DeVaughn Narratives

Creating digital stories that resonate and inspire

Month: April 2016

Factors that Contribute to Whistleblowing


Whistleblowing: Factors that Contribute to Management Accountants Reporting Questionable Dilemmas

Whistleblowing is a term used to describe when a person with inside knowledge, usually a company employee, discloses corporate wrongdoing to the public or to internal or external authorities. In the 1980s states began to provide protection to employees who reported corporate wrongdoing. The Whistleblower Protection Act of 1989 extended these protections to the federal level. Over the last decade whistleblowing has escalated in an environment of increased corporate misconduct. Increased legal protections for whistleblowers can also be attributed to this rise. The enactment of the Sarbanes-Oxley Corporate Reform Act of 2002 provided whistleblowers with a new level of increased protection. These increased protections include, but are not limited to, discharge, demotion, suspension, harassment, or discrimination in any way against whistleblowers. The law also established criminal penalties where executives who retaliated against whistleblowers could receive up to 10 years imprisonment. Sarbanes-Oxley also required companies to adopt procedures so that whistleblower complaints could be brought forth without fear of reprisal. The law also includes provisions that streamline whistleblowing cases so they are not delayed for many months or years by administrative hearings and other time-consuming procedures.

The passing of the Sarbanes-Oxley Act placed an increased emphasis on ethical values of accounting professionals. In their article entitled, Whistleblowing: Factors that Contribute to Management Accountants Reporting Questionable Dilemmas, Tara Shawver and Lynn H. Clements looked at various factors that affect the likeliness of an accountant blowing the whistle. These factors include philosophical values, anonymity, cash reward, ethical climate, organizational commitment, job satisfaction, enforcement of a code of ethics, and job guarantees. This study found the most important considerations when it comes to predicting whether the accountants would blow the whistle were that they were guaranteed their job security and assured anonymity. Other factors such as “job satisfaction, organizational commitment, perception of ethical values, and perceptions of an enforced ethics code are not significant factors in the whistleblowing intentions for this sample of practicing management accountants.” (Management and Accounting Quarterly Journal, Vol. 9, No. 2, Winter 2008, p.26).

This article reports on a study containing three scenarios involving unethical behavior in the workplace. The first case involved approving a company purchase of a software program for personal use valued at $29.95. The second case involved using company funds to purchase a laptop and printer for $1,900 intended for personal use of a family member. Case 3 involved the embezzlement of $100,000. The study’s findings showed that the respondents felt that all the scenarios presented were unethical; however, they were more likely to blow the whistle on situations involving higher monetary amounts.

Relation to Ethics

When a company incorporates a code of ethics into its business practices, it helps assure that business is conducted in a fair and professional manner. A company’s ethical conduct should be an integral part of its corporate landscape. Management should encourage ethical conduct in the workplace with the aim of creating an atmosphere of trust within the organization. In that way, if workers trust that managers will listen and fix a problem, then they do not feel compelled to resort to whistleblowing. When trust is present in the workplace, the need for whistleblowing is greatly reduced due to the open and honest policies management has fostered when employees feel safe and secure raising any issue and are confident that the issue in question will be resolved. Research shows that employees are much more likely to report corporate wrongdoing to outside authorities when they feel the company’s management will not be responsive to them. Research also indicates that employees are much more likely to report corporate wrongdoing internally when they believe the company’s top management will address the issue that lower level managers have ignored.

In its own way, whistleblowing can be a positive piece of a company’s overall strategy for social responsibility. Social responsibility can be defined as “the way its managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole” (Gareth R. Jones and Jennifer R. George, Contemporary Management, Sixth Edition). Socially responsible companies promote an environment of trust, good will, and confidence which are all attributes for a good corporate reputation that can be a competitive advantage when promoting its good and services. That in turn can lead to increased business and profitability.

WhistleblowerWhistleblowing prevents unnecessary harm to stakeholders by exposing unethical practices and corporate wrongdoing. A company is in business to make a profit, but not at any cost. Whistleblowing would identify financial fraud, abuse, waste, and corruption which would negatively affect a company’s performance. Fraud and corruption destroys shareholders value and can seriously threaten a company’s development. Companies should incorporate ethical corporate excellence into their business practices. It is important that companies place a high value on fairness, honesty, integrity, and respect with all stakeholders of the company. These stakeholders include, but are not limited to, the stockholders, managers, employees, customers, suppliers and distributors.

Stockholders who see managers behaving unethically may refuse to invest in their companies, and this will decrease the stock price, undermine the companies’ reputations, and ultimately put the managers’ jobs at risk.

Ultimately, companies will be more effective and efficient so business will be more viable due in part to the companies’ positive reputation and integrity.

My Reaction

I feel that even with protections in place, whistleblowers can still face potential retaliation and can be blacklisted in the industry. Is speaking out going to be in the company’s or public’s best long-term interest? When you make the decision to whistle-blow, you must carefully consider your reason. It should not be out of revenge. You should have the company’s or public’s best interest in mind when you make the decision to go public. Sometimes whistleblowing might be the only way the company or the public can find out about a serious problem or the only way it can get corrected.

The study found that theoretically that whether there was a cash reward or not was not significant. In reality, whistleblowers have received high monetary rewards. Some whistleblowers have undergone retaliation by job loss or in some cases imprisonment where whistleblower protections breakdown. Consider the high-profile whistleblowing case of Bradley Birkenfeld.

Birkenfeld was a banker who exposed the illegal tax shelters created by Swiss banks for Americans. He received a federal prison term as a result of the information uncovered by his whistleblowing. Ironically, he could also be the recipient of a significant cash reward when the IRS recovers tax revenue that the American accountholders were trying to shelter in the Swiss accounts. What sounds good in theory may not hold up in real life situations where human nature comes into play. Another problem associated with whistleblowing is the stigma of being a snitch, which has a significant negative image within our culture.

Also, gender may have an impact on whistleblowing. The authors also note that future research would be helpful in considering gender differences when it comes to whistleblowing. Other research casts an interesting light on gender roles. Some researchers believe that men are more likely to whistle-blow than women due to their potential financial gain. Other data suggests that within the last several years women are more likely to become whistleblowers as a result of their perceived ethical duty. Such were the high-profile whistleblowing cases of Sherron Watkins, Vice President of Enron, and Cynthia Cooper, an auditor with WorldCom, who were named Time Magazine “Year of the Whistleblower” Persons of the Year for 2002.

The article examines different hypothetical situations for whistleblowing but does not take into consideration human behavior especially in today’s tough economic climate even with protections in place. I believe that it is somewhat questionable that employees would whistle-blow which could place their career in jeopardy. There is always going to be doubt as to just how secure organizational safeguards protect anonymity.

There are a lot of personal variables involving whistleblowing and one is how well people are educated about ethical and moral issues. Another variable centers around cultural differences because different cultures may have varying standards of what is acceptable. That said, whistleblowing can also be open to personal or organizational biases. An additional variable is to what extent these behaviors are traditionally acceptable or professionally acceptable. In my opinion, whistleblowing often is far from black and white – it is more like varying shades of gray because of all the different human variables involved.

Is Your Boss a Bully?

My Boss is a BullyIs Your Boss a Bully?

Margaret arrived at work early as always and turned on the lights to get ready for her day in a busy hospital in Baltimore. As soon as she arrived, a lost and scared patient had wondered into her office needing help. Margaret’s peaceful morning was shaken when her boss, a VP and a member of the senior management team, arrived shortly thereafter in a particularly foul mood rudely interrupting her discussion with the patient yelling at her to turn on the copier because she needed copies. Margaret’s boss insulted her in front of the patient then later wrote her up insisting it was more important to turn on a copier for her boss rather than helping a patient. Although Margaret knew that her performance was satisfactory, her boss always made her think she could lose her job. In fact, Margaret’s boss often made derogatory comments that she was stupid or that she was never going anywhere in the organization except out the door. Never was any respect shown to Margaret.

Margaret endured repeated verbal abuse in both the office and at off-site company events. Her boss’ offensive behavior and unreasonable work demands led to Margaret’s on-going humiliation.

Margaret’s boss is considered the classic bully boss. Bully bosses use intimidation and humiliation to keep their employees on task, not realizing that their behavior often has the opposite effect.

Other Signs of a Bully

Since a bully doesn’t always show you their hand, you need to be wary of these signs:
• Your boss ridicules or humiliates you in front of peers or colleagues (or in office-wide correspondence).Examples of Bullying
• You find yourself routinely excluded from important meetings or conversations.
• Your boss reassigns your projects without apparent cause and without consulting you.
• You used to socialize with your coworkers, but now they no longer ask you to join them.
• You dread going to work and feel anxious or nauseated at the thought. You’re often tempted to call in sick.
• Your health deteriorates: Your blood pressure goes up, you experience cardiovascular or neurological problems, you gain weight, or you can’t sleep.
While it may be immoral and unprofessional, it is not illegal in the United States for managers to threaten, insult, humiliate, ignore or mock employees. Nor is it illegal to gossip and spread rumors, withhold information, or take credit for someone else’s work.

Unfortunately, these types of bullying are not rare; they take place with distressing frequency.

Health Risks

Anyone spending a significant amount of time in a hostile environment is going to feel somewhat stressed out. But nearly half of bullied workers go on to develop serious anxiety and depression or other physical health conditions.

Emotional angst affects physical health. When you’re continually stressed, your body pumps out fight-or-flight hormones like Cortisol and adrenaline, causing your blood pressure, heart rate, and blood sugar to skyrocket. That ups your risk of heart problems and diabetes. Adults who are harassed at work are also more prone to migraines, stomach upset, body aches, panic attacks, neurological conditions, immune system disorders, and other ailments.

Margaret suffered with chronic migraines for years when she was continually bullied by her boss.

Impact of a Hostile Work Environment

Bullies do a lot of damage in organizations. A bullied employee shows signs of disengagement and lower productivity. They make subordinates run scared and puts people in a protective mode, which interferes with the company’s ability to generate innovation. Add to it the rage the bullied employee feels towards the bully and the negativity felt for putting up with such behavior. In fact, these are hardly prime conditions for doing your best work or any work at all.

Fighting Back

Some quit their job after months of torture, but many employees end up staying for months or years in an abusive situation because of a shaky job market or feel the situation may get better. Even if you want to salvage your position, it can be difficult to get help.

Filing a complaint with human resources may seem like a logical first step, but oftentimes it backfires because HR is loyal to top management. Normally, HR does not want to get involved unless there’s a legal reason to do so. As long as your boss isn’t sexually harassing or mistreating you because of your age, race, gender, sexual orientation, or disability, they are generally within their rights to make snide comments or squash your self-esteem.

Tactics You Can Use

Studies have shown that workers who fight back might have the upper hand in the long run. If your boss is hostile, there appears to be benefits to reciprocating. Employees felt better about themselves because they didn’t just sit back and take the abuse.

Confront the bully in private: For example, “I’m sorry you feel you have to do that, but I will not put up with that kind of behavior.” It can be startlingly effective. Bullies lack boundaries on their own behavior.

The Boss Sets the Example for the Team

Good leaders will see the decentralization of the group and will work to correct it. Bully bosses, on the other hand, will exacerbate the problem by supporting their favorite workers and further abusing the employees they dislike. From the CEO down through each layer of management, every leader sets the tone for how the individuals beneath him or her will behave and is ultimately responsible for the atmosphere in which people work. The boss sets the example for the entire team.

In conclusion, if you ever find yourself in this situation, ensure your résumé is ready in case you need to find employment elsewhere. It may not be easy to secure a new position but no job is worth jeopardizing your health.

Powered by WordPress & Theme by Anders Norén