Explain why whistleblowing is important to encourage in a fi

Explain why whistle-blowing is important to encourage in a firm. Provide an example where whistle-blowing made a positive impact.

Solution

Whistleblowing is a disclosure or a calling attention to a wrongdoing in terms of mismanagement, corruption etc. within an organization. The disclosure is ususally made by an employee of the organization.

Whistle-blowing is important to encourage in a firm as it helps in curbing workplace wrongdoing, illegal and unethical activities. Whistle blowing in a firm will act as a deterrent to the managers to indulge in wrong activities like giving bribes for furthering business, or engaging in illegal business activities or employing unethical practices.

An example where whistle-blowing made a positive impact is the case of Jeffrey Wigand who was the  vice president of research and development at Brown & Williamson. Wigand disclosed on CBS in the year 1996 that Brown & Williamson had intentionally manipulated its tobacco blend to increase the amount of nicotine in cigarette smoke. The positive impact of this whistle-blowing was that several cigarette companies stopped the unethical practice of manipulating its tobacco blend.