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From Inaction to External Whistleblowing: The Influence of the Ethical Culture of Organizations on Employee Responses to Observed Wrongdoing



Putting measures in place to prevent wrongdoing in organizations is important, but detecting and correcting wrongdoing is just as vital. Employees who observe wrongdoing should therefore be encouraged to respond in a manner that supports corrective action. This paper examines the influence of the ethical culture of organizations on employee responses to observed wrongdoing.The findings show that, contrary to transparency and congruency of management, many other dimensions of ethical culture were negatively related to inaction and external whistleblowing and positively related to direct interven-tion, reporting to management and calling an ethics hotline. The model used for ethical culture explained 27.5% of intended responses by employees.
From Inaction to External Whistleblowing:
The Influence of the Ethical Culture
of Organizations on Employee Responses
to Observed Wrongdoing Muel Kaptein
ABSTRACT. Putting measures in place to prevent
wrongdoing in organizations is important, but detecting
and correcting wrongdoing are also vital. Employees who
detect wrongdoing should, therefore, be encouraged to
respond in a manner that supports corrective action. This
article examines the influence of the ethical culture
of organizations on employee responses to observed
wrongdoing. Different dimensions of ethical culture are
related to different types of intended responses. The
findings show that several dimensions of ethical culture
were negatively related to intended inaction and external
whistleblowing and positively related to intended con-
frontation, reporting to management, and calling an ethics
KEY WORDS: wrongdoing, ethical culture, reporting,
ethics hotline, whistleblowing
It is widely acknowledged that it is in the strategic,
financial, and legal interest of an organization to
take adequate measures to prevent wrongdoing
(Bamberger, 2006; Karpoff et al., 2008; Schnatterly,
2003). In addition to this, organizations also have a
societal and ethical obligation to prevent wrongdo-
ing from occurring (Tulder and Van der Zwart,
2006). However, regardless of how scrupulous an
organization is in rising to this challenge, it would be
misguided to believe that wrongdoing can be avoi-
ded entirely (Trevin
˜o and Nelson, 1999). Even with
the best preventative measures in place wrongdoing
still occurs. In keeping with the recommendations of
the U.S. Federal Sentencing Guidelines for Orga-
nizations, organizations are thus advised to detect
and correct wrongdoing as it arises.
Employees are a ‘‘critical’’ (Miceli et al., 2008,
p. 2), ‘‘increasingly important’’ (Miceli and Near,
2005, p. 100) source for detecting wrongdoing
(Miethe, 1999). Dyck et al. (2008), for example,
show that 18.3% of the corporate fraud cases in large
U.S. companies between 1996 and 2004 were de-
tected and brought forward by employees. An
analysis by KPMG (2007) of 360 instances of fraud in
organizations in Europe, the Middle East, and Africa
shows that anonymous tipping by employees was the
primary source of detection: 25% of the frauds were
brought forward by employees. Failing to create the
conditions that promote internal reporting of wrong-
doing ‘‘foolishly invites catastrophe’’ as Callahan et
al. (2002, p. 195) put it. Therefore, it is crucial that
organizations stimulate employees who suspect or
observe wrongdoing not to ‘look the other way’ or
‘stick their head in the sand’, but to respond in such
a manner that the wrongdoing and wrongdoer(s) can
Muel Kaptein, PhD, is Professor of Business Ethics and
Integrity Management at the Department of Business-Society
Management at RSM Erasmus University as well as partner
at the international assurance and advisory firm KPMG. His
research interests include the management of ethics, the ethics
of management, and the measurement of ethics. He has
published papers in Academy of Management Review,
Business and Society, Journal of Business Ethics,
Journal of Management, Journal of Management
Studies, Journal of Organizational Behavior, and
Organization Studies. He is author of the books Ethics
Management (Springer, 1998), The Balanced Company
(Oxford University Press, 2002), The Six Principles of
Managing with Integrity (Articulate Press, 2005), and
The Living Code (Greenleaf, 2008). More information
can be found at muelkaptein@com.
Journal of Business Ethics (2011) 98:513–530 Springer 2010
DOI 10.1007/s10551-010-0591-1
be stopped and corrected (Miceli et al., 2009). For
this reason, the U.S. Federal Sentencing Guidelines
and Sarbanes-Oxley Act (Section 806, 301 and
1107) advise organizations to create sufficient
opportunity for employees to report wrongdoing
As Miceli et al. (2009) remark, employees often
refrain from reporting wrongdoing despite their
awareness of it because employees believe that
their organization does not welcome reports of
wrongdoing. According to Mesmer-Magnus and
Viswesvaran (2005), one reason why organizations
do not welcome reports of wrongdoing is because it
challenges the organizational hierarchy. As a conse-
quence, employees who report wrongdoing run the
risk of one or more types of retaliation such as
nullification, isolation, defamation, or expulsion
(Dworkin and Baucus, 1998). The question then is
how organizations can create an environment that
welcomes the disclosure of wrongdoing. According
to Berry (2004), the ethical culture of organizations
plays a crucial role in stimulating employees to
report wrongdoing. To date, no study has empirically
examined how the ethical culture of organizations
influences the different types of responses employees
may have to observed wrongdoing. In this article we
will therefore examine how different dimensions of
ethical culture relate to different intended responses
of employees to observed wrongdoing. The scientific
contribution of this article is threefold.
First, although many studies have been conducted
on the relationship between contextual variables –
such as national culture (Chiu, 2003; Patel, 2003;
Tavakoli et al., 2003) and organizational structure
(King, 1999) – and employees’ response to observed
wrongdoing, the ethical culture of organizations as
such has not been empirically examined. In
this article, the Corporate Ethical Virtues Model
(Kaptein, 2008b), consisting of eight dimensions,
will be used to assess the ethical culture of organi-
zations. The model was developed to understand
and explain unethical behavior by employees. In this
article, we will examine whether the model can also
help us to understand the response of employees
when they observe wrongdoing.
Second, whereas most research in the field focuses
on internal and/or external whistleblowing (Lewis,
2001; Miceli et al., 2008; Miethe, 1999), this article
also examines reporting wrongdoing via the regular
chain of command; that is, to management as well as
resolving the wrongdoing by, for example, approach-
ing the wrongdoer directly. Whether inaction can be
explained by the ethical culture of organizations is
also examined. An examination of these five differ-
ent responses may improve our understanding of the
way in which the different dimensions of ethical
culture are related to each response and the way in
which the responses are related to each other. For
organizations in particular it is relevant to know how
different, complementary – as opposed to one or
two individual – responses of employees contribute
to correcting wrongdoing in the organization. Fur-
thermore, the inclusion of direct confrontation and
reporting via the regular chain of command are
particularly useful, as these responses may well be
more efficient, effective, and ethical ways to respond
to wrongdoing than internal or external whistle-
blowing (cf., Velasquez, 2005).
Third, whereas most studies use data obtained
from students (Ayers and Kaplan, 2005; Zhuang
et al., 2005), a single sector, such as the federal
government (Miceli et al., 1999), or specific func-
tion, such as internal auditors (Miceli and Near,
1994), nurses (King, 2001), or managers (Keenan,
2002), this article uses a broad sample of the U.S.
working population. Such a sample helps us to draw
more generic conclusions about employee responses
to observed wrongdoing. It also provides insight into
the ethical culture of U.S. organizations and the
responses it encourages among employees who
observe wrongdoing.
Responses to observed wrongdoing
Employees who observe wrongdoing are faced with
the question ‘‘Do I stand up or do I stand by?’’
(Miceli and Near, 2006), ‘‘Do I tell or do I not tell?’’
(Berry, 2004), or ‘‘Do I snitch or do I not snitch?’’
(Pershing, 2003). When employees refrain from
taking action, they become ‘‘inactive observers’’
(Miceli and Near, 1992) or ‘‘silent observers’’
(Rothschild and Miethe, 1999), which is undesirable
when the norm is to prevent, detect, and correct
wrongdoing (Miceli et al., 2008). When employees
decide to take action, different options are available
514 Muel Kaptein
(Elliston, 1982; Hirschman, 1970; Jubb, 1999;
Miceli and Near, 1984). The literature on whistle-
blowing draws a distinction between internal and
external whistleblowing. Whistleblowing is mostly
defined as ‘‘the disclosure by organization members
(former or current) of illegal, immoral or illegitimate
practices under the control of their employers, to
persons or organizations that may be able to effect
action’’ (Near and Miceli, 1985, p. 4). In this
regard, internal whistleblowing is usually defined
as reporting wrongdoing outside the regular chain
of command via, for example, confidential hotlines
(Miceli et al., 2008). External whistleblowing is
then defined as reporting wrongdoing to someone
outside the organization who may be able to stop or
correct it, such as the media, a government agency,
a non-governmental organization, or a professional
organization. Most external whistleblowers first
blow the whistle internally (Miceli et al., 2008;
Rothschild and Miethe, 1999) as the latter is less
risky for the whistleblower (Miceli and Near, 2002)
and also less detrimental to the organization (Hassink
et al., 2007). In contrast, external whistleblowing
may lead to public embarrassment, government
scrutiny, hefty fines, and litigation (Berry, 2004)asit
not only exposes internal wrongdoing, but also a
failing organization, one which is unable to stop and
correct wrongdoing itself.
Although most research on employees’ responses
to observed wrongdoing focuses on these two types
of whistleblowing (cf., Miceli et al., 2008), other
responses exist that tend to be preferred by ethicists
(Bowie, 1982; DeGeorge, 1986; Velasquez, 2005)
and organizations alike: confronting the wrong-
doer(s) directly and reporting to management. These
are often referred to in codes of conduct and whis-
tleblowing policies (Hassink et al., 2007). Employees
who observe wrongdoing can resolve the wrong-
doing by approaching and confronting the wrong-
doer(s) directly (Jubb, 1999). This gives the
wrongdoer(s) the opportunity to take corrective
action. It also gives the responding employees the
opportunity to verify their interpretation of the
alleged wrongdoing. For example, King (2001)found
that nurses who observed unintentional wrongdoing
preferred to approach the wrongdoer directly in
order to give the wrongdoer the opportunity to
explain and correct their conduct, and to learn from
the experience so as to avoid repeat behavior in
future. Therefore, if employees successfully resolve
the wrongdoing through confrontation, unreported
wrongdoing to management is, contrary to the view
of Miceli et al. (2008), not necessarily negative.
However, some types of wrongdoing, such as legal
transgressions, might require that the observer always
reports the wrongdoing (also) to management so that
the wrongdoer can be sanctioned formally, the
wrongdoing can be recorded, and measures can be
taken to correct the wrongdoing so as to prevent it
from occurring again. Also when the wrongdoer is
approached directly by an observer but does not
respond adequately, the observer could report the
wrongdoing to management. Should management
not respond appropriately, employees could report
the wrongdoing to higher management until the
report is handled satisfactorily. If management does
not respond satisfactorily or if employees fear that
management will not respond satisfactorily, employ-
ees are usually advised to report wrongdoing via the
hotline (Hassink et al., 2007).
In this article, we will study five types of employee
responses to observed wrongdoing: inaction, con-
fronting the wrongdoer(s), reporting to manage-
ment, calling an internal hotline, and external
whistleblowing. On the one hand, the challenge for
organizations is to encourage employees who detect
wrongdoing to take action and to discourage inaction
so that the wrongdoing and the wrongdoer can be
corrected. On the other hand, the challenge is to
ensure that employees take action internally rather
than blow the whistle externally so that the organi-
zation can draw on its self-correcting capacity rather
than being confronted with external repercussions.
Ethical culture
Research shows that the motives for internal and
external whistleblowers are not purely altruistic, but
mixed. Dozier and Miceli (1985) describe these
motives as prosocial in that whistleblowers weigh the
costs and benefits of reporting wrongdoing to
themselves and others (Miceli and Near, 1985).
Dozier and Miceli (1985) are of the first scholars to
have pointed out the relevance of contextual vari-
ables that may encourage or discourage reporting
wrongdoing. Empirical research even suggests that
contextual variables explain more variance in the
515From Inaction to External Whistleblowing
decisions of whistleblower to act than individual
variables do, such as marital status, age and education
(Miceli and Near, 1992). According to Miceli and
Near (1984), it is therefore important that the
organizational context enable the desired response.
When the organizational context is unfavorable
employees tend to report externally or not at all
(Miceli and Near, 1992).
The ethical culture of an organization is one
component of the organizational context and can be
defined as those elements of the perceived organi-
zational context that impede unethical behavior and
promote ethical behavior (Trevin
˜o and Weaver,
2003). Ethical culture represents part of the informal
organizational context (Murphy, 1988), whereas
policies, processes, and programs represent part of
the formal organizational context (Ferrell et al.,
To date, the only empirically tested model for the
ethical culture of an organization is the Corporate
Ethical Virtues Model, abbreviated as CEV Model,
which will be used in this article. Following Solo-
mon’s virtue-based theory of business organizations
(1992,1999), Kaptein (1998,2008b) posits that the
virtuousness of an organization can be determined
by the extent to which the organizational culture
promotes ethical, and impedes unethical, employee
behavior. Accordingly, a corporate ethical virtue is a
dimension of the ethical culture that promotes eth-
ical behavior and impedes unethical behavior. To
define desirable virtues, Kaptein (1998) conducted a
qualitative analysis of 150 diverse cases of wrong-
doing caused by a failing organizational culture. The
resulting list of items were subjected to exploratory
and confirmatory factor analyses resulting in eight
dimensions of the ethical culture of organizations
(Kaptein, 2008b). Below a hypothesis is developed
on the relation between each dimension and each of
the five possible responses of employees to observed
wrongdoing in their organization.
Following Near and Miceli (1985), wrongdoing is
defined as illegal, immoral, or illegitimate practices.
Although some studies have shown that the type of
wrongdoing affects how employees respond to ob-
served wrongdoing (Near et al., 2004; Robinson and
O’Leary-Kelly, 1998; Schmidtke, 2007; Victor et al.,
1993), this article treats wrongdoing as a singular
construct. Including different types of wrongdoing
would have made this study too complex as a dis-
tinction is already made between different dimen-
sions of culture and different types of responses.
The first cultural dimension is clarity, which is
defined in the CEV Model as the extent to which
the organization makes ethical expectations, such as
values, norms, and principles concrete and under-
standable to employees. According to Near and
Miceli (1985) and Greenberger et al. (1987), this
degree of clarity may determine how employees
respond to observed wrongdoing. The greater the
clarity, the greater the responsibility employees will
feel to uphold it, and the greater the likelihood that
employees who observe wrongdoing will confront
the wrongdoer(s), report to management, and call
the hotline. The greater the level of clarity, the more
employees will regard inaction as rendering them
complicit (Jubb, 1999). By reporting wrongdoing,
employees also evince their understanding of the
norm that is violated (Callahan et al., 2002). In
contrast, tolerating wrongdoing would suggest that
the wrongdoing is ‘‘not that wrong’’ and create
confusion, thus undermining clarity.
The relationship between clarity and external
whistleblowing is less clear. When an organization
has no explicit standards to distinguish right from
wrong, external reporting is less likely because it is
more difficult to hold the organization accountable
for conduct that has not been defined as wrong than
when the organization violates its own standards.
Violating these standards can be a reason to report,
but external reporting is most likely in the event of
transgressing a norm that is defined by society or
stakeholders as legitimate and wrong to violate
(Chung et al., 2004; Miceli et al., 1991). In such
cases, it is not the clarity of organizational norms that
is of relevance, but those of society. So we do not
expect to find a relationship between clarity of
organizational norms and external whistleblowing.
Hypothesis 1:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of clarity is positively related to confrontation,
reporting to management, and calling a hotline,
negatively related to inaction, and unrelated to
external whistleblowing.
516 Muel Kaptein
Congruency of local and senior management
A second and third dimension of the ethical culture
of organizations is the congruency of local and senior
management, which refers to the extent to which
managers apply organizational standards to their own
behavior. In this capacity, managers act as role
models, which is important as it reinforces the
importance of ethics and the clarity of standards. It is
also important since employees are more likely
to report upward if they trust their superiors
(Blackburn, 1988; Brown et al., 2005). Near and
Miceli (1996) found that internal whistleblowers
report greater value congruence with management
than inactive observers. This corresponds with the
theory of value congruence as developed by Enz
(1988), which holds that employees whose values
correspond to that of management have relatively
greater power in the organization than those whose
values deviate. Furthermore, it is more likely that a
transgression will be reported to a manager if the
manager has not committed the same type of trans-
gression or is not implicated in the transgression
observed. We, therefore, expect a positive relation-
ship between congruency of management and
reporting wrongdoing to management.
With regard to reporting wrongdoing to a hotline,
we expect a positive relationship with congruency of
senior management and a negative relationship with
local management. A hotline is usually considered to
be a means to report wrongdoing when local man-
agement is implicated in the wrongdoing or when
previous reports of wrongdoing were handled
unsatisfactorily. Employees who call a hotline are in
fact blowing the whistle on their immediate superiors
(Elliston, 1982) as supervisors are often held respon-
sible for wrongdoing of their subordinates (Rothwell
and Baldwin, 2007). The greater the congruency of
local management, the less likely employees are to
contact the hotline and the more likely they are to
notify their supervisor or other local manager. At the
same time, employees may perceive the hotline as an
extension of senior management as it often acts as
means to report wrongdoing higher up in the orga-
nization. Callahan and Dworkin (1994) note that the
more senior the managers that are involved in the
wrongdoing, the less useful a hierarchical reporting
system is as it amounts to reporting wrongdoing to
the wrongdoer – even if the system allows for
anonymous reporting. For these reasons, congruency
of senior management is expected to be positively
related to the use of hotlines.
Regarding external whistleblowing, we expect a
negative relationship with both local and senior
management. When managers are not viewed as role
models and therefore less trustworthy, employees are
more likely to report wrongdoing to an external
organization or institution they trust, because
employees will report to those persons or organiza-
tions they feel comfortable with. Also the more the
management is implicated in the wrongdoing, the less
likely the report will be dealt with effectively and the
more the external reporting will be perceived as the
only option to stop and correct the wrongdoing
(Miethe, 1999).
The relationship between congruency of man-
agement and confrontation is less easy to predict. On
the one hand, the less congruent the management is,
the less the employees will be able to rely on the
intervention of management to stop the wrongdoing
and the more they will be required to take action
themselves. At the same time, the less congruent the
management is, the less supported and backed up
by management the employees will feel to con-
front the wrongdoer themselves (Mesmer-Magnus
and Viswesvaran, 2005). Employees will not be able
to count on management to correct wrongdoing
when wrongdoers do not respond satisfactorily to
employees’ attempts to resolve the wrongdoing
directly. Wrongdoers may also take this into account
in deciding how to deal with colleagues who report
wrongdoing to them. On balance, we expect con-
gruency of management to be positively related to
resolving the wrongdoing directly as the presence of
role modeling has a greater impact than the absence
of role modeling. As a consequence, we expect
congruency of management to be unrelated to
inaction because more congruence leads to more
reporting to management, but also to less confron-
tation by employees.
Hypothesis 2:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of congruency of local management is positively
related to confrontation and reporting to man-
agement, negatively related to calling a hotline
and external whistleblowing, and unrelated to
517From Inaction to External Whistleblowing
Hypothesis 3:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of congruency of senior management is positively
related to confrontation, reporting to management
and calling a hotline, negatively related to external
whistleblowing, and unrelated to inaction.
The next dimension of the ethical culture of orga-
nizations is feasibility, which refers to the extent to
which the organization makes sufficient time,
budgets, equipment, information, and authority
available to enable employees to fulfill their respon-
sibilities. In the CEV Model, the dimension of fea-
sibility is relevant because the more pressure the
employees are under to perform and meet targets and
the fewer resources they have available, the higher
the risk of wrongdoing. We do not expect to find any
relationship between feasibility and the five types of
responses of employees who observe wrongdoing.
On the one hand, the lower the feasibility, the fewer
resources the employees have to report and the less
likely they are to report. Reporting can be time-
consuming for the observer as well as the recipient.
When observers and possible recipients of reports are
busy, there is less opportunity to meet each other and
to discuss the wrongdoing. Low levels of feasibility
may also stimulate employees to believe that stopping
the wrongdoing is not a priority because meeting
targets is more important. On the other hand, the
lower the levels of feasibility, the more likely it is that
employees will regard it to have caused the observed
wrongdoing, and the more reason they may have to
report it in order for the wrongdoer and organization
to learn from it. It is difficult to determine which of
the two factors has a greater impact on the responses
of employees. Therefore, we expect that these
factors counterbalance each other and that the net
effect of feasibility on the responses of employees is
Hypothesis 4:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of feasibility is unrelated to confrontation,
reporting to management, calling a hotline,
external whistleblowing, and inaction.
Another cultural dimension is supportability, which
refers to the extent to which the organization
stimulates identification with the ethics of the
organization among employees. Tyler and Blader
(2005) found that when employees are encouraged
to identify with the ethical values of their organi-
zation, they will be intrinsically more motivated to
comply with the ethical standards of the organi-
zation. The more the employees identify with the
ethics of an organization, the more their sense of
identity will be threatened or harmed by the
transgressions of others (Den Nieuwenboer, 2008)
and the more likely it is that they will take action to
stop and correct the wrongdoing, whether through
confrontation, reporting to management, or calling a
hotline. Miceli et al. (1991) found that commitment to
the organization correlated with the propensity of
corporate auditors to report wrongdoing. Further-
more, if the wrongdoer is perceived to be committed
to the ethics of the organization, employees would be
more inclined to interpret the wrongdoing as a mis-
take and to believe that the wrongdoer would be
prepared to learn from it, making them more inclined
to approach the wrongdoer.
With regard to external whistleblowing, no
relationship with supportability is expected. Several
empirical studies show that the greater majority of
external whistleblowers considered themselves to
be very loyal employees and, therefore, first blew
the whistle internally (Miceli et al., 2008). The
dimension of supportability, however, does not
concern the extent to which employees are loyal
or committed to their organization, but the extent
to which they support the ethics of the organi-
zation. However, we may expect that the more
committed the employees are to the organization,
the more they also support the ethics of the
organization, and vice versa. Like the dimension of
clarity, supportability is in the CEV Model related
to internal organizational norms. External whis-
tleblowing, however, is primarily related to
identification with external norms. In that
sense, we do not expect a relationship between
external whistleblowing and organizational sup-
518 Muel Kaptein
Hypothesis 5:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of supportability is positively related to confron-
tation, reporting to management and calling a
hotline, negatively related to inaction, and unre-
lated to external whistleblowing.
Transparency is another dimension of the
CEV Model, and refers to the degree to which
wrongdoing and its consequences are visible to those
who can act upon it internally – wrongdoers as well
as colleagues, supervisors, managers, and subordi-
nates. As internal reporting is a means of improving
internal transparency (Miceli et al., 2008), we expect
that the more internal transparency there already is,
the less likely it is that employees will report inter-
nally. Employees will report wrongdoing if they
think that it will be effective; when it brings some-
thing to light that the recipient is unaware of. If
employees think that management is already aware
of wrongdoing, they will have less or no reason to
inform management. The same applies to the
wrongdoer: if the observer believes that the
wrongdoer is aware of their behavior and its effects,
the observer will have less or no reason to approach
the wrongdoer. And if employees think that others
too are aware of the wrongdoing – which is more
likely in more transparent organizations – and that is
has already been reported (cf., Dozier and Miceli,
1985), the less compelled they will feel to take
There are some mechanisms that might weaken
the expected negative relationship between trans-
parency and internal reporting. The higher the
perceived transparency, the more the observers will
believe that others are aware of their observation of
wrongdoing and, therefore, whether and how they
respond to the observed wrongdoing. The more
transparent the organization, and the more the
organization encourages a positive response, the
more the employees will be stimulated to take action
since their response is visible to others. Another
mechanism is that the more transparency there is, the
more visible the effects of wrongdoing are, thus the
more convincing evidence the observers have on
the basis of which to report the wrongdoing, and the
more likely it is that they will report (Miceli and
Near, 1985). A third mechanism is that the more
transparency there is, the more the employees will
feel obliged to report wrongdoing so as to preserve
existing levels of transparency.
Like inaction, we expect external whistleblowing
to be positively related to transparency. Exter-
nal whistleblowing usually takes place only after
employees have reported the wrongdoing internally
(Miceli and Near, 1992). So, the greater the internal
transparency of an organization, the greater the
visibility and awareness of wrongdoing, thus the
higher likelihood that employees will report exter-
Hypothesis 6:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of transparency is positively related to inaction
and external whistleblowing and negatively re-
lated to confrontation, reporting to management,
and calling a hotline.
The dimension of discussability is in the CEV Model
defined as the extent to which ethical issues, such
as ethical dilemmas and alleged wrongdoing, can
be discussed internally. The process of reporting
wrongdoing is a matter of communication (King,
1997). Reporting wrongdoing is to make things
discussable; to break through communication barri-
ers (Miceli et al., 2008). In organizations with a low
level of discussability, where a ‘‘code of silence’’
(Rothwell and Baldwin, 2007) prevails, employees
will think that dissidence and speaking up is unde-
sirable (Miceli and Near, 1984). In such organiza-
tions, the focus will be averted from resolving the
wrongdoing to retaliation against the messenger of
wrongdoing (Alford, 2007; Keenan, 1990; Miceli
and Near, 1994). If the possibility of retaliation ex-
ists, the willingness of employees to report wrong-
doing will decline due to the costs they may have to
bear as a result (Miceli et al., 2009). However, in
organizations where dialog and feedback are standard
practice (Heard and Miller, 2006) and where there is
empathy (Sims and Keenan, 1998), the willingness
of employees to report wrongdoing internally is
519From Inaction to External Whistleblowing
greater, because it preserves the prevailing norm of
openness (Blackburn, 1988; Graham, 1993) and is
appreciated by management and wrongdoers alike.
With regard to the use of a hotline, we do expect
discussability to have a negative relationship. The
higher the level of internal discussability within a
department, the less likely it is that employees will use
a hotline because the hotline serves as safety net for
wrongdoing that cannot be addressed among
employees within the department or through the
regular chain of command (Kaptein, 2002). We
also predict a negative relationship with external
whistleblowing. The greater the level of internal
discussability, the less likely the employees are to
report externally since they feel comfortable to ad-
dress wrongdoing internally.
Hypothesis 7:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of discussability is positively related to confron-
tation and reporting to management and nega-
tively related to inaction, calling a hotline, and
external whistleblowing.
The final dimension, sanctionability, is defined as the
extent to which employees believe that unethical
behavior will be punished and ethical behavior will be
rewarded. When wrongdoing is not punished, or
even rewarded, the implicit message is that wrong-
doing is acceptable or even desirable. The dimension
of sanctionability concerns in the CEV Model the
consequences not for the reporters of wrongdoing,
but for the wrongdoers. This dimension is relevant to
employees who observe wrongdoing and proceed to
assess the effectiveness of reporting it. According to
Near and Miceli (1995), correction and termination
of wrongdoing are important predictors of the
behavior of potential whistleblowers. Miceli and Near
(1984) found that convincing evidence that corrective
action would be taken appeared to be important to
nearly all whistleblowers. If reports are not taken
seriously, employees will conclude that it is futile to
report, which reduces the likelihood that they will
report at all (Miceli et al., 2008). A high level of
sanctionability, however, indicates that wrongdoing
is not tolerated, which stimulates employees to take
internal action. So we expect sanctionability to be
positively related to confrontation, reporting to
management, and calling a hotline. The higher the
level of sanctionability, the less reason the employees
have to refrain from taking action internally and to
report externally.
Hypothesis 8:Regarding the response of employees
who observe wrongdoing, the cultural dimension
of sanctionability is positively related to con-
frontation, reporting to management, and calling
a hotline and negatively related to inaction and
external whistleblowing.
Sample and procedure
Data were collected from the U.S. working popu-
lation. With the assistance of the panel database
company National Family Opinion, a sample was
compiled of U.S. adults working for organizations
that employ at least 200 people in fifteen selected
industries. The privately registered, prescreened
respondents to this blind survey received a nominal
financial reward for their participation. 10,395
individuals were contacted individually. The data
collection took place between July and September
2008, yielding 5065 completed questionnaires,
which is a response rate of 48.73.
Of the respondents, 44% were female. With re-
gard to job tenure, 6% had been working for less
than a year at their current organization, 10% be-
tween 1 and 2 years, 16% between 3 and 5 years,
16% between 6 and 10 years, and 51% for more than
10 years. Of the respondents, 14% were aged 18–34,
41% between 35 and 49, and 45% were 50 or older.
28% of the respondents worked for an organiza-
tion of 200–1000 employees, 15% of 1000–3000
employees, 9% of 3000–5000 employees, 11% of
5000–10,000 employees, and 38% of more than
10,000 employees. As for hierarchical level, 38% of
the respondents held a managerial position, 13%
worked as supervisor, 12% as mid-level manager, 3%
as senior manager or junior executive, and 2% as
senior executive or director. A wide range of sectors
520 Muel Kaptein
were represented: Consumer Markets (16%), Gov-
ernment and Public Sector (14%), Healthcare (9%),
Automotive (8%), Aerospace/Defense (7%), Elec-
tronics/Software (7%), Banking and Finance (7%),
Pharmaceuticals (7%), Media and Communications
(6%), Insurance (6%), Chemicals and Diversified
Industrials (5%), Power and Utilities (4%), Real
Estate/Construction (2%), Forestry/Mining (1%),
and Oil and Gas (1%). The respondents had the
following job functions: Manufacturing/Production
(14%), Operations/Service (13%), Technology (10%),
Sales/Marketing (9%), Research/Development/Engi-
neering (9%), General Management/Administration
(7%), Clerical/Support (7%), Finance/Accounting
(5%), Quality/Safety/Environmental (4%), Training/
Education (3%), Government/Regulatory Affairs
(3%), Purchasing/Procurement (2%), Legal/Compliance
(1%), Internal Audit/Risk Management (1%), Pub-
lic/Media Relations (1%), and other (11%).
In keeping with studies conducted by Ayers and
Kaplan (2005), King (2001), Tavakoli et al. (2003),
and Victor et al. (1993), respondents were requested
to indicate what they thought they would do if they
observed wrongdoing in their organization. The
questionnaire refrained from categorizing or giving
specific examples of wrongdoing. Although inten-
tions are not identical to actual behavior, as shown by
research of Mesmer-Magnus and Viswesvaran
(2005), and asking about behavior instead of inten-
tions has certain advantages (Miceli et al., 2008), this
study focused on intentions. The reason for this is
that it allows for a better alignment between
dependent and independent variables. Measuring
what employees think they would do if they ob-
served wrongdoing better reflects the current ethical
culture in their organization than measuring what
employees have done in the past when they observed
wrongdoing. Following the latter approach would
imply an assessment of the culture at the moment that
respondents observed the wrongdoing, which in-
volves the risk of memory distortion and post-deci-
sional justification (Miceli and Near, 1988).
The five types of responses regarding observed
wrongdoing, as described in this article, were op-
erationalized as ‘‘Try to resolve the matter directly’’,
‘‘Notify my supervisor or another manager’’, ‘‘Call
the ethics or compliance hotline’’, ‘‘Look the other
way or do nothing’’, and ‘‘Notify someone outside
the organization’’. For each reaction the Likert re-
sponse scale was used, ranging from ‘‘1 = strongly
disagree’’ to ‘‘5 = strongly agree’’, whereas the sixth
response alternative was ‘‘6 = not applicable’’,
which was treated as missing value in the analysis. So
respondents had multiple responses to select from. A
question was included to establish whether the
respondents’ organization had an ethics or compli-
ance hotline. In the event that a respondent indi-
cated that there was no hotline – which 42.56% did
– the response to call an ethics hotline was recoded
as ‘‘not applicable’’.
To measure the eight dimensions of the ethical
culture of organizations, the questionnaire ‘The
Integrity Thermometer’ was used.
Items were
measured using a 5-point Likert scale ranging from
‘‘1 = strongly disagree’’ to ‘‘5 = strongly agree’’.
The Cronbach’s alphas of all dimensions, as depicted
on the diagonal of Table I, were above Nunally’s
(1978) suggested minimum of 0.70.
Control variables
Five control variables were entered into the analyses:
gender (two categories), age (eight categories), tenure
(five categories), and hierarchical level (six categories)
of respondents as well as the size of their organization
(five categories). Miceli and Near (1988) found that
whistleblowing was more likely among male
observers since men have higher self-esteem, a
stronger internal locus of control, and display more
initiative. Research by Miceli and Near (1988)
demonstrates a positive relationship between tenure
and whistleblowing as younger ambitious employees
in particular tend to be more focused on advancing
their career in the organization. Regarding the fourth
control variable, the hierarchical level of the
respondent, Keenan (2002) found that senior man-
agers were more likely to blow the whistle on
wrongdoing than local managers. The reason for this
is that senior managers have greater discretionary
powers and are under less pressure to conform and
thus feel more comfortable to blow the whistle. The
size of the organization may also be relevant. Near
521From Inaction to External Whistleblowing
Means, standard deviations, (Pearson) correlations, and scale reliabilities for dependent and independent variables
Variables MSD123456789101112131415161718
1. Inaction 1.93 0.94
2. Confrontation 3.35 1.11 -0.07
3. Reporting
4.00 0.85 -0.41 0.19
4. Calling ethics
3.31 1.08 -0.20 0.05 0.34
5. External
2.21 1.02 0.34 0.10 -0.13 0.12
6. Gender 1.56 0.50 0.02 0.09 -0.06 -0.08 -0.00
7. Age 46.47 9.09 -0.10 -0.02 0.03 0.03 -0.06 0.11
8. Tenure 3.96 1.28 -0.01 -0.00 -0.03 0.01 0.00 0.06 0.31
9. Hierarchical
1.61 1.01 -0.13 0.22 0.14 0.07 -0.06 0.10 0.10 0.05
10. Size 3.77 1.31 -0.04 -0.02 0.03 0.17 -0.04 0.05 0.01 0.12 -0.02
11. Clarity 4.10 0.79 -0.27 0.21 0.36 0.26 -0.18 -0.04 0.06 0.04 0.18 0.10 (0.89)
12. Congruency
local management
3.92 0.89 -0.25 0.15 0.44 0.22 -0.23 -0.04 0.01 -0.06 0.13 0.06 0.54 (0.91)
13. Congruency
senior management
3.90 0.94 -0.24 0.12 0.39 0.28 -0.23 -0.06 0.02 -0.03 0.16 0.03 0.57 0.68 (0.89)
14. Feasibility 3.47 0.58 -0.15 0.11 0.29 0.19 -0.11 -0.04 -0.02 -0.05 0.06 -0.00 0.35 0.50 0.47 (0.84)
15. Supportability 3.91 0.82 -0.27 0.18 0.39 0.25 -0.17 -0.03 0.05 -0.02 0.15 0.09 0.49 0.68 0.55 0.50 (0.90)
16. Transparency 3.53 0.82 -0.17 0.13 0.35 0.23 -0.13 -0.04 -0.00 -0.05 0.14 0.02 0.43 0.63 0.56 0.44 0.65 (0.82)
17. Discussability 3.74 0.80 -0.26 0.20 0.47 0.24 -0.21 -0.02 -0.01 -0.05 0.15 0.04 0.51 0.79 0.65 0.50 0.72 0.67 (0.79)
18. Sanctionability 3.68 0.84 -0.27 0.18 0.47 0.30 -0.21 -0.01 -0.01 -0.06 0.18 0.06 0.53 0.78 0.71 0.52 0.70 0.77 0.80 (0.86)
Note: Estimated reliability coefficients are presented in parentheses on the diagonal. N= 5056. r|0.03| p<0.05; r|0.05| p<0.01.
522 Muel Kaptein
and Miceli (1985) argue that larger organizations are
less dependent upon individual employees and are,
therefore, more likely to retaliate, which has a neg-
ative impact on the probability of internal whistle-
blowing. At the same time, it is easier to remain
anonymous in bigger organizations, which has a
positive impact on the likelihood of whistleblowing.
Table Idepicts the means, standard deviations, and
intercorrelations of all research variables. The
bivariate correlations between the dependent
and independent variables ranged from r= 0.10
(p<0.01) for feasibility and resolving directly to
r= 0.47 (p<0.01) for discussability and reporting
to management as well as sanctionability and
reporting to management.
The hypotheses were tested using structural
equation modeling. The covariance matrix was
analyzed via the maximum likelihood estimation
with LISREL 8.8. The hypothesized structural
model fits the data well (v
(10) = 1832.50;
CFI = 0.98; GFI = 0.97, IFI = 0.98; NFI = 0.98;
SRMR = 0.035). Tables II and III depict the results.
As expected clarity was positively related to
confrontation, reporting to management, and calling
a hotline, and negatively related to inaction. Con-
trary to expectations, clarity was also negatively
related to external whistleblowing.
As expected, a positive relationship was found
between congruency of local management and
reporting to management while the relationship with
calling a hotline and external whistleblowing was
negative. Also as expected, no relationship was found
with inaction. Contrary to expectations, a negative,
instead of positive, relationship was found with con-
Regarding the cultural dimension of congruency
of senior management, as expected, a positive rela-
tionship was found with calling a hotline, a negative
relationship with external whistleblowing, and no
relationship with inaction. Contrary to expectations,
congruency of senior management was negatively
related to confrontation and not related to reporting
to management.
As for the cultural dimension of feasibility, no
relationship with the five responses was expected.
The results showed that for three responses there was
no relationship. There was a positive relationship
with calling a hotline and external whistleblowing.
Results of structural equation modeling
Variables Inaction Confrontation Reporting
to management
Control variables
Gender 0.05* 0.19** -0.09** -0.14** 0.01
Age -0.01* -0.01** 0.00* 0.00* -0.01**
Tenure 0.00 0.01 -0.01 -0.00 0.00
Hierarchical level -0.05* 0.18** 0.04* -0.00 -0.00
Size -0.02* -0.06* 0.00 0.13** -0.03*
Independent variables
Clarity -0.18** 0.22** 0.11* 0.16** -0.06*
Congruency local management 0.03 -0.08* 0.07* -0.14** -0.11*
Congruency senior management 0.01 -0.09* -0.02 0.11** -0.10**
Feasibility -0.01 0.04 0.04 0.10* 0.08*
Supportability -0.16** 0.09* 0.06* 0.12* -0.00
Transparency 0.17** -0.06* -0.06* -0.01 0.15**
Discussability -0.07* 0.21** 0.19** -0.06* -0.08*
Sanctionability -0.21** 0.06* 0.22** 0.26** -0.13**
*p<0.05, **p<0.01.
523From Inaction to External Whistleblowing
The cultural dimension of supportability was, as
expected, positively related to confrontation, report-
ing to management, and calling a hotline, as well as
negatively related to inaction and unrelated to
external whistleblowing.
The dimension of transparency was, as expected,
positively related to inaction and external whistle-
blowing and negatively related to confrontation and
reporting to management. No negative relationship
was found for calling a hotline.
As expected, for the cultural dimension of dis-
cussability, we found a positive relationship with
confrontation and reporting to management, as well
as a negative relationship with inaction and external
whistleblowing. Whereas we expected no relation-
ship with calling a hotline, a negative relationship
was found.
Regarding the final hypothesis for sanctionability,
positive relationships were indeed found for con-
frontation, reporting to management, and calling a
hotline, as well as a negative relationship with
inaction and external whistleblowing.
This study has examined the influence of the ethical
culture of organizations on the intended responses of
employees to observed wrongdoing. We have
examined the relationship between five types of
responses and eight dimensions of ethical culture. A
large sample of U.S. employees was used. The results
of the study showed that three internal actions –
confrontation, reporting to management, and calling
an ethics hotline – were positively related to at least
four of the eight dimensions of ethical culture. The
two other responses – inaction and external whis-
tleblowing – were negatively related to at least four
of the eight dimensions of ethical culture.
The cultural dimensions of clarity, supportability,
and sanctionability were all positively related to the
three internal actions. These three dimensions were
also negatively related to inaction and, except for
supportability, also to external whistleblowing.
Congruency of local management was positively
related only to reporting to management and nega-
tively related to confrontation, calling an ethics
hotline, and external whistleblowing. Congruency
of senior management was positively related only to
calling an ethics hotline, and negatively related to
confrontation and external whistleblowing. Feasi-
bility was unexpectedly positively related to calling
an ethics hotline and external whistleblowing. As
expected, transparency was negatively related to
confrontation and reporting to management, and
positively related to inaction and external whistle-
The findings of this study corroborate most of the
hypotheses advanced in this study. Hypothesis 5
(supportability), 7 (discussability), and 8 (sanction-
ability) were fully supported. Regarding Hypothesis
Overview of hypothesized and found relationships
Variables Inaction Confrontation Reporting
to management
ethics hotline
Clarity -/-+/+ +/+ +/+ 0/-
Congruency local
0/0 +/-+/+ -/--/-
Congruency se-
nior management
0/0 +/-+/0 +/+ -/-
Feasibility 0/0 0/0 0/0 /+ 0/+
Supportability -/-+/+ +/+ +/+ 0/0
Transparency +/+ -/--/--/0 +/+
Discussability -/-+/+ +/+ -/--/-
Sanctionability -/-+/+ +/+ +/+ -/-
Note: Hypothesized/Found; -= negative relationship; + = positive relationship; 0 = neutral or no relationship.
524 Muel Kaptein
1, clarity was negatively related to external whistle-
blowing, whereas we expected no relationship. One
possible explanation for this finding is that as clarity
increases, employees are more inclined to report
internally, and consequently, less likely report
externally. Clarity is indicative of the self-corrective
capacity of an organization and when a high level of
clarity exists employees are bound to feel more
comfortable to report internally. For Hypothesis 2
and 3 we found that both congruency of local and
senior management are not positively, but nega-
tively, related to confrontation. Contrary to expec-
tations, role modeling of management appears to
lead to more reporting to management and less
confrontation by employees. This might be because
employees who regard their manager as a good role
model rely more on the intervention of their man-
ager and consequently less on their own direct
interventions to stop wrongdoing. They might re-
gard the intervention of their manager as more
effective or as a way to pass on the responsibility to
their manager. It was also found that congruency of
senior management was not related to reporting to
management. As this article presented arguments
that suggest a positive relationship, this finding might
be explained by some limitations in the methodol-
ogy employed, which is discussed in the next sec-
tion. Regarding Hypothesis 4, we found that
feasibility was positively related to calling an ethics
hotline and external whistleblowing, which is quite
surprising and, at least in view of the theories and
arguments presented in this article, also difficult to
explain. Regarding Hypothesis 6, we found that
transparency was not related to calling an ethics
hotline. Apparently, the presented arguments for
reporting to management and approaching the
wrongdoer(s) – i.e., the more transparency, the more
aware managers are about wrongdoing that takes
place, and the less meaningful it is for employees to
report to them – do not apply to calling an ethics
hotline. A possible explanation for this is that since
employees do not know who the recipients of a
report to an ethics hotline may be – an ethics hotline
is more anonymous – it is difficult to assess what the
recipients already know. The current level of
transparency of the organization could therefore be
irrelevant to employees’ decision to report or refrain
from reporting via an ethics hotline. Future research
could examine the explanation for this finding in
greater depth.
The contribution of this article lies in its dem-
onstration of the relevance of the ethical culture of
organizations in explaining and predicting employ-
ees’ intended response to observed wrongdoing.
This article also demonstrates that the dimensions of
ethical culture are not all positively related to a po-
sitive response (internal action) and not all negatively
related to a negative response (inaction and external
whistleblowing) from employees who observe
wrongdoing. For example, transparency, which is a
desirable organizational virtue for discouraging
wrongdoing, was negatively related to the positive
response of confrontation and reporting to man-
agement, and positively related to the negative re-
sponse of inaction and external whistleblowing. One
cultural dimension, namely feasibility, was related to
only two potential responses. Ray (2006) regards
whistleblowing as an ethical failure at the organiza-
tional level. Based on the current study we can
confirm that external whistleblowing generally
reflects a weakness in the ethical culture of the
organization, except for transparency. Transparency
was positively related to external whistleblowing,
whereas supportability was not related to external
whistleblowing. To consider inaction of employees
as a failure of the ethical culture of organizations is
generally also correct: only transparency was posi-
tively related. However, internal whistleblowing
through calling an ethics hotline was positively
related to five of the eight dimensions of ethical
culture and negatively related to congruency of local
management and discussability. Contrary to the
finding of Miceli and Near (1985), the present study
suggests that inactive observers are confronted with a
different organizational context than internal whis-
tleblowers. Whereas Near and Miceli (1996) suggest
that internal and external whistleblowing are related
phenomena, we can confirm the finding of Dworkin
and Baucus (1998) that we limit our understanding
of the contextual stimuli for whistleblowing when
we treat internal and external whistleblowing as one
phenomenon. But we should also incorporate,
which is another contribution of this study, inaction
and confrontation to improve our understanding of
the ways in which employees respond to observed
525From Inaction to External Whistleblowing
Research implications and limitations
Regarding the operationalization of the independent
variables, this study has certain limitations which
have implications for future research. The objective
of this study was to enhance our understanding of
the influence of ethical culture on the response of
employees who observe wrongdoing. A general
model for the ethical culture of organizations was
used to explain and predict wrongdoing. In future
research, a complementary model could be devel-
oped for the ethical culture of organizations, which
is more tailored to responses to observed wrongdo-
ing. In such a model, the dimensions of the CEV
Model could be worked out in more detail. With
regard to clarity, for example, it could specify
whether employees have clarity on how they should
respond to wrongdoing; regarding congruency of
managers, what role model behavior they display in
response to wrongdoing observed; regarding sup-
portability, the extent to which employees are
committed to, for example, the whistleblowing
policy of the organization; regarding feasibility, the
availability of resources and different channels to
report; regarding transparency, the extent to which
employees are informed on how a report of wrong-
doing is handled; regarding discussability, the extent
to which receivers of reports of wrongdoing listen
carefully and pose the right questions to obtain a
thorough understanding of the reported wrongdo-
ing; regarding sanctionability, whether reports of
wrongdoing are encouraged or appreciated. For a
better understanding of the relationship between
ethical culture and employee responses to observed
wrongdoing, future research could also draw a dis-
tinction between the ethical culture of the imme-
diate work environment of respondents and the
broader organizational culture. In this study we
focused mainly on the ethical culture of the work unit.
It is conceivable that in seeking an explanation for the
responses that fall beyond the work unit, such as
reporting to senior management and calling an ethics
hotline, the broader context increases in significance.
Likewise, it is conceivable that the ethical culture of
the work unit increases in significance in the event
that the wrongdoing and response, such as reporting
to the supervisor, occur within the work unit.
Regarding the operationalization of the depen-
dent variables, this study has certain limitations,
which also have implications for future research.
This study focused on five types of responses of
employees to observed wrongdoing. Future research
could include a wider range of responses, such as
reporting to different staff departments like HR,
Legal, and Internal Audit, different levels of man-
agement, types of hotlines, and different exter-
nal persons and organizations. The exit option
(Hirschman, 1970) could also be included as
employees may respond to observed wrongdoing by
transferring or leaving the organization. This study
examined the propensity of employees to respond in
a certain manner to observed wrongdoing, which
cannot be generalized to their actual behavior
because intentions and behavior are separated
by ‘‘extensive psychological, motivational and
implementation processes’’ (Mesmer-Magnus and
Viswesvaran, 2005, p. 279). Following Miceli and
Near (2002), future research on the influence of eth-
ical culture could also adopt a retrospective approach
and examine the actual response of employees in the
face of observed wrongdoing. In that case, the chal-
lenge will be to adequately deal with potential prob-
lems of memory distortion and post-decisional
justification (Miceli and Near, 1988) as discussed
above. As explained above, wrongdoing was used in
the study as a singular construct. An interesting
direction for future research in this regard is how
different types of wrongdoing – by, for example, the
seriousness of the wrongdoing, the interests at stake,
the hierarchical position of the wrongdoer(s), and the
number of wrongdoers involved – influence the rela-
tionship between ethical culture and the (intended)
response of employees to observed wrongdoing.
Another limitation of this study concerns the data
that were used. Valid and reliable data are difficult to
collect when studying a sensitive topic like
responding to wrongdoing (Near and Miceli, 1995).
Although self-reported data may be flawed, it is
widely used in studies on whistleblowing (cf., Miceli
et al., 2008) because it is important that data are
collected anonymously, which cannot be corrobo-
rated by a party other than the one that observes
wrongdoing (Miceli and Near, 1992). Given the
cross-sectional data we used in this study, the cause
and effect relationships cannot be established conclu-
sively. For longitudinal research, employees would
be required to identify themselves, which is likely
to yield a low or biased response rate (Miceli and
526 Muel Kaptein
Near, 1994). While this study focused on the
influence of culture on employee responses to
observed wrongdoing, the responses of employees
may very well also influence the ethical culture. For
example, reporting wrongdoing could strengthen
the commitment of employees to the organization
(Miceli et al., 2009). Reporting could also increase
transparency (Miceli et al., 2008) and lead to sanc-
tions (Miceli et al. 2008) thereby reinforcing
or changing perceptions of the existing culture
(cf., Miceli and Near, 1985). Future research could
also focus on how the response of recipients to
reports of wrongdoing influence employee percep-
tions of the ethical culture of organizations. An
interesting research question in this regard is how eth-
ical culture relates to the number of actual reports.
The quality of ethical culture is negatively related to
the frequency of wrongdoing (Kaptein, 2010), but as
this study shows, a healthy ethical culture generally
results in a greater willingness to report wrongdoing.
The question is, therefore, what the net effect is.
Regarding reports of workplace injuries and illness
in the construction industry, Probst, Brubaker and
Barsotti (2008) already found that organizations with
a poor safety climate had significantly higher rates of
underreporting to authorities but also more injuries
and illness leading to a similar number of reports to
authorities than organizations with a positive cli-
mate. An important question is what the influence of
the cultural dimension of transparency is because
transparency increases the likelihood that wrong-
doing is observed. At the same time transparency
decreases the likelihood that wrongdoing occurs
and, as found in this study, the likelihood that
wrongdoing is resolved directly or reported to
Managerial implications
Given the importance of correcting wrongdoing,
organizations should create a culture that encour-
ages employees who observe wrongdoing to take
appropriate action. Creating the infrastructure for
internal whistleblowing via an ethics hotline or
helpline is one way to encourage reporting. How-
ever, other studies tend to overlook responses like
direct resolution of wrongdoing or reporting
wrongdoing to a supervisor as a means to improve
the self-correcting capacity of the organization.
According to leading scholars in the field of whis-
tleblowing, Miceli et al. (2008), most employees do
not regard open door policies as effective and they
have not been successfully employed to encourage
internal reporting of wrongdoing. This study shows
that the majority, 81% of employees, has the pro-
pensity to report to their manager, 52% are oriented
toward direct resolution, while 44% are inclined to
call an ethics hotline. Adopting an integrated ap-
proach to the different routes available for reporting
wrongdoing can contribute significantly to manag-
ing and enhancing the self-correcting capacity of the
As illustrated in this study, the ethical culture of an
organization is important in encouraging employees
to correct observed wrongdoing. Four dimensions
are especially relevant in encouraging employees to
take positive action such as intervening directly,
reporting to management and calling an ethics hot-
line, instead of refraining to take action or blowing
the whistle externally. These four dimensions are
clarity, supportability, discussability, and sanction-
ability. Encouraging a positive response to observed
wrongdoing among employees requires developing a
culture where standards for ethical behavior are clear,
employees are committed to the ethics of organiza-
tion, where ethical dilemmas and issues are open for
discussion, and where transgressors are punished.
However, improving transparency may lead to a
decline in wrongdoing, but also to a decline in the
propensity to report wrongdoing internally. The
same applies to role modeling of local management.
Managers should realize that better role model
behavior may lead to a lower propensity of
employees to approach wrongdoers directly and to
call the ethics hotline. To stimulate the right
response, managers should be clear on how employ-
ees should respond when they observe wrongdoing. If
a better ethical culture leads to less wrongdoing and a
higher propensity to report to management, an
interesting question for management is what the
combined effect of these two factors is on the number
of reports they receive. In this study we have found
that more reports of wrongdoing are not necessarily
negative. On the contrary, it could even be a positive
reflection of the ethical culture of an organization.
527From Inaction to External Whistleblowing
Next to ethical culture, ethical climate is another
component of the informal organizational context. Ethi-
cal climate concerns the perception of employees of
what constitutes unethical and ethical behavior in the
organization (Victor and Cullen, 1988). Some studies
have been conducted on the relationship between ethi-
cal climate and whistleblowing. Rothwell and Baldwin
(2007) did research among police agencies in the State
of Georgia on ethical climates and whistleblowing.
Chung et al. (2004) found that auditors are more likely
to blow the whistle in a ‘‘principle-based’’ organiza-
tional climate compared to a ‘‘rule-based’’ organiza-
tional climate.
Version 2 of the Integrity Thermometer was used in
this study. Version 1 is the questionnaire as developed
and presented by Kaptein (1998) and Kaptein and Van
Dalen (2000). Version 3 is the questionnaire as further
developed and tested by Kaptein (2008b), which was
not available at the time the data for the current study
was collected. Version 2 (see, for example, Kaptein and
Avelino (2005)) consists of 32 items. The difference be-
tween Version 1 and Version 2 is, for example, that
Version 1 relates the dimensions of ethical culture to
three key dilemmas organizations face (the dilemmas of
the entangled hands, many hands and dirty hands)
whereas Version 2 relates the dimensions of ethical cul-
ture to (un)ethical behavior in general.
Alford, C. F.: 2007, ‘Whistle-Blowers Narratives: The
Experience of Choiceless Choice’, Social Research 74,
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530 Muel Kaptein

Supplementary resources (2)

... For example, a study with 341 working groups showed that at least six virtues are significantly related to the frequency of unethical behavior observed (Kaptein, 2011b). Others have shown a significant relationship between the virtues of culture and reports of unethical behavior (Kaptein, 2011a), occupational well-being (Huhtala et al., 2011(Huhtala et al., , 2016, absence/absence due to illness (Kangas et al., 2017), the intention of rotation (Kangas et al., 2016), organizational citizenship behavior (Ruiz-Palomino & Martínez-Cañas, 2014), work engagement and burnout (Huhtala et al., 2015), among others. ...
... For example, the study carried out by Kaptein (2011b) with 341 working groups showed that at least six virtues are significantly related to observed unethical behavior frequency. Another study, also carried out by Kaptein (2011a), showed a significant relationship between the virtues of culture and reports of unethical behavior. Cabana and Kaptein (2019) also found that the levels of team ethical culture (TEC) were related to observed unethical behavior, such that the cluster with a higher TEC showed a lower level of observed unethical behavior, a lower ratio of observed unethical behavior per employee, and a higher intention to report unethical behavior. ...
... Delmas (2015: 78) already acknowledged that whistleblowers could also be "outsiders without privileged access". Bystander effects are well-known problems for whistleblowing (or the lack of it, see Gao et al. 2015, Kaptein 2011) and the value of whistleblowing reports based on secondary information has also been documented (Stubben and Welch 2019, although admittedly the authors could not have known about this research). And take those four conditions that the authors put forward for a whistleblowing duty. ...
This article uses two recent books on whistleblowing authored by political philosophers, to suggest that what political philosophy can contribute to the whistleblowing debate are notions of public interest that can help to enable and delineate responsibilities and protection of different actors. Whilst it is acknowledged that these recent works on whistleblowing offer a welcome articulation of the business ethics scholarship into that of political philosophy, it fails to deliver on its potential contribution. The argumentation proceeds along three objections, (1) use of bad cases, (2) lack of new insights, and (3) conservative positioning.
... In the context of whistleblowing, an ethical climate has a significant impact on employees' intentions to report frauds (Mesmer-Magnus and Viswesvaran, 2005;Kaptein, 2011). It also is critically important to ensure effective whistleblowing (Near and Miceli, 1985;Gao et al., 2015). ...
Full-text available
Purpose This paper aims to reframe the whistleblowing process by examining the individual and situational factors that have been overlooked by prior studies. Ethical climate, public service motivation (PSM), organisation identification and psychological safety are inquired. Design/methodology/approach The present study sample was drawn from a population of Indonesian local governments located in east Java, Indonesia. Particularly, self-administered questionnaires were hand-distributed to the employees in the four local governments. Of 2,169 questionnaires distributed to the employees, 1,687 questionnaires were returned to the researcher. However, the researcher removed 33 returned questionnaires because of poor data quality, such as incomplete answers. Thus, only 1,654 questionnaires were analysed in this study. Findings The findings support the idea of an ethical climate that can encourage the individual to blow the whistle. However, its effect is indirect. The predictive power of ethical climate on the individual’s whistleblowing intentions depends on the meditating roles of PSM, psychological safety and organisation identification. Interestingly, the mediating effects of PSM, psychological safety and organisation identification are extremely acknowledged when individuals have an opportunity to choose internal or external disclosures. Originality/value This study produces a different approach to understanding people’s intentions to report any wrongdoings. This study is dissimilar from prior studies in terms of the theoretical paradigm and research design. Previous studies mostly used students as their experiments. In contrast, the current study recruited employees who work in local governments. This situation fundamentally affects the understanding of the impact of an ethical climate on the individual intention to blow the whistle.
... The consequences of whistleblowing can be huge, with potential effects not only on the whistleblowers themselves, but also on the audit firms and the auditing profession. External whistleblowing may lead to public embarrassment, government scrutiny, hefty fines and litigation (Kaptein, 2011). However, potential whistleblowers may be more likely to choose external whistleblowing when internal whistleblowing fails to stop and rectify the wrongdoing. ...
Purpose This study aims to examine the roles of perceived organisational support (POS), attitude and self-efficacy in understanding the external whistleblowing intentions among senior auditors through the lens of stimulus–organism–response theory. Design/methodology/approach This study uses data from 119 senior auditors in audit firms in Malaysia. POS is predicted to be a stimulus factor from the external environment that affects the attitude and self-efficacy (organism) of the auditors and reassures them to act to whistleblow (response). Findings POS has a significant impact on self-efficacy and on attitude. Self-efficacy is shown as a significant mediator between POS and external whistleblowing intentions, but there is no statistical support for self-efficacy having a mediating effect on the relationship between the attitude of senior auditors and external whistleblowing intentions. Practical implications The findings can assist accounting professional bodies in understanding the psychological behaviours of auditors that contribute to their intention to shine a light on wrongdoing in audit firms and in providing a better insight into the critical factors that could influence auditors to whistleblow. Originality/value This study is among the earliest to investigate the application of stimulus–organism–response theory in whistleblowing, and hence it illustrates how the theory can be applied in studies on the ethical behaviours of actors in professional careers. The findings shed light on the role of self-efficacy as a significant mediator between POS and external whistleblowing intentions.
Within the last years, whistleblowing has received considerable attention, as calls for ethical behavior in the workplace have grown louder and more forceful. Despite this fact, research has shown that individuals who blow the whistle are often frowned upon and treated poorly. In this context, while social media allows for offering support to the whistleblower, people may also hide behind online anonymity and engage in unethical behavior towards the whistleblower. Previous research already tried to explain unethical behavior on social media by linking moral receptors with moral disengagement in the context of unethical behavior. We built upon this approach in developing a set of propositions linking the moral receptors “harm/care”, “fairness/reciprocity”, “in-group/loyalty”, “authority/respect”, and “purity/sanctity” with moral disengagement in order to explain unethical behavior against whistleblowers on social media. Furthermore, we discuss some contextual boundary conditions that may aggravate the negative behavior towards whistleblowers.
Im Fall Wirecard ging viel Vertrauen in das Kontrollsystem und die beteiligten Organisationen verloren. Aufsichtsbehörden und Wirtschaftsprüfungsgesellschaften haben ihre wichtige gesellschaftliche Funktion als Vertrauensintermediäre zwischen den Unternehmen auf der einen Seite und den Anlegern und Kunden auf der anderen Seite aufs Spiel gesetzt. Sie haben nämlich selbst an Vertrauen eingebüßt und sich damit als Vertrauensintermediäre diskreditiert. Die langfristigen gesellschaftlichen Konsequenzen dieses Vertrauensverlustes sind noch nicht absehbar. Der eigene Vertrauensverlust beruht wiederum auf einem mangelnden Vertrauen in sogenannte unternehmensexterne Whistleblower. Deren Hinweise wurden nicht nur ignoriert, sondern dezidiert als vertrauensunwürdig markiert. Wie der Fall Wirecard zeigt, geht es im Zusammenhang mit Fehlverhalten von und in Organisationen um komplexe Verflechtungen von Vertrauensbeziehungen. Der folgende Beitrag möchte zur Aufklärung dieser Verflechtungen aus organisationstheoretischer Sicht beitragen. Dabei verdeutlichen wir, dass die Vertrauensprobleme im Zuge des Wirecard Skandals vor allem auf eine mangelnde Wahrnehmung der Integrität der beteiligten Organisationen und deren Einschätzung der Integrität von Whistleblowern zurückzuführen sind. So werden eigentlich integre Whistleblower als nicht integer wahrgenommen und damit letztlich die eigene Integrität als kontrollierende Organisation infrage gestellt. Da derartige Integritätsprobleme nur zum Teil durch entsprechende Verfahren zum Umgang mit Whistleblowern aufgelöst werden können, halten wir organisationskulturelle Veränderungen für dringend geboten. Nicht zuletzt dadurch kann die konstruktive Funktion von Whistleblowing stärker in den „Köpfen“ der Mitglieder aller beteiligten Organisationen verankert werden.
Purpose This paper aims to discuss the importance of an effective internal whistleblowing system in building a more ethical organizational climate. Design/methodology/approach This study draws on the literature to make recommendations for organizations, managers and boards of directors regarding implementing an effective whistleblowing process. Findings This paper offers practical information on what constitutes an appropriate level of preparedness and responsiveness. Organizations can reinforce their internal ethics by encouraging whistleblowers to report complaints internally. An effective whistleblowing process depends on the organization’s desire to build an ethical climate and its awareness of the power of whistleblowing as an ethical tool. Originality/value This study will help managers and other professionals to create and maintain an ethical climate by implementing an effective whistleblowing process. The discussion in this paper is important for any type of organization concerned with empowering whistleblowers and the whistleblowing process.
The current study examines how an ethical organizational culture relates with employee advocacy behaviors through the mediating role of transparent communication and perceived relationship investment. Through a quantitative survey with 350 employees who work for a variety of organizations, the study’s results indicated that an ethical organizational culture plays a critical role in nurturing transparent communication and perceived relationship investment, which in turn, cultivate employee advocacy behaviors. Additionally, the impact of transparent communication on employee advocacy is partially mediated by perceived relationship investment. Relevant theoretical and practical implications are discussed.
Full-text available
Generally, public bureaucracies are typically ill-disposed to promote whistleblowing and whistleblower protection. In developing countries, however, this takes an additional challenge. Public administration in these contexts operates in a largely clientelistic political marketplace. It is mainly characterised by bureaucratic secrecy and well-entrenched networks of gatekeepers/custodians of the deep-sited group interests. Also, public institutions employees are not as easily expendable as private sector employees. Instead, they are often somewhat cushioned by a plethora of laws and intricate and hierarchical disciplinary processes. Besides, they are protected by powerful informal networks within and outside public administration and more importantly, public institutions feature typical developing and democratising challenges. These include personalised loyalty, loosely regulated institutional environments, fluid policy-ownership, extreme disorganisation, institutionalisation deficits (limited statehood conditions), dishonesty, haphazardness, amateurism, and autocratic and self-serving leadership traditions. Under such conditions, conflict of interest is elusive, corruption is less punitive, whistleblowers are despised, and whistleblower protection legislation is implemented in a reactionary manner. This essay dissects these issues within the broader whistleblowing and whistleblower protection and functional governance literature giving nuanced illustrations in India, Bangladesh, Brazil, Ghana and South Africa. Conclusions provide an overview of improving whistleblower protection in developing countries, underpinned mainly in the realisation of democratic public administration.
Full-text available
Based on four interlocking empirical studies, this paper initially validates and refines the Corporate Ethical Virtues Model which formulates normative criteria for the ethical culture of organizations. The findings of an exploratory factor analysis provide support for the existence of eight unidimensional subscales: clarity, congruency of supervisors, congruency of management, feasibility, supportability, transparency, discussability, and sanctionability. The findings of a confirmatory factor analysis show that the overall fit of the model is quite high. Evidence of convergent and discriminant validity is also found. The resulting 58-item self-reporting questionnaire is a useful tool that can be used in future research and by managers in assessing the ethical culture of their organization.
Full-text available
• Why is ethics important to organizations? • What are the characteristics of an ethical organization? • How can we audit the ethics of an organization? • What measures and activities stimulate the ethical development of organizations? This book addresses these questions. It is easier to say that ethics is necessary than to tell how to organize ethics. This book provides a fundamental and coherent vision on how ethics can be organized in a focused way. This study examines the assumptions for organizing ethics, the pitfalls and phases of such a process, the parts of an ethics audit and the great variety of measures. The methods and insights illustrated in this book are based partially on practical research. One of these methods, the Ethics Thermometer, was based on more than 150 interviews at various organizations. The Ethics Thermometer has been applied in a great variety of profit and not-for-profit organizations in order to measure an organization's perceived context, conduct and consequences. This book will be important to scholars in the field of business ethics, as well as to managers and practitioners. For scholars, this study provides general knowledge about auditing and developing the ethics of an organization. A summary is given of the criteria by which the ethical content of an organization can be measured. For managers and practitioners, this study provides concrete suggestions for safeguarding and improving ethics within their organizations.
This cross-level field study, involving 187 employees from 35 groups in 20 organizations, examined how individuals' antisocial behaviors at work are shaped by the antisocial behavior of their coworkers. We found a positive relationship between the level of antisocial behavior exhibited by an individual and that exhibited by his or her coworkers. We also found that a number of factors moderated this relationship. Finally, we found that dissatisfaction with coworkers was higher when individuals engaged in less antisocial behavior than their coworkers.
We examine the penalties imposed on the 585 firms targeted by SEC enforcement actions for financial misrepresentation from 1978-2002, which we track through November 15, 2005. The penalties imposed on firms through the legal system average only $23.5 million per firm. The penalties imposed by the market, in contrast, are huge. Our point estimate of the reputational penalty-which we define as the expected loss in the present value of future cash flows due to lower sales and higher contracting and financing costs - is over 7.5 times the sum of all penalties imposed through the legal and regulatory system. For each dollar that a firm misleadingly inflates its market value, on average, it loses this dollar when its misconduct is revealed, plus an additional $3.08. Of this additional loss, $0.36 is due to expected legal penalties and $2.71 is due to lost reputation. In firms that survive the enforcement process, lost reputation is even greater at $3.83. In the cross section, the reputation loss is positively related to measures of the firm's reliance on implicit contracts. This evidence belies a widespread belief that financial misrepresentation is disciplined lightly. To the contrary, reputation losses impose substantial penalties for cooking the books. Copyright 2008, Michael G. Foster School of Business, University of Washington, Seattle, WA 98195.