Analyzing Whistleblowing's Role in Business Ethics (BE439 Essay)

This essay delves into the concept of business ethics, defining it as the set of moral principles that guide conduct within organizations. It examines various ethical theories, including deontological, utilitarianism, virtue, and rights-based ethics, and explores the significance of business ethics in maintaining a company's reputation and fostering strong ethical decision-making. The essay analyzes the impact of whistleblowing as an ethical phenomenon, highlighting its role in shaping ethical behavior and addressing misconduct. It discusses real-life examples and ethical dilemmas faced by whistleblowers, along with regulations designed to protect them. The essay provides recommendations for promoting ethical practices and concludes by emphasizing the importance of whistleblowing in fostering a responsible and ethical business environment. The essay also emphasizes the importance of ethical decision-making within a business environment to enhance opportunities.

Running Head: BUSINESS ETHICS
BUSINESS ETHICS
Name of the Student
Name of the University
Author Note

1
BUSINESS ETHICS
Introduction
Business ethics includes all the policies and procedures, which can govern the
misconduct activities in an organisation. The first part of this paper has discussed the concept
of ethics. The next part is discussed on the importance of business ethics. The third part is on
the impact of whistle-blowers on ethical behaviour. The last part has provided certain
recommendations is to support the ethical considerations of whistle-blowers in an
organisation. The intense of this paper is to understand the ethical dilemma of whistle-
blowers in business ethics.
Discussions
Ethics
Ethics are the moral values and principles that support an individual to conduct an
activity appropriately. Ethical experience is an important factor in ethics. It is an activity that
continuously emerges in an individual. It is a kind of active receptivity in an individual.
There is a difference in the moral activity of every individual, which involves strong approval
and disapproval of a particular discussion (Keown 2016). Ethical experience is approval of
demand that can be filled with various constraints.
Theories of Ethics
1. Deontological ethics- This theory says that the morality of an action should be
described based on the action itself, but not based on the consequences of that action.
Kantian Ethics is an example of deontology ethics in which, Kant is trying to show
the moral problem by combing the objectivity with practicability.
2. Utilitarianism ethics- It is a kind of normative theory that mainly focuses on the right
and wrong of the consequences of an action (Donnell 2017). This ethical theory
focuses on the interest of other person rather than focusing on their interest.

2
BUSINESS ETHICS
3. Virtue theory of ethics- this theory indicates that the ethical perspective of an
individual can be judged by his or her character, rather than the action deviated by his/
her behaviour. This theory does not consider the morality of an action.
4. Rights- This is the ethical theory that is based on the rights of an individual. The
rights of society are given the highest priority because it is considered to be ethically
correct. For example, a person has said that her friend has borrowed her laptop.
Therefore, the person has the right to take the laptop in the afternoon (Kagan 2018).
Business Ethics
Business ethics includes the study of all the policies related to the controversial
activities in a business. Some of these activities include insider trading, discrimination,
corporate governance and corporate & social responsibility (Trevino and Nelson 2016). The
businesses appropriately choose the related policies for the well-being of society and
themselves.
Importance of Business Ethics
Business ethics is very much important in an organisation. Reputation is an important
component of a company. Potential investors and the shareholders will get attracted for
further investment in the company which have some good reputation and make promises to
keep the share price high. For maintaining this reputation, an organisation must focus on
providing moral guidelines and operates on strong ethics. It benefits the entire organisation.
Ethical decisions in Business Environment
Strong ethical decision-making in business can help a company to explore and select
the best business opportunities. Following are the ethical decisions done by a business:

3
BUSINESS ETHICS
1. A clear law of ethical code of conduct inside the organisation and making decisions
based on the code of ethics.
2. Selection of the employees who behave ethically and training them to maintain ethical
behaviour in the environment (Rozuel 2016).
3. Less focus on discrimination and focus more value on the employee’s capability for
team discussions or problem resolution.
4. Ethical decisions related to marketing and sales plan. Promotion of products and
services is done ethically without affecting the moral values of society.
5. Monitoring the regular structure of an organisation for ensuring an ethical climate in
the workplace. This is done by reviewing the performance regularly, responding to
customer’s feedback.
6. Ethical auditing practices preparing annual reports of an organisation. The correct
value of the figures is disclosed in the final statements of the annual reports
(McMurrian and Matulich 2016.).
Issues in Business Ethics
Following are some of the ethical issues faced by a business:
 Issues in Accounting- Unethical accounting practices are involved in many of the
public sector organisations. Accountants are involved in fraudulent activities due to
inflating earnings; auditors are involved in manipulation activities during the financial
disclosure of the company's annual report (Ablander and Gossling 2017).
 Issues in Social Media- Various unethical problems involved in social media are the
misuse of sensitive information of the company, disclosure of confidential
information, conflicts in interests.

4
BUSINESS ETHICS
 Technological issues- Various unethical matters related to the technologies of
business are privacy issues, issues in the digital medium, where the information's can
freely move to anywhere (Şahin 2018). These information’s can be copied
unethically.
 Issues in security- Confidential information is not secure. Security systems are more
complex nowadays to protect vital information's. This has increased the security
surveillance process.
Ethical Phenomena to shape ethical behaviour
Whistle-blowing is a critical phenomenon that can change the ethical conduct of an
individual. In this case, the personal generally exposes all the illegal information's that are
unethical and not correct for the organisation. The information disclosed in this case maybe
bring out specific disclosure that may cause violence in company policies, rules and
regulations. Whistle-blowing can lead to a major threat to the entire public and may result in
corruption. It can bring the two most important moral values, loyalty and fairness into
conflict. Fairness of employee promotion in an organisation can cause conflicts in loyalty
that can cause the promotion of some unskilled employees (Near and Miceli 2016). Loyalty is
an ethical consideration, and it should be kept within the ethical obligation. Responsible
people in an organisation may blow the whistle only when they believe that causing harm to
the employees is more good than doing something good. This is done when the whistle-
blower can stand on his/her point of view, even if there is a pressure from the top
management.
Whistle-blowers are helping to motivate the businesses in building a more ethical
environment for their stakeholders. Organisations are more focused on, building fair
treatment organisational culture, taking responsibilities and building accountability in the

5
BUSINESS ETHICS
company. Therefore, whistle-blowing reports is very much important for a company. The
business will be responsible for the public for acting against the whistle-blowing risks.
Whistle-blowing plays an important role in shaping the ethical practice of business. It makes
attention towards the wrongdoing of a business (Latan, Ringle and Jabbour 2018).
Whistle-blowing Practices in business
Whistle-blowing covers many of the areas of business like internal discrimination,
irrelevant sale practices and insecure working conditions. Insider trading is a good example
of whistle-blowing practices. These type of whistle-blowers generally undergo insider trading
in stock-exchanges. It encourages people to come forward to whistle-blowing activities.
Individuals may also engage in certain fraudulent scheme practices with their friends or
relatives to hide their involvement in specific illegal activity. Whistle-blowers can also stop
the security regulators in judging the practices (Gao and Brink 2017).
A real-life example of Whistle-Blowing
1. Samuel Shaw is a naval officer of the United States and was a whistle-blower with
Richard Marven of United States. Shaw was dismissed from the Navy after the case.
After the declaration of independence in 1777, ten sailors and the marines who had
joined in the U.S Navy were involved to fight for the independence to battle against
the Continental Navy and the king’s army. The sailors wanted to fight against the
defeated the British. Sailors had a fear that their leaders cannot successfully command
them in such efforts. For this, they blew the whistle for mistreatment of the prisoners.
They intentionally exposed the misconduct declared by their commander in the
middle of the war and agreed to send a petition to the congress.
Ethical Dilemmas of whistle-blowers

6
BUSINESS ETHICS
Whistle-blowers in public sectors face the various problem that can lead to an ethical
dilemma when the misconduct activities are very severe. Whistle-blowing should be done
ethically because it facilitates the understanding level of a person rather than the outcomes of
the action. It should consider that the action done by an individual is unfair and harmful for
the business. The whistle-blower in an organisation can be an employee, suppliers, clients or
contractors who may get involved in certain illegal activities. It will affect the moral values of
a business. The ethical dilemmas of whistle-blowing accounts in, making moral decision-
making in reporting the misconduct activity. It provides a guidelines that provides a moral
significance in the decision-making process. It has been found that most of the whistle-
blowing activities have a negative effect on the business (Andon et al. 2018). The misconduct
activities also effect on the careers of the whistle-blowers. They may be blacklisted from their
jobs.
Whistle-blowing has to the ethical frame with the ethics because an individual makes
a deep understanding of the fact that, whether the action will harm the organisation or not. It
can involve certain virtues that could be prevented from unethical practices. People who feel
threatened by whistle-blowing can force a whistle-blower to stop from any unethical
practices. Many cases have been seen, where a whistle-blowers plays an important role in
business growth.
Regulation to protect Whistle-blowing
 Whistle-blower Protection Act 1989, to protect the employees who are involved in
such activities like corruptions, and to protect from the consequences related to their
employment.

7
BUSINESS ETHICS
 Whistle-blower policy- This policy indicates that any kind of misconduct or legal
activities should be reported by the employees to act within the council (Allen and
Mair 2019).
Whistle-blowing in Self-motivation and self- understanding
Whistle-blowing is an unfair practice, where an individual wants themselves to
prevent from any kind of damages that have been derived from unethical disclosure of
sensitive information. At a very primary stage, whistle-blowers are motivated by the financial
gain receive from the reward. They motivate themselves in taking responsibilities to prevent
themselves from the risk. It also helps a person to come forward to share their knowledge
with others. Whistle-blowers are also benefited by self-awareness (Alleyne and Pierce 2017).
Recommendations
Every business must prepare a legal and ethical framework of code of conducts to
guide a proper-decision-making in the business. Proper regulations must be declared by the
management to reduce the negative whistle-blowing practices in an organisation. The
management must punish the employees in case of any inside trading practices, rather than
supporting the employees in such unethical practices. As an employer of an organisation,
he/she is responsible to do ethical practice inside the organisation. Companies should
encourage whistle-blowing ethically to solve employee-related problems. Government should
also make policies like formal policies for reporting violations and clear communication
policies, to report the unethical practices (Mbago, Ntayi and Muhwezi 2016). The
government should also make strong investigations on the misconduct activities by the
companies due to whistle-blowing. Following suggestions should be considered:
 The information leaker must check the status of information and whether the
information is protected.

8
BUSINESS ETHICS
 The second consideration for the information leakers is that, whether they have
specific obligations and guidelines to protect the information from any kind of
violated activities.
 The third suggestion is that they must check whether the information is related to
private or public matters. The information must not be related to any private matters
like sexual orientation, private finances or personal phone calls (Saputri et al. 2018).
 The leakers must consider positive harm; it shouldn't impact negatively to the
business or external environment.
 They must also see that, whether the misconduct activity that he/she is exposing is
according to the agreement.
Conclusions
Therefore, it can be deferred that, whistle-blowing plays an important role in shaping
the business ethics. It creates a sense of attention towards the misconduct occurred in the
business activity. The management and the company must provide an ethical guideline to
support the misconduct activity of an organisation.

9
BUSINESS ETHICS
References
Allen, C.R. and Mair, D.N., 2019. Disclosure of Noncompliance with Laws and Regulations:
What Whistle-blower Protections Exist for CPAs?. The CPA Journal, 89(3), pp.30-35.
Alleyne, P. and Pierce, A., 2017. Whistle-blowing as a corporate governance mechanism in
the Caribbean. Snapshots in Governance: The Caribbean Experience, pp.176-198.
Andon, P., Free, C., Jidin, R., Monroe, G.S. and Turner, M.J., 2018. The impact of financial
incentives and perceptions of seriousness on whistle-blowing intention. Journal of Business
Ethics, 151(1), pp.165-178.
Aßländer, M.S. and Gössling, T., 2017. Thematic Symposium: Business Ethics, Peace and
Environmental Issues (T0004).
Gao, L. and Brink, A.G., 2017. Whistle-blowing studies in accounting research: A review of
experimental studies on the determinants of whistle-blowing. Journal of Accounting
Literature, 38, pp.1-13.
Kagan, S., 2018. Normative ethics. Routledge.
Keown, D., 2016. The nature of Buddhist ethics. Springer.
Latan, H., Ringle, C.M. and Jabbour, C.J.C., 2018. Whistle-blowing intentions among public
accountants in Indonesia: testing for the moderation effects. Journal of Business Ethics,
152(2), pp.573-588.
Mbago, M., Ntayi, J.M. and Muhwezi, M., 2016. Compliance to acts, rules and regulations:
Evidence from sub-saharan africa. Journal of Public Procurement, 16(3), pp.374-405.
McMurrian, R.C. and Matulich, E., 2016. Building customer value and profitability with
business ethics. Journal of Business & Economics Research (JBER), 14(3), pp.83-90.

10
BUSINESS ETHICS
Near, J.P. and Miceli, M.P., 2016. After the wrongdoing: What managers should know about
whistle-blowing. Business Horizons, 59(1), pp.105-114.
O’Donnell, L., 2017. On the proper metaethical distinction between the divine command and
natural law theories of ethics.
Rozuel, C., 2016. Challenging the ‘million zeros’: The importance of imagination for
business ethics education. Journal of business ethics, 138(1), pp.39-51.
Şahin, A., 2018. How Principles of Business Ethics Relates to Corporate Governance and
Directors?. European Journal of Economics and Business Studies, 4(3), pp.22-27.
Saputri, A.S., Bakri, M., Djatmika, P. and Ar, S., 2018. Juridical Implication of Overlapping
Legal Protection for Whistle-blowers in Narcotics Case in Indonesia. JL Pol'y &
Globalization, 79, p.235.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to
do it right. John Wiley & Sons.