INNOVATION IN MANAGEMENT A STUDY OF WHISTLE BLOWING AT SELECTED INDIAN ORGANIZATION

MANI PRAKASH (STUDENT) SCHOOL OF MANAGEMENT STUDIES UNIVERSITY OF HYDERABAD maniprakash619@gmail.com 10/21/2011

A Study of Whistle Blowing at select Indian Organizations Abstract The recent corporate frauds and scams have provoked the stakeholders for demanding transparency in all activities of organization. So, it is the duty of employees to stop malpractices in organization and if such practices are identified then inform it to the higher levels. Many Indian organizations are implementing whistle blowing policy so as to enhance transparency, leading to increased corporate brand value and employee satisfaction in organization. Keywords: whistle blowing, employees and corporate branding. Introduction On 28th February 2003, in Mumbai, an email was sent to the Prime Minister by a custom officer complaining about the malpractices in the custom department. Then a mail was sent back to the department of this affair and action was taken, ending with the transfer of the sender of complain. Then ministry of Corporate Affairs, Government of India, had set up National Foundation for Corporate Governance on 1st October 2003 with the mission of best practices, structure, process and ethics. In the next month after the set up of NFCG, the murder of Styendra Kumar Dubey who was a project director at the National highway Authority of India shook the mind of all organization. Because he had taken a step against the corruption. He had blown the whistle against the malpractices involve in the Golden Quadrilateral project, by writing a letter to the PM. The person who brings the notice of malpractices involved into public notice or into the notice of the higher level is called as whistleblower and this activity is called whistle blowing. Blowing whistle against any person or malpractice is not an easy job. The Jayaraman (31), an employee of Pondicherry University was found dead after filing complaint regarding tempering of answer papers and mark sheets in MBBS exams. So, here the question arises who will blow the whistle against malpractices in organization and if someone blow the whistle then how will organization protect the whistleblower?

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Due to the fear of the circumstance which may have to face after blowing whistle many loyal employees are not blowing whistle which creates dissatisfaction among them leading to switching to the other organizations. If the loyal and talented employees, after working for few years in the organization leaves the organization than it indicates that it is not a good place to work and directly affect the branding of the organization. So, after focusing on this concern many organizations in Indian most of them which are following corporate governance have made policy to protect the whistle blower and have assign authority to top management who can listen the complains against false doing by any person in the organization. This whistle blower policy not only stops the malpractices in organization, also it will create transparency in activities in organization, which create healthy work environment leading to the branding of organization.

Method and Materials The organizations those have adopted Corporate Governance and accepting or making their own Whistleblower Policy are getting a key tool to supervise on managerial activities and action. Whistleblower policy is recognizes as a non- mandatory requirement for the organization under the Clause 49 of the Listing Agreement. Not only the Clause 49 and Corporate Governance but also the examples of whistle blowing cases around the world like Renault serves as a reminder of the importance of balancing the values of responding quickly to the whistleblower allegations with the need to ensure that any investigation into the allegation is sufficiently robust and complete because conducting an incomplete investigation can be far worse than the conducting no investigation at all. The number of countries adopting whistle blower policy is increasing to protect the whistleblower from both the private and public sector from occupational detriments or harassment. It is so because blowing whistle against the bureaucracy is a great challenge. The US Admiral Hyman Rickover has said-If you must sin, sin against God, not against the bureaucracy. God may forgive you, but the bureaucracy never will. This statement that whistle blowing is not for the weak hearted person. Various studies have shown that once when the whistleblower is identified than he can be subjected to isolation and humiliation, formation of anti-you group, organizational stonewalling, questioning ones mental health, unusually close observation of what one says and does,
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vindictive tactics to make ones work more difficult or insignificant, talk about so called generous service package, assassination of ones character, disciplinary hearings before one has had a chance to address ones concern and possible suspension. In spite of such constrain and circumstances if the employee is blowing the whistle against the false activity than one is the most loyal employee of the organization and it is the duty of the organization to protect him and provide him security. The many organizations in India which are following whistleblower policy have similar provision for whistleblower. Infosys says We have established a mechanism for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of our code of conduct or ethics policy. It also provides for adequate safeguards against victimization of employees who avail of the mechanism, and also allows direct access to the Chairperson of the audit committee in exceptional cases. We further affirm that no employee has been denied access to the audit committee. Gujrat Alkalis and Chemical Ltd have the policy as No adverse personnel action shall be taken or recommended against an employee in retaliation to his disclosure in good faith of any unethical and improper practices or alleged wrongful conduct. This policy protects such employees from unfair termination and unfair prejudicial employment practices. However, this policy does not protect an employee from an adverse action which occurs independent of his disclosure of unethical and improper practice or alleged wrongful conduct, poor job performance, any other disciplinary action, etc. unrelated to a disclosure made pursuant to this policy. Also, it promises for the confident of the name of whistleblower. Some companies have independent ombudsman which may not be an employee of the company, like Ashok Layland. Leading organizations like ICICI, DLF, WIPRO, SBI, TCS, MARUTI, ASIAN PAINTS etc all promises to provide the safety, security of the job and confidentiality of the name of the whistle blower. Also, they have a certain approach which one can take to inform against the false practices. In general one can blow the whistle against the malpractices in following ways1) One can report malpractices or violation of the law to supervisor, an inspector general, a hotline or the person assigned the job to maintain discipline in organization. 2) One can refuse to participate in workplace malpractice. 3) One can leak the evidence of malpractices to the media. Before blowing the whistle one has to also take care of his fairness in taking the approach. One has to make certain assumption absed on the facts which one is observing and finding it to be
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unhealthy for the organization. One has to ensure few processes before taking step against his ideas and approach is right. One has to ensure that the activity is malpractice and harming the organization or employees. One has to make perception that the management can prevent or stop this activity. One should also has to find some evidence for the proof or group who view that action and finally one has to do the process of exposing the problem.

Result Even after adopting Corporate Governance fraud and scams like IPO- Demat scam, Scorpene submarine scam, Punjabs City Project, the 2-G spectrum, Satyam fraud and illegal monies at Swiss Bank etc have made question mark on the Indian organization for transparency. The murder of Satyendra Kumar Dubey, Jayaraman and many unknown persons is de-motivating the employees to raise voice against the malpractices in organization. Many organizations are not having policy which can ensure the transparency in activities and provide the right to fight against the malpractices in organization. To have healthy working environment in organization we need to provide rights and have provision to stop malpractices. But this right to blow the whistle also comes with a lot of risk. So, employees may hesitate in taking this kind of step because they can feel the result which they may have to face. In todays scenario the customer and stakeholders all want the transparency in activities of the organization. Whistle blowing is one process if successfully implement than all the wrong people can be easily identified and malpractices can be stopped. Also, it enables in creating healthy and safe environment to work and if it is good to work in such environment than obviously the organization will be gaining brand value. So, the organization should also accept the whistleblower policy along with corporate governance. Conclusion The whistle blower policy is very important in creating healthy practices in organization. It is required to make the employees feel that someone supervising than if they try do some false practice in organization which is leading to loss of stakeholder or creating unethical practice. It is the power in the hand of employees against corruption. It also makes the employees more responsible and teaches them their duties. By doing these things it will create good environment
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to work, give the lesson to work with fairness, create transparency and would enhance the brand value of the organization. Suggestion For reducing the supervisory cost and time, creating transparency for stakeholders, reducing malpractices in organization, building and increasing brand value, retaining loyal employees and governing the corporate governance they must accept the whistleblower policy.

References1. http://www.gujaratalkalies.com/new/whistle.pdf 2. http://www.financialexpress.com/news/whistleblower-policy-the-best-way-to-checkfrauds/582492/ 3. http://www.expressindia.com/latest-news/Whistleblower-in-JudgeMinister-case-wasmurdered/483911/ 4. http://whistleblowers.wordpress.com/india-needs-iwpa/ 5. http://www.indianexpress.com/full_coverage.php?coverage_id=33 6. Infosys Annual Report 2011 7. TCS Annual Report 2011 8. http://stdwww.iimahd.ernet.in/~sandeepk/whistle.pdf 9. http://blogs.wsj.com/indiarealtime/2011/05/26/what-the-infosys-whistleblower-said-onvisas/

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