Whistleblowing – The Psychological Paradox

I read the recent news of the Satyam CFO and External Auditor getting bail after over a year in judicial custody for the Rs 7000 crore fraud conducted by Ramlinga Raju the then Chairman of the organization. It got me thinking that since the fraudulent representation of financial statements continued for seven years, it is highly unlikely that qualified and highly trained chartered accountants were unable to identify these transactions. In this kind of a scenario where the Chairman is involved in the fraud and has so much of political and financial clout would a mere employee be in a position to whistle blow?

The whistle blower is expected to highlight to the audit committee or external legal authorities about the irregularities, fraudulent and unethical practices being adopted by the organization. The expectation is that the whistle blower will have the moral courage and character to go against the senior management of the organization for the greater good of the company and society. In the legal spirit the requirement definitely is justified.

In recent years the challenges mentioned on failure of whistle blowing procedures is that there is no protection against retaliation, socially the individual is ostracized and professionally the individual does not get another job thereby simply reaching a dead end in their careers. However, I think we are unable to see the forest from the trees.

My concern is that the basic premise of whistle blowing – “a person having a moral character to go against authority figures” -is something to be questioned. I am bringing here the various psychological studies conducted which prove that normally a person will not undertake a whistle blowing activity. The percentage of human beings who will have this level of moral development are insignificant.

1. Miligram Experiment

In the Miligram experiment it has been proved that people comply to authority figures instructions without coercion to the point of causing another unknown innocent individual’s death. It clearly indicates that ordinary people simply doing their job can participate in tremendously destructive activities which are against their personal value system because they are temperamentally geared towards complying to authority.

Extract from Wikipedia on Milgram Experiment – “The Milgram Study indicated that intelligent individuals who thought they were administrating deadly electric shocks onto a subject, continued to administer perceived deadly shocks at the prompting of an authority figure. There was no violent coercion in this experiment. However, the presence of a person who was perceived to be in authority, was sufficient for most test subjects to continue administering perceived deadly electric shocks. The test subjects first questioned the viability of the experiment only when the shocks were of 135 volts. In Milgram’s first set of experiments, 65 percent (26 of 40) of experiment participants administered the experiment’s final massive 450-volt shock, though many were very uncomfortable doing so; at some point, every participant paused and questioned the experiment, some said they would refund the money they were paid for participating in the experiment. Only one participant steadfastly refused to administer shocks below the 300-volt level”

2. Kohlberg’s Stages of Moral Development

Lawrence Kohlberg, in his 1958 dissertation, established the pre-conventional, conventional and post conventional stages of moral development. In my opinion, in the present materialistic society , most of us are in pre-conventional and conventional stages of moral development. The egoistical pride which we have for professional and financial success even if it requires bending the rules for personal gain, indicates a lack of moral consciousness. Altruism and social consciousness are attributes which are not held in high regard by the society in general. Intrinsically, the assumption of whistle blowing that employee will sacrifice their self interest for the greater good of the society is questionable.

Below is an Extract of Kohlberg’s theory from a report on Organi-Cultural Deviance: Socialized Deviance In Corporate America (Authors: Christie Husted, Ph.D and Renée Elaine Gendron, MA) which clearly indicates that the present day attitudes and attributes are of pre-conventional stage.

“In Kohlberg’s pre-conventional stage, individuals see morality as being external to themselves. Kohlberg found these individuals have a sense of right and wrong, believe in reciprocal relationships, view relationships as a means of exchanging favors, lack identification with family and societal value. What is seen as being right to an individual is what satisfies the individual’s self-interest. Thus, the individual’s desire to satisfy their needs is egoistic. In this stage, the individual is looking to satisfy their need for belongingness, safety, security and esteem through their association with the group. The group reinforces their ego, supports, justifies and encourages the individual’s behavior and provides them anonymity.

The next stage of Moral Development, the conventional stage, individuals see morality as living up to the expectations of family and community. There is a shift from unquestioning obedience to a relativistic outlook and to a concern for good motives. The individual attempts to understand the feelings and needs of others. There is a concerted effort to help others (Crain, 1985). The individual becomes altruistic.

In the last stage, the post conventional stage, individuals are attempting to determine what a society should be like. They are working toward a concept of “good society”. Kohlberg found these individuals believe just decisions can be reached by looking at a situation through one another’s eyes. However, Kohlberg admitted the highest stage of post conventional development is theoretical. Kohlberg found very few individuals attain this high level of moral development”

Even while studying the six stages of Heinz dilemma : Obedience, Self-interest, Conformity, Law-and-order, Human rights and Universal human ethics, there would be very few who would respond according to stage 5 and 6. Although, we consider crime as a relation to opportunity, rewards and rationalization, if the moral development has not taken place rationalization for participation in any crime would be without any conscious dilemmas. This indicates that employees as such do not need to be coerced into illegality, and the reward of being in a favorable position with the boss would be sufficient to actively participate in illegal activities.

In the book “Moral responsibility of the holocaust- A study of ethics of character” written by David H. Jones, he has analyzed that – “while genocide is obviously immoral how people were able to actively participate in mass slaughter with seemingly a clear conscience.” He has explained the fact how humans escape individual moral responsibility by participating in group consciousness and collective thinking. If the social structure sanctions mass slaughter, the group thinking will become so. He has mentioned less than 10% Germans helped Jews although without coming forward and doing it behind the back of Nazis.

Considering the above case and the psychological studies, are we setting unrealistic expectations from employees to whistle blow and come forward to protect the society. The above studies results show that on an average less than 10% of the human population has moral development to put social needs over self and be altruistic enough to look at the greater good of humanity.

In such a situation what is the possibility of whistle blowing becoming a successful tool for identifying corporate wrong doing? Is this not just a theoretical concept with minimal practical viability? Should we be considering the psychological angle of the law to determine whether it can be effective in the long run?

Please do share your thoughts.

9 comments on “Whistleblowing – The Psychological Paradox

  1. The main difficulty faced by a whistle blower is going against the collective’s narrative. Being primarily social animals with the additional attribute of sentience, it’s ingrained in our biology to build narratives to make sense of what we experience. Cultures, societies, organizations, businesses and all kinds of human collectives have some common narratives which are the tacitly agreed upon presentation of their collective experience. The whistle blower is the outsider going up against this common narrative.
    What inevitably follows from this, as you yourself write, is that the whistle blowing activity itself is not valued by society at large.
    Seen in this light, the prospect appears bleak for improvement. However, I am of the mind that just because things are the way they are does not mean that that’s the only way they can be. Understanding the scale of the problem should not necessarily be a deterrant. Changing this status quo requires the development of a quorum around the issue, a quorum who’ll work assiduously to elevate the standards. This requires participation by each and every one of us, and in turn, our influencing the people who inhabit our inner most circles of intimacy to do likewise. In this way, a ripple effect would be generated. After all of what value is one’s life if one can’t even influence those closest to us? I believe it’s up to each and every one of us to do our best in this regard, and try to make this world more equitable and just than we found it. Do we have the strength to bear the inevitable cost? We have to first try to even be in a position where such a question would arise. Based on my experience, most people don’t even try.

  2. Kamala,

    Thank you for sharing your insight. As you have rightly said group thinking and collective conscience makes it difficult for an individual to go against the tide.

    Aristotle said “Evil gets men together”, and evil definitely unites the population to some extent. We need moral development at personal and social level to ensure actions for the greater good of the community get people together.

  3. I agree with your analysis. While we would like to believe that a moral person would report dishonest or illegal activity, employees are not likely to report issues at the risk of their own wellbeing.
    For an effective whistleblower program there should be anonymous reporting channels, allowing employees to report issues without risk.

    • Hi Dave,

      I understand your views on anonymous channels, however the trend is not to investigate anonymous complaints since quite a few are false alarms and the cost of investigation is high. Unfortunately, that is what we are stuggling with and need to change.

      Kind regards,


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  5. Sonia, yes we do not investigate anon complaints in detail but it does undergo a minimum level of scrutiny and if there is some element of substance then investigation is launched. This is how I have been going about for the past 18 years and yes some leads are genuine – though the motive of the tipper varies . regards sandeep

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  7. The Holocaust is an extreme example, because those opposing the nazis in areas where they were in control could expect death. Hoiwever, I agree with your basic argument. A 2007 study by the Institute of Ethics found that 25% of people were aware of some wrongdoing at work, but only half of those were ready to report it — and I think this was based on intentions, not actual performance.
    The psychology of corruption also involves peer and family pressure — ‘…my spouse wants X that I can buy if I act corruptly’, ‘I know my dear uncle owes his success partly to this kind of activity, etc. etc.’.

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