Examining incentive contracts for whistleblowing intentions : a systematic-experimental approach

Abstract

This dissertation explores the intricate relationship between whistleblowing behaviour and incentive contracts within organizational settings. The study comprises two distinct yet complementary components: a systematic literature review and an experimental investigation. The systematic literature review synthesizes existing knowledge on the influence of incentives on whistleblowing intentions, drawing from 35 papers published between 2006 and 2023 across 29 different journals. Through meticulous categorization and analysis, the review addresses four key questions: the types of incentives examined, associated outcomes, research designs utilized, and moderators identified in the incentive- whistleblowing relationship. Findings reveal a predominant reliance on experimental methodologies, particularly the Motivational Crowding Theory, in examining whistleblowing incentives. Monetary incentives emerge as the most examined type, with a majority yielding significant positive results, highlighting the prevalence of financial motivations in whistleblowing decisions. Complementing the review, an experimental study delves into the effectiveness of combined reward-penalty incentive contracts in influencing whistleblowing intentions, alongside moderating factors such as the closeness of the potential whistleblower to the wrongdoer and the moral identity of the potential whistleblower. Employing a randomized experimental design in which incentive contracts, perpetrator status and perpetrator-whistleblower closeness were manipulated, data from participants recruited through online platforms were subjected to rigorous statistical analyses. Contrary to expectations, results indicate that combined financial incentive contracts do not significantly increase whistleblowing intentions compared to individual reward-only or penalty-only contracts. However, the study identifies several factors that significantly influence whistleblowing intentions, including the closeness of the potential whistleblower to the wrongdoer, moral identity internalization, and level of ethical training. In addition, whistleblowing intentions were found to be higher for moral identity “symbolizers” under rewards contracts than penalty contracts. Together, these findings contribute to a nuanced understanding of whistleblowing incentives and their implications for organizational governance and ethics. By elucidating methodological approaches, identifying gaps in the literature, and offering practical insights, this dissertation informs organizational policies and practices aimed at fostering environments conducive to ethical behaviour and accountability amidst the spectre of fraud and misconduct.