Internal Whistleblowing System Impact on Employees' Attitude and Detection of Corporate Misconduct: Mediated by Fear of Retaliation and Management Responsiveness

Chan, Sarah Jane Wen Ying (2022) Internal Whistleblowing System Impact on Employees' Attitude and Detection of Corporate Misconduct: Mediated by Fear of Retaliation and Management Responsiveness. Masters thesis, Tunku Abdul Rahman University College.

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Abstract

Corporate misconduct has long been a rampant issue in Malaysia, in which they are often left unreported or undetected for a long period. Realising the dire consequences of corporate misconduct, organisations are encouraged to implement a sound internal whistleblowing system as part of their governance practices. Ineffective internal whistleblowing system may result in employees remaining silent or resorting to external whistleblowing which could pose a risk to the organisation’s reputation, public trust, and legitimacy. This study intends to examine the implications of an internal whistleblowing system towards employees’ attitude in detecting corporate misconduct, and whether employees’ fear of retaliation and management responsiveness to whistleblowing would affect the effectiveness of internal whistleblowing system. With that, a quantitative and cross-sectional study was conducted through the collection of primary data via electronic questionnaire involving 255 full-time employees in Malaysia to answer the research questions and objectives. Data obtained were analysed using Statistical Package for Social Sciences (SPSS) and Partial Least Square – Structural Equation Modelling (PLS-SEM as known as SmartPLS). The research findings revealed that internal whistleblowing system (IWS) could impact employee whistleblowing attitude (EWA) directly or indirectly through fear of retaliation (FOR) and management responsiveness to whistleblowing (MRTW), and ultimately impact the detection of corporate misconduct (DOCM). Notably, the ethical culture aspect (ECA) of an IWS is the most effective predictor of EWA. From a practical perspective, the research findings have highlighted the importance of fostering an ethical culture and strengthening the whistleblowing procedures in the workplace, minimising employees’ fear of retaliation, as well as increasing management responsiveness towards whistleblowing reports to encourage the whistleblowing attitude of employees.