Compliance incentives, whistleblowing, and the payment of rewards for information

Abstract

The present research paper analyzes the issue of compliance incentives, which includes whistleblowing and the payment of rewards for information. In particular, it will be investigated, how whistleblowing can be encouraged for a more effective combat of internal company corruption. Further, suggestions for effective reward systems will be made. Compliance incentives, whistleblowing, and the payment of rewards for information have thus far not been investigated in sufficient depth. Thus, no clear hypothesis could be formulated through reference to the literature review. Therefore, an exploratory approach was adopted for this research. In order to gain a first access to the field, ten selected experts were interviewed. Thereafter, a summarizing content analysis was conducted. If correctly designed, incentive systems and whistleblowing schemes can be extremely helpful in ensuring compliance in multinational corporations. At the same time, wrong incentives may have highly negative consequences which could long lastingly damage the corporation. The findings of the study can only be generalized to a certain extent, as a narrow set of data was analyzed. It is possible, that different rules might apply to dissimilar cultural settings. Although the analyzed data set was saturated, different results could have emerged from interviews conducted in other areas or during alternative time periods. Compliance incentives, whistleblowing, and the payment of rewards have thus far not been investigated in depth. The purpose of this study is to explore these new fields and develop innovative theory in order to gain a deeper understanding of the phenomena. The present study partially fills the identified literature gap by illustrating how wrong incentives may negatively influence compliance in multinational corporations. At the same time, examples for effective incentives are given and the importance of whistleblowing for the success of a corporation is stressed.