June 8th, 2017

Behnud Mir Djawadi (University of Paderborn)

Abstract:

This paper introduces an innovative experimental design to study the nature and occurrence of whistleblowing in an employee-organization context. Paired up as employee-manager teams, student participants could blow the whistle on a manager’s decision to withhold money earmarked for charity. Since reporting had negative financial consequences for both team members, the employee faced a conflict between ethical considerations and monetary benefit. Of 111 employee-manager pairings, 88 managers misappropriated donation funds and 33 employees blew the whistle on fraudulent behavior. Using selected items of both HEXACO and DOSPERT personality inventories, we link personality measures to actual behavior, thereby identifying traits that distinguish whistleblowers from silent observers. We find that the Honesty-Humility factor scale is a strong predictor for whistleblowing, and more altruistic or ethically sensitive employees are more likely to report wrongdoing. Our experimental design contributes to research by offering an innovative approach to study whistleblowing under controlled and incentive-compatible conditions.