Essay on Business Ethics

2) Please explain the different kinds of whistle blowing. Provide at least one argument for why whistle blowing is morally permissible, and not morally permissible. Please explain under what circumstances is whistle blowing is not only morally permissible, but also, morally required.


Professional responsibility of a manager is expressed in the voluntary compliance with the principles of respect, trust, fairness, integrity, professional competence, and may have extreme forms, such as office revelations and whistle blowing. The issue designated by the term “whistle blowing” means an employee’s informing the superiors, government agencies, or the public and media of the violations taking place in the organization.

On the one hand, whistle blowing protects private interests (the interests of companies and their owners), and for objective reasons is common in modern business corporations. Furthermore, whistle blowing is a required element of business ethics programs, implemented in many companies (De George 301). This can be explained by differences in the benefits for stakeholders: shareholders, directors, top-managers, and workers. For stable operation of the corporation in the long run, these differences should be smoothed by establishing and maintaining a unified corporate culture.

As a result of ethics programs at companies and, consequently, the functioning of the whistle blowing system, the level of confidence in the management of the company on the part of other stakeholders increases, including investors in the stock market (De George 312).

Ethics programs are designed to:

”“                Increase confidence in the company on the part of outside stakeholders (investors, government regulatory bodies);

”“                Structure the relationship between the internal stakeholders (shareholders, board members, top-managers, employees) by creating a corporate culture working on long-term sustainable development of the company.

The moral dilemma that a whistle blower in the company may face is the choice of “whose interests to protect”: the interests of the corporation (and, respectively, people, including ordinary workers, who get wages at it), or the interests of the violator receiving a personal benefit at the expense of the corporation and people working at it.

The motivation for whistle blowing among middle managers and employees depends on the following factors (De George 306-308):

”“                Quality of corporate values;

”“                Confidence in the management;

”“                Confidence in the management’s commitment to observe corporate values;

”“                Confidence in not being prosecuted for whistle blowing;

”“                Possibility of material rewards for whistle blowing;

”“                Equality of responsibility for all violators of code and internal documents.

In general, whistle blowing is voluntary. It is understood as a voluntary assistance to state agencies. If it is about mandatory provision of information on business partners or customers (as provided by law for banks and professional participants of securities market), then it is not whistle blowing but exercise of the requirements of state control, and is morally justified, especially if the product my cause harm to the consumer, produce threats to public safety, etc. (De George 309). In addition, information on violations of the law cannot be trade secrets. Therefore, whistle blowing cannot be banned by statutes or the company’s internal documents.

One should also bear in mind that whistle blowing is a very good tool for the implementation of feedback under managing influence, and thus, for achievement of the company’s internal control. Whistle blowing systems should be implemented in companies namely as elements of ethics program. Employees should understand that it is one of the forms of struggle for the implementation of corporate values (De George 311). Only in this case whistle blowing will not become an instrument of career struggle and lurk, which are not morally permissible (De George 306). The hearings must be objective; the information about the authorship of the knowingly false messages may be disclosed in the company. Confidentiality must be guaranteed only in case of credible reports, or at least for notifications that do not contain lies, including the assumptions that are also allowed. Notifications should not be based on knowingly false or forged documents (De George 307).

Violations of the code of ethics may not always be resolved through legal enforcement as ethical violations are often not violations of the law. Therefore, the leverages of respond to a breach of ethical code are usually such means as public reprimand, the discussion of ethical misconduct at the working group meeting, or at the collegiate governing body meeting (Board of Directors), cancelation of incentive payments (bonuses), or denial in career promotion.

Whistle blowing as a duty to report violations (even anonymously) may well be fixed as an obligation of all employees in the company’s internal document which the code of ethics is. The obligation to comply with the statutes and the company’s internal documents are usually fixed in the contract of employment with the employee. At the same time, it is risky to provide legal sanctions for non-execution of this duty (such as a reprimand or dismissal). The court may recognize the application of legal sanctions illegal simply because of the lack of relevant court practice. It is therefore advisable to apply the same abovementioned measures for non-whistle-blowing as for committing ethical violations: cancelation of incentive payments (bonuses), denial in career promotion, etc.

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