Is Whistle-Blowing Good For An Organization Or Not?

Is Whistle-blowing Good for an Organization or Not?

This paper will explore whistle-blowing by giving a definition, a brief history of a couple of famous whistle-blowers, and how whistle-blowers have a positive effect in today’s business.

Origins of the Whistle-blower:

“The term whistleblower derives from the practice of English Bobbies (police officers) who would blow their whistle when they noticed the commission of a crime. The blowing of the whistle would alert both law enforcement officers and the general public of danger”. (wikipedia)

In more modern terms related to the business world, a whistleblower is an employee, former employee, of a business or government agency, who reports misconduct to people or entities that have the power and presumed willingness to take corrective action. (wikipedia) Generally, the wrongdoing is a violation of a law, a rule, a regulation, and/or a direct threat to public or shareholders. The whistle-blowing report may include; fraud, health or safety violations, corruption, or lack of concern for the law.

Brief History

Attitudes toward whistle-blowing have evolved considerably during the past 50 years in corporate America, from the early days of the "company man", where loyalty to the company was the norm, to the present time when public outrage about corporate misconduct has created a more positive climate for whistle-blowing.

Persons who blow the whistle generally do so out of a sense of public duty arising from high personal moral standard and the need to maintain professional integrity and standards. Because of the high personal risk attached to whistle-blowing, reporting is not taken lightly as whistle-blowers become vulnerable to unfavorable actions being taken against them by way of retaliation.

Prior to the 1960s, corporations had broad employee policies and could fire an employee at will. Employees were expected to be loyal to their organizations at all costs. Among the few exceptions to this rule were unionized employees, who could only be fired for "just cause," and government employees because the courts upheld their constitutional right to criticize agency policies. In part because of this lack of protection for whistleblowers, problems were often concealed rather than solved. Probably the most well known example was in asbestos manufacturing, where the link to lung disease was clearly established as early as 1940, but actively suppressed by company officials. The first product liability lawsuit against an asbestos manufacturer was not successfully publicized until 1971. (Asbestos, History of) This case set precedence in the history of whistle-blowing, proving that though the battle was difficult, good could come out of “tattling” on big business.

“Even in cases where whistle-blowing occurred, it was not always heeded. In 1972, Firestone Tire Director of Development Thomas A. Robertson sent top management a memo warning that the 500 tire was inferior and subject to belt-edge separation at high speeds. His warning was ignored despite reports about poor performance from major customers such as General Motors, and the 500 tire was kept on the market” (Lieff, Cabrase, Helmann, & Bernstein). Time magazine reported that accidents caused by blowouts had resulted in more than 41 deaths and hundreds of serious injuries; the company had already replaced 3 million tires and spent millions of dollars in personal injury lawsuits. If Robertson had blown the whistle externally, such disasters for the public and the company could have been avoided. Unfortunately, it appears Firestone did not make the necessary organizational changes to prevent such disasters again, since the story repeated itself in 2000. After an investigation by the National Highway Traffic Safety Administration, Ford announced a recall and replacement of 3.5 million Firestone tires in October 2000. This recall occurred after 200 deaths and 700 serious injuries had already been reported because of the unsafe tires. The ultimate result of inaction by these groups was that Firestone and Ford were called to testify before Congress, millions of dollars were spent settling lawsuits, and a century-long relationship between Ford and Firestone was severed in 2001.

There have been successful cases of whistle-blowing although even in these cases, the personal and professional toll on the individuals has been heavy. In 1996, Jeffrey Wigand, a tobacco researcher, revealed that Brown & Williamson Tobacco Corporation knew tobacco was