Whether a person decides to speak in favour or against depends on individual and group behaviour says Abhijeet Vadera

We often wonder why people behave the way they do. Why two people interpret the same situation differently and therefore react differently? And if the interpretation could be so different, is there a way to create a workplace where certain norms are accepted and practiced uniformly? The subject of organisational ethics is as complicated as human behaviour and one of the most challenging ones to address. With all the complexities involved, organisations may want to let ethics be and rather focus on the money. However, research proves that if they choose this route they may rather lose money and customers in the long term.

Why we do what we do?

In an organisational context, behaviours stem from the way we feel for the organisation, our love or hate for it, what we name as positive or negative deviance.

If we love the organisation, we want to do something constructive in order to help the organisation and its members. Love means that the organisation has given you something for which we feel indebted and want to return the favour. This in turn culminates is two types of behaviours – one is the positive deviation in which, if we think that certain policies and practices are detrimental, we suggest a positive, constructive change and that in turn helps the organisation. However, research shows that excess of love for the organisation can have a negative impact. For the love of the organisation, people are likely to engage in crimes or unethical behaviour for its benefit. And this in itself is a problem. While identifying with the firm works, over identification can create problems for the society.

When we hate the organisation or its employees, the simplest thing we do is deviate from the defined norms, resorting to unacceptable norms of behaviour. So having a positive attitude towards the organisation actually works because it eradicates the possibility of negative deviance. However, the word of caution is to not go overboard and make it intensely positive that people are unable to decipher between right and wrong in the organisational context.

Understanding the whistleblower

Whether a person decides in favour of or against speaking up depends on various aspects of individual and group behaviour. Research says that most inactive observers (non whistle-blowers) choose not to speak out because they fear retaliation or they think that the organisation will not support them, or that nothing would be done about it even if they report. On the other hand, when someone chooses to blow the whistle, it is usually because they are morally outraged at the wrongdoing even if they are not victims themselves.

When it comes to psychology, there is a slight difference between the way whistle-blowers and inactive observers perceive a situation and decided whether to speak up or not.

Both whistle-blowers and inactive observers (the non whistleblowers) tend to identify with the organisation. They both feel positively for the organisation. However, the difference is that whistle-blowers usually don’t like their supervisors and the inactive observers tend to like their supervisors. So for inactive observers the world is perfect – they love their organisation and their supervisor. They believe that people are complaining without a genuine problem and even if there is a problem their supervisor is capable enough to fix it. On the other hand, if you hate your supervisor or at least love him/her to a lesser extent, you are more likely to report to the right authorities if you see someone engaging in questionable practices.
The second aspect is the affiliations and the network that a person has in the organisation. My research shows that the network that a whistle-blower has in the organisation tends to influence whether his word is taken seriously or not. For instance if he has strong ties with the important people in the organisation and if people trust him, they are more likely to listen to him when he raises an issue. However, the ties need to be neutral. Any affiliation that is strongly positive or negative can influence a person’s behaviour, even if it doesn’t, it might give a perception of influence, in turn raising questions on the credibility of the whistle-blower. To minimise the possibility of doubt, whistle-blowers need to have neutral ties especially with the perpetrator and the victim.

Organisations generally find it very difficult to discern if the whistleblower is reporting the truth; whether he is driven by some ulterior motive or he is making a genuine complaint. This in turn may lead to inaction. Therefore a person’s credibility and how neutral they are in their affiliations in the organisation plays a critical role in defining the effectiveness of a person as a whistle-blower.

The cultural context

A research by Jonathan Haidt clearly suggests that the definitions of right and wrong do change with context and culture. As per his research, respecting authority, being loyal to one’s ingroup and belief in God is actually a question of morality in India unlike the western cultures. And I agree with a lot of what Jonathan Haidt says and do believe that the definitions of right and wrong differ depending on the culture one operates in. This indeed can prove to be a challenge for multi-national companies. In order to address it they could either have different rules for different cultures or they could instead define what is acceptable and not acceptable in the organisation and implement it uniformly across all cultures. However, each approach comes with its set of challenges, while the former is difficult to monitor, the latter is difficult to implement.

The idea is to acknowledge that differences exist and think of different ways in which people can imbibe the culture that the organisation wants to establish. And this takes time, and organisations need to invest time towards creating a strong policy framework and culture and reinforcing it at every stage staring from the time an employee joins.

A workplace where employees speak-up

Most organisations create ethics and compliance programmes and diligently train employees on them. However, the irony is that most of these programs don’t translate to action. Employees who say ‘yes’ when asked if they will speak up against misconduct, in reality don’t. However most of them when faced with such a situation, choose to stay inactive.

What we really need in order to convert the intention of whistle-blowing to actual whistle-blowing are strong sanctioning mechanisms and assured protection from retaliation. Second is the observed behaviour in organisations. If employees know from past experience and have been assured of it repetitively that there will be no retaliation and that the organisation will support them if they report wrongdoing, employees are more likely to speak up.

The presence of a strong sanctioning mechanism, assured protection from retaliation and the observed behaviour in organisations are instrumental in translating intentions to behaviour of whistle-blowing. However, these don’t necessarily emanate through formal ethics and compliance programmes. It actually comes through the informal culture, the stories that are told and the practices that are followed.

Does it pay to be ethical?

The world is becoming flatter and smaller place and there is no debate about that. Sooner or later people come to know what we as organisations and individuals are up to. It is impossible to behave irresponsibly and not get caught. The consequences could be far reaching and it is not just about the penalty that you need to pay, it is also about the loss of reputation. The repercussions are very deep.

One may argue that these are the softer aspects. Does it really create value for shareholders if organisations are responsible or ethical? A study done in the UK shows that that ethical organisations are 18 per cent more profitable than similar firms in the UK which did not believe in ethics. Another study in the journal of management found that organisations that have a strong internal and external ethics policy did very well in terms of market performance. Also, studies of consumer behaviour suggest that people buy products and readily pay a small premium for ethically made products but demand a huge discount for those that are made unethically. Although we do not have India specific research, we do have anecdotal evidence that suggest that a similar relation between ethics and shareholder value will exist in India as well.

As told by Abhijeet Vadera, Assistant Professor, Indian School of Business