Blow the Whistle on What You Heard

¶ … blow the whistle" on what you heard in the garden? If so, how will you blow the whistle? If you decide to blow the whistle, what are your reasons for doing so? Your discussion should reflect knowledge of what Boatright says about issues, problems and justifications for whistle-blowing. Also, in discussing the answers to these questions you should include the following: 1) you should evaluate real and potential conflicts of interests that confront you in your decision 2) you should explain how your reasoning is consistent or inconsistent with the three following moral theories: Kantian moral theory, utilitarian moral theory and virtue theory.

The situation

Our MBA is not really aware of what is going on; all he has is assumptions, guesses. He has no actual proof. In the first case, he has had suspicions of several transactions -- their accounting practices seem suspect - and he has pointed out his concerns to the CFO. He has then been assured that all is fine and that they know what they are doing. In the garden, you hear the CFO speaking with some high-ranking person from Arthur Andersen. They speak about the practice of inflating Enron earnings and transferring debt to partners. The discussion has something to do with the sustainability of the practice and the possible consequences of discovery. Then you hear someone say that "It's really too late. We either make it work or the jig is up, and we try to contain the damage. In either case we all know what we should do with our stock." Since all of this is hearsay, however, and indirect, all you have to go on is, ultimately, conjecture. You may be correct in suspecting something but you do not have absolute proof.

Should you report it?

On the one hand, you certainly can. In fact, you, more than anyone else, are in a position to do so since you are a member of their organization. Ideally, the employee should first report the possible corruption to the employer since he works for the good of the organization and, therefore, rather than leaking it publicly he should first approach the employer. The problem is: what if the employer (as in this case) is aware of the information and the public are suffering? In the case of the Enron scandal, countless individuals and companies were at risk of financial penury and loss due to Enron's conduct. The U.S., as a whole, in fact would suffer from the result. You, the MBA, have already approached your employer; he has assured you all is fine. You, nonetheless, still have suspicions. The question then is whether you should persist in going public with them.

Boatright's second condition is that the public must be given substantial information that serves as something that deserves notice. There is no question in this case, but that this is critical data that affects a significant amount of individuals and businesses and should certainly be revealed. Not only is this information of something new but it is also information of some substantial level of misconduct that denotes substantial importance. Enron stick was dropping, whilst investors were urged to continue buying until the Enron stock value finally fell to less than a dollar. Thousands of people lost their jobs as a result of the scandal; others lost their pensions and their entire life savings, whilst shareholders lost money that they had invested into the organization once Enron went bankrupt. The ramifications were huge and certainly divulging your suspicions may prevent much calamity.

You have already approached the CFO. These are the requirements of whistleblowing. He has assured you that all is fine. You, however, still have substantial reason for concern. Some ethical approaches may urge you to approach a different authority (outside your employment) in this case, but the source has to be someone who will be in a position of authority (not necessarily the media). Kantian moral theory, utilitarian moral theory and virtue theory have three different perspectives on this.

Kantian moral theory is different to utilitarianism in that it does not depend on end-results -- namely happiness -- for practice, but rather exists as a 'categorical imperative' namely, that it applies to all situations regardless of the end result. What you do in one situation, you should always do regardless of the particular situation. In other words, a person should never kill regardless of situation. The ethics must be unconditional (with no exceptions) and it must be universal (applicable to all beings). You, the employee, have to report what you overheard out of a sense of duty (rather than inclination) for it to have moral worth, and you should do it because you wouldn't want to suffer. You would therefore not want others to suffer. You would therefore want this to be a universal law, and, according to Kant, you should therefore report what you overheard.

Utilitarianism (at least, general utilitarianism) would urge you to do so, too, since the happiness of more people is at stake than those who would suffer. Those who would suffer would be the fraudulent parties and those involved with them at Enron. These are many, but, on the other hand, many, many more people (and those affected by them) would suffer would you not report your suspicions. Utilitarianism would, therefore, request you to whistle blow.