Internal Reporting

Whistleblower: Companies Need to Encourage Speak-Up Culture

Maria Lemos Stein recently interviewed noted consultant Wendy Addison, Founder and Chief Executive of SpeakUp SpeakOut, in The Wall Street Journal. Addison is also known for her personal role as a whistleblower on fraud and corruption in 2000 regarding LeisureNet Ltd., whose joint chief executives were convicted of fraud in one of the biggest corporate scandals in South Africa

Addison promotes a speak up culture as the method by which companies develop an environment where problems are acknowledged and solved transparently, and before a problem becomes widespread. That way, she asserts, companies avoid the fines, reputation loss, and other negatives associated with more public scandal. Further, the person or group reporting the issue does not face internal retribution because speaking up is encouraged at all levels of the organization.

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Bro-ken speech? Speaking up and speaking out

Speaking-up is hard to do. In a research survey conducted by Sean Martin, Associate Professor at the Carroll School of Management, and presented at Ethics By Design, respondents identified speaking up about ethical issues as the scariest form of “employee voice” in organizations (even more so than speaking up to point out problems). If you’ve ever felt that pain in your gut about giving bad news to your boss, you likely share this sentiment. 

Raising ethical issues requires courage compared to other forms of workplace interactions, as shown in research by James Detert – people’s self-preservation instincts drive their decision to stay silent, even if it’s an issue the company could perceive as one that improves its processes, products or procedures. Research by Professors Milliken (NYU Stern), Morrison and Hewlin (NYU Stern) also shows that employees are likely to be silent because they fear being labeled a troublemaker by their colleagues, and thus damaging valued business relationships. Surprisingly, retaliation in the form of losing one’s job or being passed up for a promotion is at the bottom of the list of reasons to stay silent.  

Given this fear, it’s no surprise that corporations struggle to change their internal culture, particularly when the issues are cultural transgressions that subtly create imbalances in the workplace.

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Internal Reporting: Praising leaders for identifying issues

Internal reporting is one of the quickest ways employees can alert relevant organizational- and governmental- contacts that something is amiss. While extensive research shows that a major impediment to doing so is fear of retaliation, new research from ES collaborator David Mayer and others demonstrates that for organizational leadership, speaking up is an asset while keeping quiet about ethical lapses is viewed as detrimental.

The study, “When are Do-Gooders Treated Badly? Legitimate Power, Role Expectations, and Reactions to Moral Objection in Organizations,” [PDF] to be published in the Journal of Applied Psychology, identifies important implications for both people and organizations.

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