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Whistle Blowing

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REPORT ON WHETHER WHISTLEBLOWERS SHOULD BE REWARDED FOR MAINTAINING SHAREHOLDERS VALUE OR SHOULD BE REVILED FOR THEIR ACT OF DISLOYALTY TO THE CORPORATE MANAGEMENT TEAM

IN PARTIAL FULFILMENT OF THE AWARD OF POST-GRADUATE DEGREE (MSC FINANCE AND BUSINESS MANAGEMENT) UNIVERSITY OF BEDFORDSHIRE

ACKNOWLEDGEMENT

TABLEOFCONTENTSACKNOWLEDGEMENT TABLE OF CONTENTS EXECUTIVE SUMMARY INTRODUCTION BACKGROUND OF STUDY STATEMENTS OF PROBLEMS RESAERCH AIM AND OBJECTIVES SIGNIFICANCE OF STUDY RESEARCH METHODOLOGY LIMITATION TO STUDY OVERVIEW OF CHAPTERS LITERATURE REVIEW INTRODUCTION HISTORICAL BACKGROUND OF WHISTLEBLOWING WHAT IS WHISTLEBLOWING TYPES OF WHISTLEBLOWING INTERNAL WHISTLEBLOWING EXTERNAL WHISTLEBLOWING ALLERGED ORGANISATION MISCONDUCT AFFECTED PARTIES TO WHISTLEBLOWING ORGANISATION (CORPORATE MANAGEMENT TEAM) SHAREHOLDERS & STAKEHOLDERS INDIVIDUALS (WHSITLEBLOWERS) POTENTIAL BENEFITS OF WHISTLEBLOWING TO VARIOUS PARTIES POTENTIAL BENEFITS TO ORGANISATION (CORPORATE MGT TEAM) POTENTIAL BENEFITS TO SHAREHOLDERS & STAKEHOLDERS POTENTIAL BENFITS TO INDIVIDUALS (WHISTLEBLOWERS) POTENTIAL COSTS TO ORGANISATION

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EXECUTIVE SUMMARY

1. INTRODUTION1.1 Background of Study Organizations often face information that exposes problems or wrongdoing or represents dissent. Messages signalling problems or wrongdoing frequently come from internal sources such as employees or from related agencies and organizations aware of problems or wrongdoing. When the organization refuses to take appropriate action in response to these messages, insiders or outsiders may call broader attention to the issue by blowing the whistle. The communicative process of blowing the whistle is critical for organizations and societies seeking to monitor areas of emerging risk that are threatening to an organizations established routines and assumptions (Jensen, 1987; Miceli & Near, 1992; Redding, 1985; Seeger 1997). Over the past 25 years the topic of whistle blowing has been turned around from being such a rare occurrence, to the present when more numerous cases would readily flow off the tongue. (Vinten, 1993). This signifies that the concept of Whistle-blowing cannot be over emphasized. Apart from being an important aspect of corporate governance, it occurs in all types of organizations and in response to many kinds of wrongdoing. Whistle-blowing is often presented as a personal act of conscience that contributes to the open dissemination of important information about the wellbeing of the public (Nader, 1990). Thus, whistleblowing can also be viewed as a strategy to enhance and maintain quality. It is commonly framed as the ethical act of a hero, a virtuous individual following a personal sense of right and wrong at great personal risk, and no doubt, some employers would always hesitate at the thought of providing rewards for ethical behaviour. In other instances, however, whistle-blowers are described as turncoats breaking trust and confidence and lacking in loyalty (Winfield, 1994). Peter Drucker (1982), for example, argued that encouraging whistle-blowing compromises trust and the

overall ethical climate of organizations: Whistle blowing is simply another word for informing (p. 234).

1.2 Statement of problem Having stated earlier that the concept of whistleblowing cannot be overemphasized, it is pertinent to give a brief definition of what whistle blowing is. It involves an individual with some level of unique or inside knowledge using public communication to bring attention to some perceived wrongdoing or problem, (Johannesen, 1996; Seeger, 1997; Vinten, 1994). Whistleblowing is seen as a risky business, however most whistleblowers suffer in various ways, including ostracism, harassment, punitive transfers, reprimands, referral to psychiatrists and dismissal. It is worthy to note that bosses and top managers are responsible for many of the attacks on whistleblowers, but coworkers often join in or do nothing, often due to fear that they could be the next victims. Several authors and academics have established numerous benefits associated with whistle blowing. If this being the case, it is however alarming to discover several ways in which whistle blowers suffer as a result of being loyal. This research tends to provide an insight into the above mentioned problem by which investigating ways in which whistle blowers can be rewarded and protected from the above punitive measures as well as exploring whistle blowing policies in selected organizations. 1.3 Research Aim and Objectives The aim of this research has its origin from the above mentioned problem. This research therefore aims to analyse if whistleblowers should be rewarded by companies as they enhance shareholders valuation, or whether they should be despised for disloyalty to corporate management team, using UK and USA as my main area of concentration.

In order to achieve this aim, the following research objectives would be examined; To examine the whole concept concerning whistleblowing To find out the benefits and costs of whistleblowing to the whistleblowers, organisations, as well as the stakeholders To examine the concept of Corporate governance as an important tool in business ethics To examine the employees duty of Loyalty and Confidentiality to an organisation To examine several laws and regulations protecting whistleblowers in the UK and in the United States. To draw a conclusion as to whether whistleblowers should be rewarded or reviled. 1.4 Significance of Study Whistleblowing has been viewed from different perception. As a result of this, so many research studies has been done on corporate governance as regards ethical issues, morality, illegality especially with regards to whistle blowing in Canada, UK, USA, Australia and a multitude of many other countries. Hence, academics have shown an intense concern in identifying the factors proposed to encourage and improve how whistleblowing can be managed in organisations. This study is concerned with determining the existing factors that protect individuals who disclose wrongdoings in organisations, and legal protection available for those who are willing to blow the whistle, but frightened of its cost. As a result of these, whistleblowers in organisations need to be protected especially when they are faced with challenging situations, particularly in the UK and the USA. This study will also help improve the practice of whistleblowing management by eradicating misconducts, and adopting ethical values in UK and USA, which serves as an indicator of this study.

However, this research will contribute to existing literature on whistle blowing as it tries to put to test whistleblowing theories and case studies, with particular reference to corporate organisation (corporate management team), and also serve as a base for further research on whistle blowing. 1.5Research Methodology Since the aim of this study is to analyse if whistleblowers should be rewarded or reviled, for the purpose of this study, secondary data would be used to obtain information needed, by thoroughly examining what other researchers/scholars have said and their various judgment .This research method that would be based on secondary data would be gotten from; Articles and Journals, Published Books, newspapers, magazine reports and published or unpublished reports. 1.6 Limitation of Study The limitation to this study is the fact that the research is restricted to the use of data from secondary sources only such as journals, textbooks, magazines and newspapers. The use of primary data would have been more helpful, in that we would not be restricted to what other researchers have said, but we would have had the opportunity of ask for others opinion via questionnaire and personal interviews 1.7 Overview of Chapters Chapter 1 of this study provides a general overview of the entire study. This includes an introduction and background of whistleblowing; the statement of problems; research aim and objectives; the significance of the study; methods that would be used in gathering information needed for the study is also included; limitation to the study; as well as the overview of chapters. Chapter 2 deals with the literature review, which looks at relevant theoretical and empirical work on whistleblowing. This chapter examines the benefits and costs of blowing the whistle, laws, regulations, policies as regards whistleblowing in the

UK and USA, such as the PIDA, Sarbanes Oxley, as well as employees duty of loyalty and employers ethical duty of good corporate governance. Chapter 3 provides a review of different case studies of whistleblowing in some selected corporate organisations in the UK and USA. The context of this chapter will entail brief background of the company of discuss, the scandal i.e. the accusation that created the motive for blowing the whistle, and finally the outcome of the case will be discussed in order to know whether the whistleblowers in question were rewarded or compensated for blowing the whistle, or punished, dismissed or victimised as a result of blowing the whistle on its organisation. Chapter 4 gives an analysis and discussion of the theories of the reviewed literature side by side with the selected case studies Chapter 5 winds up the study by presenting a conclusion based on our findings between certain case studies on whistleblowing and conceptual research framework under the study of whether whistleblowers should be rewarded as they help in improving the valuation of an organisations share, or whether they should be reviled for their act of disloyalty to their organisation. It also highlights recommendations are made for future research arising from the study.

WE HAVE TO STATE OUR FOCUS (COY OF FOCUS AND ARE OF CONCENTATION (SHAREHOLDERS FOR THE PURPOSE OF THIS STUDY)

2. LITERATURE REVIEW2.1 Introduction The issue of whistle bl

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