Whistleblowing and Culture: A Case for CSR in Developing Markets

Abstract

Whistleblowing is a powerful tool to tackle corrupt practices, thus contributing to an ethical organizational culture. We elaborate on a case study from Malawi, Africa, in which a private organization established an external whistleblowing system in 2009/2010 and attracted more than 50 clients from the private and the public sectors. We find that (1) individuals still hesitate to report misconduct but they are strongly encouraged to do so by extrinsic motivators (monetary incentives). (2) Malpractices including financial rewards are more likely to be reported, while nonfinancial malpractices play a minor role for potential informants. (3) Private companies, especially those headquartered abroad, are seriously concerned with the investigation of incoming reports. (4) Public entities exhibit lower degrees of commitment to whistleblowing systems and are regarded less serious in the follow-up process. On institutional level we conclude that strict governance processes are strong facilitators for effective whistleblowing and consequently for corporate social responsibility. These findings could be the basis for a systematic approach to enhance the effectiveness of whistleblowing systems in the private and public sector in Malawi and help in building hypotheses for quantitative testing in future research.