Feldman, Yuval; Lobel, Orly --- "Individuals as Enforcers: The Design of Employee Reporting Systems" [2011] ELECD 942; in Parker, Christine; Nielsen, Lehmann Vibeke (eds), "Explaining Compliance" (Edward Elgar Publishing, 2011)

Book Title: Explaining Compliance

Editor(s): Parker, Christine; Nielsen, Lehmann Vibeke

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848448858

Section: Chapter 12

Section Title: Individuals as Enforcers: The Design of Employee Reporting Systems

Author(s): Feldman, Yuval; Lobel, Orly

Number of pages: 22

Extract:

12. Individuals as enforcers: the design
of employee reporting systems
Yuval Feldman and Orly Lobel*

INTRODUCTION

Employee reporting of noncompliance both within the organization and
to external government agencies can be an important tool for enhancing
compliance. Understanding and explaining whistle blowing by employees
is central to the study of compliance, regulation and private action because
it involves an individual decision by organization members to take action
when confronting illegal practices (Near and Miceli, 1985: 4). This chapter
argues that any attempt to understand compliance in organizational
contexts must take into account not only organizational motivations to
comply with laws and regulations, but also the motivations of individual
employees (and other observers) to come forward and report noncom-
pliance. With the increasing significance of decentralized techniques of
regulatory enforcement, as observed by a number of contributors to this
volume including May and Winter, and Gray and Silbey, scholars must
also consider the potential for whistle blowing as part of the overarching
explanation for compliance and noncompliance.
In the history of corporate capitalism around the world, whistle blowing
has proved an important factor in ensuring compliance in organizations.
In the US in 2002 the whistleblowers in the WorldCom and Enron finan-
cial debacles were featured on the cover of Time Magazine as the `Persons
of the Year.'1 Cynthia Cooper of WorldCom requested an internal audit
after discovering serious accounting misrepresentations. Even though the
company's chief financial officer asked Cooper to suspend the investiga-
tion, she chose to alert the ...