discuss the cultural dimensions as outlined by Hofstede, each country's score on the relevant dimension and its implications for whistle blowing.

Hofstede's Cultural Dimensions

In 1960's Geert Hofstede conducted a classic study based on employee opinion survey involving 116,000 IBM employees in forty different countries. This study was based to explore the people's preferences in terms of management style and work practices. From the result of the study, Hofstede identifies four cultural dimensions on which the countries varied. These dimensions are power distance, uncertainty avoidance, individualism/ collectivism, and masculinity/ femininity. The implications of these cultural dimensions are quite clear in terms of explaining differences between countries.

Power distance is "the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally" (Hofstede, 1991: 21). It ranges from a zero, for a culture with small power distance to about 100 for a culture with large power distance. It refers degree to which employees feel comfortable in approaching their supervisor. (Tavakoli, Keenan & Karanovic, 2003). The organizations in countries high on power distance tend to be more hierarchical having centralized control and decision making. Status and power tend to be highly pronounced and leaders tend to exercise authoritative control. "Supervisors are entitled to privileges" (Hofstede, 1997: p35), employees are accustomed to take instructions from their supervisors and expected to comply. In contrast organizations in countries low on power distance tend to be less hierarchical, more decentralized and the power is shared. The line of authority between the supervisor is often blurred and temporary (Hofstede, 2001). This doesn't mean the authority doesn't exist rather the boundary is more permeable and employee participation is expected and encouraged.

Uncertainty avoidance refers to preference for stability and discomfort with uncertainty. In other words it is the degree to which employees feel threatened by the novel situations. "Uncertainty avoiding cultures shun ambiguous situations. People in such organizations look for a structure in their organizations… which makes events clearly interpretable and predictable" (Hofstede, 1991: 116). It ranges from zero, indicating culture of high uncertainty avoidance to 100 showing culture of low uncertainty avoidance(Tavakoli, Keenan & Karanovic, 2003). The cultures marked with high uncertainty avoidance tend to have more formalized rules and regulations which are written down. Managers prefer stability and risky taking is avoided. Whereas in low uncertainty avoidance risk taking behavior is encouraged and rewarded and there is less dependence on formal rules and procedures (Hofstede, 1993, 2001). "People in such societies [weak uncertainty avoidance] pride themselves that many problems could be solved without formal rules". (Hofstede,1997: 121).

Individualism/ collectivism indicate the degree to which people prefer pursuit of personal goals over group targets and remain emotionally detached from all the social associations. Individualism refers to the extent to which "the ties between individuals are loose" (Hofstede, 1991: 51). This dimension ranges from almost zero to approximatly 100 indicating collectivist and individualistic culture. In countries with high individualistic orientation, individual achievement is preferred over collective goals. People prefer to take care of their immediate families and social institutions reward personal success and achievements. "Work (is) organized in such a way that individuals' self interest and employers' interest coincide." (Hofstede, 1991: 51). On the other hand countries with high collectivist control prefer group goals even if they are in conflict with the personal goals. Membership of various groups is highly valued and social institutions reward collective achievements (Hofstede, 1993)

Masculinity/ femininity refers to the extent to which the society carries the bias towards values of assertiveness and competitiveness which are essentially masculine in contrast with the feminine values of nurturing and relationships (Hofstede 1980, 1991). This dimension ranges from zero to 100 indicating feminist and masculine culture respectively. In masculine cultures more emphasize is placed on assertiveness, competitiveness, success and competition than feminine values of warm personal relationships, social responsibility and care. In highly masculine culture the role of males and females are clearly defined with men to show more aggressive, competitive behavior and women to show more caring and submissive behavior. However, in highly feminist cultures this distinction seems to be blurred (Hofstede, 1993). Negotiations and compromise are the preferable ways of resolving conflict in the feminine culture while in he masculine cultures conflicts are resolved by completion and confrontation. (Tavakoli, Keenan & Karanovic,2003)

Understanding Hofstede's cultural dimensions will greatly assist in predicting "whistle blowing probability or acceptance, based on cultural factors" (Tavakoli, Keenan & Karanovic,2003: 50). International human resource management and cross cultural research is mainly focusing on developing cultural awareness to form "partnerships" with the diverse workforce existing in the multinational organizations. There is growing concern to understand "whistle blowing" and its implications for such multinational organizations in the light of national culture. Even in the absence of formal laws governing whistle blowing in any specific country, lots of organizations have developed "special departments for receiving whistle blowing reports". Others direct their employees to report to organizations' legal counsel if they notice or want to report about an illegal activity. On the other hand, organizations, which are unable to develop these mechanisms, have strengthened their internal reporting channels to avoid instances of whistle blowing altogether. Thus essentially the way organizations handle the ethical issues are to great extent dependent on the cultural context they are operating in (Tavakoli, Keenan & Karanovic,2003)

United Kingdom and Pakistan on Hofstede's cultural dimensions

"Pakistan's power structure has remained characterized by strong military/ bureaucratic/family politics dominance which explains a lot about its culture" (Ramakant et al, 2001: 37). Few literate and privileged families/ individuals play an unquestionable role in the social and national life which essentially constitutes an "elite"class". Membership in the powerful elite class is on the basis of family background rather than an individual, as the achievement of power is ordinarily possible only thorough family positions" (Wilber, 1964: 121). In other words the basis of social status are derived from power and wealth which in turn is determined by ancestry.

Considerable importance is being placed on the family background and wealth." It [family] is fundamental social and economic unit" (Wilber, 1964: 5). The head of the family, father or husband, is responsible for earning the livelihood and deal with the worldly affairs and women are expected to remain indoors. The children are trained to give respect and be obedient which makes them more acceptable to authority to an extent of suppressing "individual initiative and belief in the effectiveness of collective effort" (Wilber, 1964: 5). The children and young adults are expected to submit completely to authority figure with no questions asked. Not exercising authority by the person who has the power is considered as a sign of weakness (Wilber, 1964).

Initiative and innovation is greatly discouraged as it is thought to be equivalent to offending superiors and risking survival. "Caution and conformity are the rule" (Wilber, 1964: 5). Uncertainty is avoided at all costs. There is clear cut distinction between the roles of men and women where men are considered superior to women. Men are expected to be "protectors, decision makers and fighters" and women are expected to be "dependent, cherishing and non-aggressive". It is thought to be "reprehensible" if the boundaries dividing the traditional roles of men and women are crossed (Wilber, 1964: 155).

The culture of United Kingdom can be traced from its history; British being the earliest movers of industrial revolution making them form their own "personal capitalism" wherein the enterprises are allowed to operate with complete autonomy (Chandler 1990). They tend to be more oriented towards adopting "laissez- faire" policy of leadership (Lane 1992). The preference of British for autonomy and decentralization is also visible in their governance of colonies (Lubatkin et al, 1998). They value freedom (Guillaume, 1994), thus allowing individuals to choose or shun the choices of majority and base the rewards on individual achievements rather than collective achievements (Lubatkin et al, 1998). Given the capitalistic system, the values of self interest are considered to be "invented" by British. (Hofstede, 1980). Thus there is greater emphasize on safeguard of personal interests, risk taking behavior and freedom to follow one's own mind as opposed to submission to authority. The family background and their power influence values are less pronounced and the discrimination in males and females are seldom observed.

It is quite clear that there is a marked difference between the cultures of United Kingdom and Pakistan. These dimensions of national culture are clearly seen as influencing their organizational culture. In Pakistan, the organizations tend to be more hierarchical and bureaucratic. The authority is concentrated in the hands of few who make unilateral decisions which are expected to be followed unquestionably by the subordinates. Employee participation, risk taking behavior is discouraged at all levels of hierarchy and group effort is encouraged and rewarded. On the other hand the organizations in the United Kingdom are less hierarchical with authority vested in employees at all levels. The leader is considered to be as a team member and boundaries between leader and a subordinate is often blurred. The individual accomplishments are encouraged and rewarded and employee participation and creativity is encouraged.

According to the Hofstede's evaluation/ findings, Pakistan has high degree of power distance with a score of 55, high degree of uncertainty avoidance with a score of 79, low degree of individualism with score of 14 and high degree of masculinity with score of 50 as compared to United kingdom scores of 35 on power distance, 35 on uncertainty avoidance, 89 on individualism and 66 on masculinity (www.geert-hofstede.com).

Keeping in view the scores of both countries on the four cultural dimensions- power distance, uncertainty avoidance, masculinity and individualism/ collectivism-I shall include individualism/ collectivism, uncertainty avoidance and power distance as possible explanations for whistle blowing in both countries on the basis of marked variation among scores as compared to moderate variance for the score on masculinity.

Hypothesis development:

NOTE: In blue it is correction.In purpul it may be deleted.The wording of topic should be striking and the words like "myth or reality "in different culture may be included.