ETHICS & WHISTLE-BLOWING

Ethics & Whistle-Blowing

Abstract

Although whistleblowers are often betrayed as courageous individuals, even heroes, worthy of respect, the act of whistleblowing can be viewed as a back stabbing act of disloyalty. The action of the whistleblowers could bankrupt a company and cause much harm to the whistleblowers colleagues. Numerous federal and state laws have been enacted to encourage whistleblowing. Whistleblowers are in some cases receiving huge financial rewards for coming forward. Some may argue and that some whistleblowers have provided a great service to society but is it ethical for an individual to provide company confidential information to an external party, if that disclosed information would lead to the correction of a social wrong?

Is it ethical for an individual to provide company confidential information to an external party, if that disclosed information would lead to the correction of a social wrong?

I will review this question from three ethical frameworks: utilitarian, eastern thoughts and ethics and virtual ethics. I will also review the question from my own on professional ethical framework.

Ethics & Whistle-Blowing

Statement

Description of issue

Ethical breakdowns in corporate America hurt not only the USA economy but also harm the integrity of businesses in the eyes of their many stakeholders. Unfortunately, there are many recent examples of such malfeasance: Enron, WorldCom, Global Crossing, Adelphia, and even the International Olympic Committee to name just a few of the most prominent (Calvert, 2002).

Perhaps the most infamous case is that of Enron. Sadly, Enron was regarded as one of the most promising companies in USA before its collapse. It was even rated the most innovative large company in America from 1996 to 2001 (Lainson, 2001). As of December 31, 2000, Enron's stock was priced at $83.13, and its market capitalization exceeded $60 billion, 70 times earnings and six times book value, an indication of the stock market's high expectations about its future prospects. Yet within a year, Enron's image was in tatters and its stock price had plummeted nearly to zero (Healy and Palepu, 2003). The recent convictions of Kenneth Lay and Jeffery Skilling finally brought this sad chapter of business history to a close (Calkins, 2004).

Interestingly, it was the courage of whistle-blowers that ultimately brought down this energy behemoth. Enron Vice-President Sherron Watkins has emerged as a hero for speaking out when no one else would with regard to the company's accounting practices (read Swartz, 2003 for a detailed account). However, the fate of whistleblowers is often more harsh than they expect or deserve. Most whistle blowers have rightly expressed misgivings about potential retaliation. They are blacklisted and often treated as a corporate pariah, unemployed, and persona non grata within their industries (Wee, 2002). In fact, Watkins reported that she had been demoted and her job assignments taken away from her until she finally she quit Enron (Near et al., 2004). Unfortunately, there is not much to shield the informant since even the protection of the federal whistle-blowing law is often viewed as ineffective (Devine and Alpin, ...