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The Joint Effects of Machiavellianism and Ethical Environment on Whistle-Blowing

Journal of Business Ethics volume 117, pages 153–172 (2013)Cite this article

Abstract

Given the importance of the Machiavellianism construct on informing a wide range of ethics research, we focus on gaining a better understanding of Machiavellianism within the whistle-blower context. In this regard, we examine the effect of Machiavellianism on whistle-blowing, focusing on the underlying mechanisms through which Machiavellianism affects whistle-blowing. Further, because individuals who are higher in Machiavellianism (high Machs) are expected to be less likely to report wrongdoing, we examine the ability of an organization’s ethical environment to increase whistle-blowing intentions of high Machs. Results from a sample of 116 MBA students support our premise that Machiavellianism is negatively related to whistle-blowing. Further, we find that Machiavellianism has an indirect effect on whistle-blowing through perceived benefits and perceived responsibility. Finally, we find that a strong ethical environment, relative to a weak ethical environment, increases whistle-blowing intentions incrementally more for individuals who are higher in Machiavellianism. Taken together, these findings extend our understanding of how Machiavellianism and an organization’s ethical environment impact whistle-blowing.

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Notes

  1. We find it interesting that while the perceived costs of whistle-blowing are included in the Model of Discretionary Reporting (Schultz et al. 1993), the perceived benefits (i.e., promotions, stopping an illegal activity, preventing harm, etc.) are not. Given that prior research indicates that the decision to report wrongdoing is based upon a costs-benefits analysis (Dozier and Miceli 1985), it seems as though the perceived benefits should also be included within the Model of Discretionary Reporting. As such, we also include a measure that assesses the perceived benefits of reporting and expect that the perceived benefits of reporting wrongdoing will be positively related to whistle-blowing intentions.

  2. The MBA students were informed that participation was anonymous and that all responses would be kept confidential. We note that seven students chose not to complete the survey, and eight responses were removed due to incomplete data.

  3. Recent whistle-blower studies also rely on MBA students as participants (Ayers and Kaplan 2005; Curtis 2006). The participants used in prior whistle-blower studies are similar to our participants in terms of both age and work experience. For example, the participants used in Curtis (2006) were, on average, 27-years-old and had 2 years of professional work experience; further, the participants used in Ayers and Kaplan (2005) were, on average, 28-years-old and had 31 months of professional work experience.

  4. For our ethical environment manipulations, it was not realistic to have symmetrically designed manipulations. For example, the strong ethical environment manipulation indicates that “Hours Inc. actively and strongly supports the Industry Association stance on ethical behavior and has adopted the Industry Association Code of Ethics as its own internal code.” A symmetrically designed weak ethical environment manipulation would indicate that “Hours Inc. does not actively and strongly support the Industry Association stance on ethical behavior and has not adopted the Industry Association Code of Ethics as its own internal code.” Within pilot-tests, such a manipulation was not deemed realistic; as such, similar to Booth and Schulz (2004), we take a more nuanced approach in designing our strong and weak ethical environment manipulations.

  5. In addition, to ensure that participants applied adequate attention to the instrument, we also included two additional questions in which we asked participants to recall several basic facts of the experimental scenario. Participants who answered either of these questions incorrectly were removed from the analysis.

  6. In untabulated results, we find similar results when the third-person response perspective is used.

  7. For parsimony, our mediation analysis only uses first person whistle-blowing intentions; however, results are quantitatively similar when we use third person whistle-blowing intentions as the dependent variable.

  8. Similar to Curtis (2006), we find that the perceived costs variable is not a significant mediator in our analysis.

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Acknowledgments

We appreciate helpful comments provided by Donna Bobek Schmitt, Steve Buchheit, John Masselli, Ralph Viator, and Jim Wilcox. We also appreciate helpful comments from attendees at the 2011 ABO conference.

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Authors and Affiliations

  1. School of Accountancy and Finance, Clemson University, Clemson, SC, 29634, USA

    Derek Dalton & Robin R. Radtke

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Appendices

Appendix A

Whistle-Blower Scenario

Nathan Mikkelsen has been employed for nearly 2 years as a purchasing agent for Hours Inc. Nathan accidentally overheard his co-worker, Tim Cleveland, making large purchases from Largo Corporation. During the conversation, Cleveland made arrangements to use Largo’s hunting lodge for 1 week. Nathan asked Cleveland about the deal because he recalled Largo’s bid was slightly higher than the other suppliers’ bids. Cleveland explained that he had done business with Largo for years and that they had a good business relationship. He also pointed out that Nathan might enjoy working out a similar arrangement with Largo. Nathan was concerned because he knew that accepting gifts or favors from suppliers was against company policy. In fact, he knew that it was against company policy to accept even small gifts.

What should Nathan do? Should he report the questionable activity to the next level of management, Jack Patrick, the manager of the Purchasing Department?

Appendix B

Strong Ethical Environment Manipulation

Managers at Hours Inc. have always practiced in a company environment where trustworthiness, respect, justice, fairness, and honesty are of paramount importance. Hours Inc. actively and strongly supports the Industry Association stance on ethical behavior and has adopted the Industry Association Code of Ethics as its own internal code. The code of ethics includes a policy that encourages employees to report issues of corporate wrongdoing. All firm personnel are required to participate in an in-house ethics training seminar every year. To further encourage adherence to the Code of Ethics, Hours Inc. includes an assessment of each employee’s ethical behavior in its performance evaluation system. As part of these systems, Nathan’s superior holds him personally responsible for adherence to the Code of Ethics. Further, the company has been known to consistently reward ethical behavior. Based upon observation of the behavior of managers within Hours Inc. and in others in the industry, Nathan believes there is a high level of adherence to the Code of Ethics both within Hours Inc. and within the industry generally.

Weak Ethical Environment Manipulation

Hours Inc. operates in an industry which has a formalized Code of Ethics. Although Nathan is aware of the industry’s Code of Ethics, following these guidelines has never been emphasized at Hours Inc. As far as Nathan knows, Hours Inc. does not provide ethics training to its employees and does not include an assessment of ethical behavior in its performance evaluation system. Nathan has never been evaluated based on his adherence to the Code of Ethics. Nathan is not aware of any managers at Hours Inc. who explicitly encourage ethical behavior or punish unethical behavior. Nathan is not aware of the level of adherence to the industry’s Code of Ethics both within Hours Inc and within his industry generally.

Appendix C

The Mach-IV Scale

Please read each statement carefully and then indicate the extent to which you agree or disagree with each question:

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Dalton, D., Radtke, R.R. The Joint Effects of Machiavellianism and Ethical Environment on Whistle-Blowing. J Bus Ethics 117, 153–172 (2013). https://doi.org/10.1007/s10551-012-1517-x

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Keywords

  • Ethical environment
  • Machiavellianism
  • Ethical disposition
  • Whistle-blowing