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FACTORS THAT IMPACT ON WHISTLE-BLOWING AT A
FINANCIAL INSTITUTION
by
BEN BRITZ
submitted in partial fulfilment of the requirements for the degree of
MAGISTER COMMERCII
in the field of
BUSINESS MANAGEMENT
from the
FACULTY OF MANAGEMENT
at the
UNIVERSITY OF JOHANNESBURG
SUPERVISOR: DR. A. DROTSKIE
MAY 2012
ABSTRACT
South Africa as a country is struggling with the impact and consequences of fraud and
corruption. This problem is driven by mostly white-collar crime and organisational wrongdoing.
One of the largest banks in the country is losing in excess of R200m per annum as a result of
internal fraud and corruption. This study aims to investigate the factors that influence whistle-
blowing as a measure to remediate this problem.
For the sake of this study, whistle-blowing is defined as the reporting of illegal, immoral or
illegitimate practices to people or institutions that can correct these wrongdoings. If the
employees and the organisation better understand the drivers that promote effective whistle-
blowing, it could in turn help to expose these wrongdoings and thereby limit the negative
impact on the organisational stakeholders and society in general.
The research method used was quantitative, aimed at discovering patterns and/or causal
relationships that could shed light on the factors that impact whistle-blowing. This study
applied statistical methods to critically test the research results. The statistical analysis
highlighted some of the key variables that influence the determinants of whistle-blowing.
These findings revealed trust, knowledge, character and situation as the key variables that
correlate to whistle-blowing determinants. It rejected motives, prevention, gender, level of
education and employment duration as whistle-blowing determinants.
The study concludes by providing recommendations to both the organisation and the
prospective whistle-blower in this regard.
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DECLARATION OF ORIGINAL WORK
I, Ben Britz, student no 201029162 hereby declare that this dissertation is my own unaided
work. Any assistance that I have received has been duly acknowledged in this dissertation. It
is submitted in partial fulfilment of the requirements of Masters of Commerce at the University
of Johannesburg. It has not been submitted before for any degree or examination at this or at
any other university.
Signature Date
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ACKNOWLEDGEMENTS
I want to express my sincere appreciation to the following people who assisted me in
completing this study:
• To the Almighty God. Thank you for providing me with the talent, opportunity and
unconditional grace to complete this study.
• To my wife Natasha. Thank you my darling for always believing in me and spending
countless hours by my side in support. Your continued love and encouragement kept me
going during the hard times of this study.
• To my promoter Dr. Adri Drotski. Thank you for your assistance, guidance and wise
council when I needed it.
• To my editorial contact Mrs. Elzebeth Marnitz. Thank you for your linguistic and editorial
assistance.
• To my statistical consultant Jaclyn Smith. Thank you for all the data processing and
analytical assistance.
• To my fellow student syndicate members. Mark Rouse, Morne Eloff and Wentzel Coetzer.
You guys became friends over the years, thank you for helping me to get through the
stressful and pressurised times.
• To the respondents. Thank you for taking the time and effort to participate in this study.
• To my colleagues. Thank you for your continued support at the office during the times that
this study occupied my energy and focus.
• To all my friends and family. Thank you for your understanding and support in times that I
operated like a complete recluse.
• To my late Dad and brother. I know you would have been immensely proud of this.
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TABLE OF CONTENTS
Page
Abstract ……………………………………………………………………………………………..…. i
Declaration of original work …………………………………………………………………………. ii
Acknowledgements ………………………………………………………………………………….. iii
1 CHAPTER ONE: INTRODUCTION AND BACKGROUND TO THE STUDY

1.1 Introduction ................................................................................................................... 1
1.1.1 South African background and context........................................................................ 4
1.1.2 Organisational and business unit introduction ............................................................. 6
1.2 Rationale for the study .................................................................................................. 7
1.3 Purpose of the study ..................................................................................................... 8
1.4 The research problem ................................................................................................... 8
1.5 Research objectives ...................................................................................................... 9
1.5.1 Primary objective ........................................................................................................ 9
1.5.2 Secondary objectives .................................................................................................. 9
1.6 Hypotheses ................................................................................................................. 12
1.7 Literature review outline .............................................................................................. 13
1.7.1 Key terms and definitions .......................................................................................... 15
1.8 Research methodology outline .................................................................................... 17
1.8.1 Method of the study .................................................................................................. 17
1.8.2 Sampling ................................................................................................................... 17
1.8.3 Data collection method and instrument ..................................................................... 18
1.9 Potential value of the research .................................................................................... 19
1.10 Outline of the study ..................................................................................................... 20
1.11 Summary and conclusions .......................................................................................... 22
2 CHAPTER TWO: FINANCIAL INDUSTRY AND BANKING SECTOR OVERVIEW
2.1 Introduction ................................................................................................................. 23
2.2 People aspects ............................................................................................................ 26
2.3 Technological aspects ................................................................................................. 27
2.4 Regulatory and compliance aspects............................................................................ 28
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2.5 Strategic aspects ......................................................................................................... 30
3 CHAPTER THREE: ORGANISATIONAL AND BUSINESS UNIT OVERVIEW
3.1 Introduction ................................................................................................................. 32
3.2 Organisational overview and context........................................................................... 33
3.3 Whistle-blowing policies overview ............................................................................... 35
3.4 Statutory and legal protection available to whistle-blowers ......................................... 36
3.5 Day-to-day management overview of whistle-blowing................................................. 38
4 CHAPTER FOUR: LITERATURE REVIEW AND THEORETICAL STUDY
4.1 Introduction ................................................................................................................. 41
4.2 Personal characteristics of whistle-blowers ................................................................. 43
4.3 The role of ethical values and belief frameworks of whistle-blowers ........................... 44
4.4 Typical motives and emotions of whistle-blowers ........................................................ 46
4.5 Determinants of organisational failure to detect wrongdoing ....................................... 48
4.6 Influence of group dynamics and corporate structures on whistle-blowing.................. 50
4.7 External channels available to whistle-blowers ........................................................... 51
4.8 Summary of the key variables expected to have an influence on whistle-blowing ...... 53
5 CHAPTER FIVE: RESEARCH METHODOLOGY AND APPROACH
5.1 Introduction ................................................................................................................. 55
5.2 Research approach ..................................................................................................... 55
5.3 Research design ......................................................................................................... 58
5.3.1 Unit of analysis ......................................................................................................... 58
5.3.2 Research population ................................................................................................. 58
5.3.3 Sampling design ....................................................................................................... 58
5.3.4 Inclusion and exclusion criteria ................................................................................. 60
5.3.5 Method of data collection .......................................................................................... 60
5.3.6 Research instrument ................................................................................................. 61
5.4 Method of data analysis .............................................................................................. 61
5.4.1 Defining factor analysis ............................................................................................. 62
5.4.2 Purpose of factor analysis ......................................................................................... 62
5.4.3 Criteria to determine the number of factors ............................................................... 63
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5.4.4 Methods to simplify the factor results ........................................................................ 63
5.4.5 Communality of variables .......................................................................................... 63
5.4.6 Data analysis method ............................................................................................... 63
5.4.7 Data measurement method....................................................................................... 64
5.4.8 Validity and reliability testing criteria.......................................................................... 66
5.4.9 Internal consistency criteria....................................................................................... 66
5.4.10 Sampling adequacy criteria ....................................................................................... 67
5.5 Ethical considerations ................................................................................................. 67
5.6 Limitations of the research approach .......................................................................... 67
5.7 Referencing technique ................................................................................................ 68
6 CHAPTER SIX: EMPIRICAL RESULTS PRESENTATION
6.1 Introduction ................................................................................................................. 69
6.2 Biographical information results presentation .............................................................. 69
6.2.1 Frequencies and descriptives.................................................................................... 69
6.3 Whistle-blowing influences results presentation .......................................................... 72
6.3.1 Factor analysis results presentation .......................................................................... 72
6.3.2 Correlation analysis results presentation................................................................... 76
6.3.3 Review of the whistle-blowing influences results ....................................................... 80
7 CHAPTER SEVEN: EMPIRICAL RESULTS INTERPRETATION
7.1 Introduction ................................................................................................................. 84
7.2 Interpretation of empirical research results ................................................................. 84
7.2.1 Interpretation of the results for trust variables ........................................................... 84
7.2.2 Interpretation of the results for knowledge variables ................................................. 86
7.2.3 Interpretation of the results for character variables.................................................... 87
7.2.4 Interpretation of the results for situation variables ..................................................... 88
7.2.5 Interpretation of the results for biographical variables ............................................... 89
7.3 Review of the empirical results interpretation .............................................................. 90
8 CHAPTER EIGHT: CONCLUSIONS AND RECOMMENDATIONS
8.1 Introduction ................................................................................................................. 93
8.2 Revision of the research problem ................................................................................ 93
8.3 Revision of the research objectives ............................................................................. 93
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8.4 Revision of the hypothetical points of departure .......................................................... 94
8.5 Revision of the literature review .................................................................................. 96
8.6 Revision of the key findings ......................................................................................... 98
8.7 Recommendations .................................................................................................... 103
8.8 Limitations of the study results .................................................................................. 105
8.9 Suggestions for future research ................................................................................ 106
8.10 Summary and conclusion .......................................................................................... 107
9 REFERENCES
10 APPENDICES
10.1 Appendix A – Research Instrument ........................................................................... 115
LIST OF FIGURES
Figure 1: South African global corruption ranking ..................................................................... 6

Figure 2: Conceptual framework of the research objectives ................................................... 10
Figure 3: Banking sector market leaders 2005 - 2011 ............................................................ 25
Figure 4: Segmentation of the business structure of Bank X .................................................. 33
Figure 5: CS Leadership reporting structure ........................................................................... 34
Figure 6: Stages in sampling selection ................................................................................... 59
Figure 7: Stages of data analysis ............................................................................................ 64
Figure 8: Selection of multivariate interdependence technique............................................... 65
Figure 9: Empirical results summary presentation .................................................................. 82
Figure 10: Key findings overview ............................................................................................ 99
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LIST OF TABLES
Table 1: Banking sector background statistics ........................................................................ 26

Table 2: Typical pressures that can lead to fraudulent activities ............................................. 42
Table 3: Key external channels available to whistle-blowers .................................................. 52
Table 4: Key variables expected to have an influence on whistle-blowing .............................. 53
Table 5: Research approach summary ................................................................................... 57
Table 6: Biographical information frequencies and descriptives ............................................. 70
Table 7: Rotated factor matrix results ..................................................................................... 73
Table 8: Key factor lable and description ................................................................................ 74
Table 9: Factorability results ................................................................................................... 74
Table 10: Total variance explained results.............................................................................. 75
Table 11: Consistency and reliability testing results ............................................................... 75
Table 12: Rating scales test of normality results..................................................................... 76
Table 13: Spearman’s rank order correlation analysis results ................................................ 77
Table 14: Wilcoxon signed rank test results............................................................................ 78
Table 15: Biographical variables test of normality results ....................................................... 79
Table 16: Data analysis techniques summary ........................................................................ 81
Table 17: Results interpretation summary .............................................................................. 90
Table 18: Summary of the selected sources of literature reviewed......................................... 97
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1 CHAPTER ONE: INTRODUCTION AND BACKGROUND TO THE STUDY
“Life begins to end the day we become silent about things that matter”
- Dr. Martin Luther King Jnr.
1.1 Introduction
One of the basic human moral values is the responsibility to raise concern and report when
something is perceived to be wrong, the duty to “blow the whistle” in a manner of speaking.
This moral duty is also further enhanced through the subsequent feeling of shame and guilt if
the apparent wrongdoing is ignored or not reported at all. Evans (2008:268) suggests that the
term whistle-blowing originated from the practice of English policemen blowing their whistles
when observing a crime.
Heisler (2002) reported via Time magazine that the prestigious Time Person of the Year
Award for 2002 was bestowed onto three so-called whistle-blowers namely Sherron Watkins
of Enron, Coleen Rowley of the Federal Bureau of Investigations and Cynthia Cooper of
WorldCom. These individuals acted as whistle-blowers within their respective organisations to
highlight internal irregularities that resulted in serious financial, social and political
consequences. Could the continuous irregularities at Enron and others have been avoided if
these whistle-blowers were taken seriously much sooner?
The Enron case illustrated, again, that the process of whistle-blowing can sometimes be as
uncomfortable as it is essential (Walenta, 2006:442). The executives of Enron chose to
retaliate rather than rectify when the first signs of their wrongdoing were exposed. Empirical
research has shown that the process and consequences for those who engage in the act of
whistle-blowing are often painful with enormous emotional and sometimes negative financial
consequences (Miceli, Near & Dworkin, 2008:2).
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The work of Miceli, et al. (2008:102) found that the dependence of the organisation on the
wrongdoing (such as the misstating of the financial results in order to protect the share price
in the case of Enron) is a key predictor of organisational-retaliation towards the whistle-blower
who exposes the wrongdoing. A key consideration of course is what does this wrongdoing
cost society at large? The World Bank has estimated that the annual cost of institutional
corruption exceeded $1trillion globally in 2004 (World Bank Report, 2004). Of this amount,
$755 billion was directly related to employee fraud, antitrust violations, taxation fraud and
health care related fraud (Miceli, et al. 2008:2).
This institutional corruption is rather counterproductive to the reduction of poverty and the
efforts to uplift the global community (The Word Bank, 2004). The global economic downturn
that started at the end of 2008 was triggered by the collapse of the major American
investment bank, namely Lehman Brothers. On 15 September 2008, Lehman Brothers filed
for bankruptcy to the value of over $600 billion, the largest organisational failure to date in
history at that point in time. The collapse of this investment bank kick-started this economic
downturn that in turn destroyed value which will take many years to recover. Sakthi (2010)
reported via Reuters that Mathew Lee acted as an internal whistle-blower within Lehman
Brothers and was subsequently laid off by the organisation’s leadership.
The consequences to those who chose not the act in time when Lee blew the whistle remains
unclear. Organisations clearly share the responsibility to encourage the reporting of corruption
and wrongdoing. Kaptein and Avelino (2005:46) state that internal whistle-blowing of
wrongdoing is something most organisations encourage through instruments such as a code
of conduct that stipulates the organisational business policies, principles, values and
standards in order to enhance the ability of the organisation to discover the wrongdoing as
early as possible.
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Svensson and Wood (2004:321) further argue that, depending on the trust relationship of the
employee with his/her direct manager, most employees will report potential irregularities via
their normal organisational leadership structures, albeit via their direct managers or any
person in a senior leadership position. If the trust relationship is therefore not sufficient,
alternative channels to report possible wrongdoing anonymously are usually provided for, via
internal dedicated organisational reporting hotlines and email channels.
In summary, the introductory section of this study paints a picture of organisational

wrongdoing and the impact thereof on society that is devastatingly disconcerting, both in
terms of financial value that was destroyed and the socio-developmental aspects for the poor
and disadvantaged. This study is driven by the moral responsibility to investigate the factors
that influence those who choose to act as whistle-blowers and expose the incidents as
described above, and also form a better understanding of the factors that influence
employees not to blow the whistle.
This is done by analysing the situational factors and personal characteristics that can act as
predictors of why some people consciously choose to be whistle-blowers, while other chooses
not to be. A deeper insight into these predictors can undoubtedly better equip both the
organisational leadership and the actual employees to deal with corruption and wrongdoing in
a timely fashion in an attempt to avoid the same consequences of Enron and similar
organisations.
Most of the examples discussed have been from an international context. It is also important
to briefly look at the background context from a South African point of view to ascertain if
there are parallels and similarities or dissimilarities compared to the international examples
stated.
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1.1.1 South African background and context
Manual (2009) reported that South Africa is currently experiencing the negative financial
consequences of the global financial downturn in 2008. As a result, average debt levels have
since risen sharply since the economic downturn and are expected to remain high for the
foreseeable future (Budget Speech, 2009). PriceWaterhouseCoopers (2009:2) reports that
economic crime in South African organisations is increasing, with an increased risk of
fraudulent activities during the economic downturn. Minnaar-Van Veijeren (2011:8) reports
that white-collar crime in South Africa has increased by 51.9% from 2003 to 2010.
The South African Police Service (2009:21) reports that both the number and value of
wrongdoing incidents related to commercial crime within corporate organisations have grown
substantially in the period from 2007 to 2009. One of the well-known South African examples
of wrongdoing by organisational executives similar to those of Enron, is the case of
Leisurenet Limited. Hogg reports via Moneyweb (2011) that the Leisurenet company
treasurer, Wendy Addison, acted as the whistle-blower to expose the wrongdoing of the
senior executives of Leisurenet.
The sad ending of the reports states that she has basically been unemployed ever since and
had to leave South Africa as a result to find employment elsewhere. Ironically, she was then
employed in the United Kingdom by the Virgin Group (who took over the Leisurenet business
after it was liquidated) but subsequently sacked when the owner, Richard Branson found out
the she was the whistle-blower in the Leisurenet saga.
The financial impact on the shareholders of Leisurenet was significant, combined with the
negative social impact of many employees losing their employment and income livelihood.
Steenkamp and Malan (2009:26) found that the South African financial industry has strikingly
similar examples of corporate failures due to financial mismanagement.
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Examples include companies such as Saambou Bank, Fidentia, Macmed, Masterbond and
Regal Bank. To further illustrate this case in point, Mphande (2010) from The Herald reported
that ABSA Bank employees colluded to commit fraud to the value of R1.38m by divulging
client information to criminal syndicates.
Although the value of the alleged wrongdoing was not substantial enough to bring ABSA into
serious financial difficulty, the inference is drawn from this event as to the ineffectiveness of
governance within ABSA, and the seemingly unwillingness of their employees to act as
whistle-blowers. South African banks have been largely protected from the global economic
downturn since 2008, largely due to the tight regulatory controls from government and
regulators to safeguard the shareholders and actual clients of the banks. This is in sharp
contrast with the international examples as illustrated by the case of Lehman Brothers.
Legislation around aspects such as money laundering, enterprise risk management and
controls around credit monitoring are only a few examples that highlight the increasing
pressure on the financial industry to adhere to best practice standards, and continually
improve governance measures within the institutions that operate within this industry (ABSA
Group Limited Annual Report, 2009:8).
The background and context section also provides some insight into the similarities and
differences between the International and South African organisational environments. On the
similarities front it is clear that the case of Enron is very similar to that of Leisurenet, whereby
the leadership of these organisations failed to correct wrongdoing practices after they had
been exposed by whistle-blowers, as the leaders themselves were the wrongdoers. On the
dissimilarities front, the tight regulatory controls of the South African financial industry proved
to be a saving grace for the South African society at large compared to that of the United
States of America and most of Europe.
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Figure 1 ranks South Africa against other nations in terms of the corruption perception index
as published annually by the independent organisation Transparency International:
Figure 1: South African global corruption ranking
Source: Adapted from the Corruption Perceptions Index 2011

(www.http://cpi.transparency.org/cpi2011/in_detail)
Figure one illustrates that South African does not manage corruption well compared to other
countries around the globe which supports the urgency and need for whistle blowers to
expose wrongdoings.
1.1.2 Organisational and business unit introduction

The empirical part of this study will focus on the employees of the Cash Solutions (hereinafter
referred to as CS) business unit within Bank X. Bank X is a major player in the banking and
larger financial industry in South Africa. Bank X is listed on the Johannesburg Stock
Exchange. CS manages all aspects of the cash business of Bank X. It focusses on aspects
related to the secure processing, transportation, distribution, validation and transacting of
cash through various channels including bank branches, ATMs and processing centres. The
cash-under-management includes the management of notes and coins across the entire
value chain from its distribution origination at the South African Reserve Bank through to the
distribution, counting and recycling back into the banking channels.
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1.2 Rationale for the study
If the employees and leadership better understand the drivers that promote effective whistle-
blowing it could lead to the early detection of potential financial and social risks for
stakeholders across the spectrum.
The moral duty to report issues related to wrongdoing within the workplace are consequently
very important to help with the eradication and possible prevention of these issues. One of the
key reasons why employees do not engage in whistle-blowing, is their perception of the
apparent lack of legal protection by the statutory laws of their relevant country.
They are often intimidated and minimised within their workplace and private environments
(Malan, 2010:6). The factors that influence the decisions of the whistle-blower are therefore
important as part of influencing organisational policies and statutory laws to better enable and
protect whistle-blowers within organisations.
This study rationale also aims to at least identify the factors that will help to positively
influence South African employees to act as whistle-blowers when they identify wrongdoing.
The factors can then be applied to formulate internal organisational policies and be
incorporated into recognition and reward programmes aimed at better corporate governance
and fair business practices.
For the purpose of this study, the act of whistle-blowing is classified into two basic
dimensions, namely the internal employee related dimension and the external client related
dimension. This study will focus exclusively on the whistle-blowing considerations of the
internal employee dimension and the determinants that influence a whistle-blower.
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1.3 Purpose of the study
The introductory and background section of the study highlights the consequences of
organisational wrongdoing through some of the famous examples of whistle-blowing cases
related to Enron, WorldCom, Leisurenet, Saambou Bank and others. The study’s main
purpose is to investigate the factors that influence whistle-blowing at a financial institution.
1.4 The research problem

The research problem statement is encapsulated as “serious internal corruption and fraud at
financial institutions are rarely reported via whistle blowing”.
The problem statement examined in this study is both complex and multifaceted. It deals with
the very factors that impact on the wellbeing of society at large. South Africa is one of many
global examples where wrongdoing seems to be at the order of the day. The best known
examples of wrongdoing are usually those cases that are linked to powerful leaders in the
public sector.
These cases however are only the ones that make it into the media. The wrongdoing cases in
the private sector seldom get the same extent of media coverage, as organisational leaders
usually want to protect the image of these organisations to thereby protect their reputations
and future income streams.
Internal employees often fail to report wrongdoing out of fear for retribution from their
organisational leaders and a perceived lack of legal protection from the law. The factors that
motivate individuals to act as whistle-blowers are therefore paramount to design mechanisms
and processes to promote a culture of reporting in order to combat the negative effects of
wrongdoing.
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1.5 Research objectives
The primary and secondary objectives of the study are as follows:
1.5.1 Primary objective

To analyse the variables that encourage and discourage employees to engage in whistle-
blowing when becoming aware of internal wrongdoing.
1.5.2 Secondary objectives

In order to achieve the primary objective of this study various secondary objectives are
formulated. The secondary objectives of the study are to investigate if relationships exist
between independent variables (factors that encourage and discourage) and the intervening
variable (whistle-blowing). The secondary objectives are collectively important to formulate
possible recommendations for the employees and leadership of organisations on how to
better deal with wrongdoing if and when it is exposed through whistle-blowing. Ultimately, the
primary and secondary objectives combined could serve as recommendations for
improvement of whistle-blowing interventions that in turn could reduce the losses to the
organisation due to internal wrongdoing.
The secondary objectives of the study are presented as follows:
1) To determine the impact of the relationships that may exist between whistle blowing and
variables related to trust.
variables related to knowledge.
variables related to character.
variables related to motive.
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variables related to situation.
variables related to prevention.
biographical variables.
Figure 2 illustrates the conceptual framework of the research objectives:
Trust
Variables
Knowledge
Variables
Independent Variables
Character
Intervening Variable
Variables
FACTORS THAT IMPACT ON

Motive
WHISTLE BLOWING AT A
Variables
FINANCIAL INSTITUTION
Situation
Variables
Prevention
Variables
Biographical
Variables
Figure 2: Conceptual framework of the research objectives
Source: Adapted from Zikmund, Babin, Carr, & Griffin ( 2010:123)
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Contextualisation of the independent variables
For the purposes of this study, the variables described in the secondary objectives are
contextualised as follows:
• Trust is contextualised as the variable that assists in the better functioning of

organisational functions through improved business relationships (Svensson & Wood,
2004; Evans, 2008).
• Knowledge is contextualised as the understanding and comprehension of the processes,

policies and legislative measures available to protect whistle-blowers (Devine &
Maassarani, 2011).
• Character is contextualised as the moral values and ethical choices demonstrated by

employees when becoming aware of wrongdoing (Green & Latting, 2004; Rest, 1986;
Zhang, Chiu & Wei, 2009).
• Motive is contextualised as the emotions that influence the intentions or reasons for
whistle-blowing related choices (Evans, 2008; De Maria, 2006; Schmader & Lickel, 2006)
• Situation is contextualised as the organisational factors that influence behaviours and

attitudes towards whistle-blowing (De Maria, 2006; Kaptein & Avelino, 2005; Hall, 2007;
Nonami, 2008).
• Prevention is contextualised as the aversion of further wrongdoing by reporting it to the

relevant stakeholders that are in a position to put a stop to it (Near & Micelli, 1985).
• Biographical is contextualised as the organisational employee variables such as age,

gender, religious beliefs, and levels of education amongst others.
Contextualisation of the intervening variable

Whistle-blowing is contextualised as the disclosure by employees of wrongdoing (Near &
Miceli, 1985). A more detailed definition of whistle-blowing is provided later in this chapter.
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1.6 Hypotheses
According to Babbie & Mouton (2010:643), a hypothesis is an expected outcome of
something in the real world if the literature is correct. It is also a statement that suggests a
certain relationship exists between two or more variables. For the sake of this study,
hypothesis testing is used to support or reject beliefs about variable relationships.
The hypothesis testing concentrates on equality by declaring null hypotheses and alternate
hypotheses. The hypotheses for this study are devised into two dimensions. The one
dimension focusses on the biographical dimensions of whistle-blowers while the other
dimension focusses on the variables that influence whistle-blowing.
These influences include factors such as trust relationships, organisational factors and
situational factors amongst others. In line with the research problem and objectives of this
study, the following hypotheses were formulated:
• Ho1: There is no statistical correlation between trust variables as determinants of whistle-

blowing.
• Ha1: There is a significant statistical correlation between trust variables as determinants

of whistle-blowing.
• Ho2: There is no statistical correlation between knowledge variables as determinants of

whistle-blowing.
• Ha2: There is a significant statistical correlation between knowledge variables as

determinants of whistle-blowing.
• Ho3: There is no statistical correlation between character variables as determinants of

whistle-blowing.
• Ha3: There is a significant statistical correlation between character variables as

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• Ho4: There is no statistical correlation between motive variables as determinants of
whistle-blowing.
• Ha4: There is a significant statistical correlation between motive variables as determinants

of whistle-blowing.
• Ho5: There is no statistical correlation between situation variables as determinants of

whistle-blowing.
• Ha5: There is a significant statistical correlation between situation variables as

• Ho6: There is no statistical correlation between prevention variables as determinants of

whistle-blowing.
• Ha6: There is a significant statistical correlation between prevention variables as

• Ho7: There is no statistical correlation between the biographical variables as

• Ha7: There is a significant statistical correlation between the biographical variables as

The hypotheses were formulated to be accepted or rejected in accordance with the findings
from the literature review and empirical results interpretation of this study. Unsuccessful
whistle-blowing clearly benefits no party involved in the process. The determinants of whistle-
blowing can greatly enhance the understanding of potential factors that can lead to whistle-
blowing and also how to deal with the process during and thereafter.
1.7 Literature review outline

The literature review section of this study will focus on the meaning and application of whistle-
blowing in terms of its use within a financial institution. It covers various academical
publications and books published in relation to the act of whistle-blowing, the motivational
reasons that influence the decision to blow the whistle, and the typical methods and channels
used to report wrongdoing.
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The researcher also focussed on the determinants of organisational failure to detect
wrongdoing and how group dynamics influence the potential whistle-blower. The documentary
sources used to obtain the secondary data include:
• Published academical journals and relevant published textbooks;
• Unpublished dissertations and theses;
• Official government reports and statutory acts of the Republic of South Africa; and
• Internet based sources.
The term whistle-blower often has negative connotations attached to it (Wigant in Devine &
Maassarani, 2011). While some exceptions might be true, the basic definition of a whistle-
blower construes aspects more closely related to ethics, virtue, honesty and integrity. It spans
aspects of morality, society and the law. The need to encourage whistle-blowers can be
motivated through statistics of how the widespread organisational wrongdoing occurs.
To illustrate the extent of the wrongdoing, the consulting firm KPMG found that nearly 75% of
employees have witnessed wrongdoing in some form during the past six months (Grimsley,
2000 in Miceli, et al. 2008).
Sources on the topic of whistle-blowing suggests that whistle-blowers are often ill-prepared
for the level and magnitude of what they will have to go through to justify the reasons for their
acts, and how often powerful leaders will vigorously defend themselves and the reputation of
their organisations.
As a result the whistle-blowers often lose their jobs and credibility due to a lack of
understanding of their organisational policies and procedures and the legal mechanisms
available for their protection (Malan, 2010: 11-12).
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1.7.1 Key terms and definitions
For the purposes of this study it is useful to clearly define the following key terms and explain
the context in which they are used in the study:
• Whistle-blowing in terms of reporting or disclosure;
• The person engaging in the act of whistle-blowing;
• Organisational wrongdoing;
• Employees and leadership; and
• Channels used to blow the whistle.
1.7.1.1 Definition of whistle-blowing (the act of reporting or disclosure)

Whistle-blowing is defined as “the disclosure by organisational members (former or current) of
illegal, immoral or illegitimate practices (wrongdoing) under the control of their employers, to
persons or organisations that may be able to effect action” (Near & Miceli, 1985:6). Any
reference hereafter to whistle-blowing should be viewed in the context of the reporting or
disclosure of the wrongdoing.
1.7.1.2 Defining a whistle-blower (the individual)

Dryburg (2009:156) makes reference to the work of Westin (1981) as to the description of
who whistle-blowers are and what actions they perform: “Whistle-blowers, as we know, are
employees who believe their organization is engaged in illegal, dangerous, or unethical
conduct.
Usually, they try to have such conduct corrected through inside complaint, but if it is not
corrected, the employee turns to government authorities or the media and makes the charge
public. Usually, whistle-blowers get fired. Sometimes they may be reinstated. Almost always
their experiences are traumatic, and their careers and lives are profoundly affected” (Westin,
1981:1).
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1.7.1.3 Defining organisational wrongdoing (the acts, activities or practices)
According to Miceli, et al. (2008:4) organisational wrongdoing is broadly defined as corrupt,
fraudulent, illegal, immoral or illegitimate practices. This definition does not limit the
wrongdoing to these behaviours only, as it also extends it to acts such a bullying employees
and misallocation of resources. Any reference to fraud, corruption, irregularities, and other
forms of illegal or immoral activities will collectively be labelled as wrongdoing hereafter for
the purposes of the study.
1.7.1.4 Defining employees and leadership employees

The study makes various references to the employees as individuals who are employed or
had previously been employed by organisations. It is important to note that the leadership of
organisations are usually also employees of the organisation.
Therefore, any reference to employees refers to the individuals that are not in powerful
leadership positions, and any reference to leadership refers to the individuals who hold senior
or executive positions within the organisation (they are associated with holding a lot of power
and authority). Whistle-blowers are also implied to be organisational employees, unless
clearly stated otherwise.
1.7.1.5 Defining whistle-blowing channels

The term “channels” in this study should be viewed in the context of the channels available to
whistle-blowers to disclose information about wrongdoing. These channels could be internal
organisational channels such as the disclosure via dedicated email addresses designed for
the purpose, and internal disclosure hotlines amongst others.
External channels refer to channels such as external anonymous tip-off lines, internet based
channels such as Wikileaks, and external organisations that specialise in the purpose to
combat wrongdoing and protect the rights of whistle-blowers.
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1.8 Research methodology outline
“Research methodology refers to the methods, techniques, and procedures that are employed
in the process of implementing the research design or research plan”. (Babbie & Mouton,
2010:105).
The study also wishes to observe and understand the factors that influence the employees to
act or not act as whistle-blowers within the organisation. The research design and approach
will provide a structure and systematic approach to test and observe the various factors that
impact on the employees who engage in whistle-blowing.
The findings of the study should enable the researcher to make appropriate inferences of the
influencers that encourage and discourage whistle-blowers. It would also provide insight into
the moral and ethical values of employees, and how their decision-making processes go to
work when faced with a situation that calls for whistle-blowing.
1.8.1 Method of the study

The proposed research method is quantitative research, aiming to discover if patterns and/or
causal relationships exist which in turn might shed light on the factors that impact on whistle-
blowing. This study also intends to explore the social actors (employees) within their natural
workplace.
1.8.2 Sampling
“In random selection, each element has an equal chance of selection independent of any
other event in the selection process”. (Babbie & Mouton, 2010:175). In light of the fact that the
population size is fairly large which necessitates the use of sampling, it is proposed that the
probability sampling method is used. Another reason for the emphasis on probability sampling
is the fact that the researcher is employed by the same business unit as the population
members, with the obvious potential for personal bias from the researcher.
- 17 -
The researcher has access to the complete list of the population members. The intended
study population is 1054 respondents. The most appropriate type of sampling to use would be
simple random sampling, as the respondents are from a large and known population. It would
also allow every member of the total population to have a known non-zero probability of being
included into the sample selection.
1.8.3 Data collection method and instrument

The researcher intends to use paper based questionnaires as the research instrument. The
intended sample of employees is very familiar with this approach as it is used extensively for
surveys and polls. Part of the reasoning for this approach is based on the fact that many of
the intended employees do not have access to computers or the internet to complete
electronic based questionnaires. The actual workplace of the intended population sample is
distributed throughout various processing centres across South Africa.
The questionnaire will be adapted from the KPMG integrity thermometer (diagnostic
instrument in the form of a specifically designed questionnaire) which has been successfully
used in many corporate organisations around the globe (KPMG, 2009). The adapted
questionnaire has been developed by fraud and white collar specialists from KPMG from
more than 150 real-world organisational environments in which wrongdoing occurs. These
real-world examples included various banks which make the adaptation of the thermometer
both relevant and applicable to this study.
The intended questionnaire will provide the researcher with an efficient and cost effective
means to reach the intended sample of respondents in a quick and anonymous fashion as the
respondents are located across South Africa. The questionnaire will be modified to cater for
the specific research objectives of this study. It will be designed to facilitate the ease of
statistical and analytical analysis to ensure accurate observations.
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1.9 Potential value of the research
This study is contributory to the growing body of knowledge related to the factors that move
employees to blow the whistle within their respective organisations. It is also hoped that
through this study some of the practical work-related considerations will be tested to provide
some guidance to potential future whistle-blowers who may not be familiar with the motivators
and typical predictors related to whistle-blowing from a personal perspective.
This work also aims to provide some situation context to the selected organisational
leadership by testing some of the situational predictors of whistle-blowing in order to better
understand the measures applied by the organisation during and after the fact, and how these
are perceived by the employees who blew the whistle.
This is especially true with regard to perceived retaliation tactics and how the organisation
needs to manage the reported issue at hand (the potential wrongdoing), whilst simultaneously
protecting the integrity of the organisation and the employee during the entire process.
The potential benefits of the research are:
• Exploration of the required leadership behaviours and actions that positively influence the
whistle-blowing culture within the business unit of the selected organisation;
• Identification of the values and ethics that influence the decisions of employees to blow
the whistle; and
• Recommendations as to enhance policies, processes, governance and whistle-blowing

systems of the selected organisation.
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1.10 Outline of the study
Chapter One: Introduction and background to the study

This chapter provides an introduction and background context to the topic selected with
reference to real-world examples of famous whistle-blowing cases. The rationale for the study
is discussed and a review of the study purpose, the research problem, the primary and
secondary objectives, the hypothetical points of departure and the potential value of the study
are provided.
Chapter Two: Financial industry and banking sector overview

This chapter provides an overview of the financial industry and focusses on the various
regulatory, strategic, technological and people aspects of the industry that pose the bulk of
from a whistle-blowing perspective. It also highlights the structure of the financial industry in
terms of the various bodies that regulate it.
Chapter Three: Organisational and business unit overview

This chapter provides an overview of the selected organisation’s (Bank X) specific business
unit (CS). It further provides a brief overview of how CS deals with matters related to whistle-
blowing in terms of policies, procedures and governance. It also presents a brief overview of
the potential legal protective measures available to whistle-blowers.
Chapter Four: Literature review and theoretical study

This chapter provides an outline of selected literature sources applicable to the selected topic.
It investigates the personal, moral, emotional, organisational failures and group dynamic
related factors that can positively or negatively influence the process of whistle-blowing and
the actions of the whistle-blowers before, during and after becoming aware of organisational
wrongdoing.
- 20 -
Chapter Five: Research methodology and approach
This chapter provides an overview of the research design, approach and rationale of the
methodology used to perform the research. It also presents the various aspects related to the
design methods, proposed research instruments and proposed methods of data sourcing and
analysis. It concludes with a discussion of the data validity and reliability and covers any
ethical considerations related to the research.
Chapter Six: Results presentation

This chapter presents the results from the empirical research. It presents the biographic
information as well as the descriptive statistics in terms of the factor analysis and subsequent
validity and reliability analysis results.
Chapter Seven: Results interpretation

This chapter provides an interpretation of the presented results. The findings are discussed
and interpreted in terms of the hypothetical points of departure and suggestions from the
literature review. It also provides a tabular overview in this regard. The chapter concludes with
the listing of the possible limitations of the study.
Chapter Eight: Conclusions and recommendations

This chapter provides the conclusion of the study through a summary of the research
objectives and an analysis of the findings of the empirical results interpretation. It provides the
key findings of the research in line with the primary and secondary purposes of the study. It
concludes with recommendations and suggestions for future research purposes.
- 21 -
1.11 Summary and conclusions
This chapter of the study paints a picture of the magnitude of organisational wrongdoing in a
global and South African context by highlighting some of the famous cases of whistle-blowing
over the past decade.
It quantified in monetary terms the value and consequences of these wrongdoings and the
impact thereof on the organisational shareholders, the employees, their families and
ultimately the societies they all live in. The rationale, purpose and value of the study are
emphasised to provide a basis for the selection of the literature review and selected
organisation on which to perform the observational social research.
The next chapter will provide a more detailed overview and context of the financial industry
and the banking sector within this industry. It investigates the governance structures of the
industry and highlights some of the current aspects that the banking industry in particular is
dealing with.
This is both relevant and supportive of the problem statement and research objectives as it
relates to a major bank within the financial industry.
- 22 -
2 CHAPTER TWO: FINANCIAL INDUSTRY AND BANKING SECTOR
OVERVIEW
"I sincerely believe ... that banking establishments are more dangerous than standing armies, and
that the principle of spending money to be paid by posterity under the name of funding is but
swindling futurity on a large scale."
- Thomas Jefferson to John Taylor, 1816.
2.1 Introduction
This section of the study provides a brief overview of the regulation of the financial industry in
South Africa and how relevant the topic of whistle-blowing is to this industry in general. The
banking sector within the financial industry is discussed in more detail, with specific focus on
the following aspects:
• People aspects
• Technological aspects
• Regulatory and compliance aspects
• Strategic aspects
South Africa has a very good financial service industry largely due to the sound regulatory
and legal framework. This sector compares favourably with the best in the world, and in most
instances are at a leading edge in terms of ease of use, accessibility, security and
technological platforms. Many large international firms use South Africa as an economic hub
to transmit and manage all their financial entries in Africa and other parts of the globe. “The
importance of designing and maintaining an efficient and effective system to regulate financial
markets, financial institutions and financial service providers lies at the very core of a nation’s
economic wellbeing.” (Marcus in Falkena, Bamber, Llewellyn, & Store, 2001:3).
- 23 -
The Financial Services Board (FSB) oversees the regulation of financial markets and
institutions, including insurers, collective investment schemes and trusts. Exchange controls
are adequately relaxed, making the repatriation of dividends and funds to holding companies
relatively easy. As a result, foreign banks are well represented in South Africa. The
distribution footprint and reach in terms of banking branches and ATMs are extensive and
provide excellent channels for most clients of the financial services industry.
The South African Reserve Bank (SARB) oversees the regulation of Banks in South Africa.
The banking sector within South Africa is in good strong shape as it is very tightly controlled
and monitored by the SARB to ensure the economic stability of the country and
simultaneously protect the investments and savings of the public.
The banking sector is instrumental in promoting economic growth in South Africa and the sub-
Saharan region in particular, as it enables and facilitates trade, payments and transacting in
general. It also provides much needed credit facilities to multiple sectors in the form of short
and longer-term finance.
There are various other associations and industry forums that play a role in governing, co-
ordinating and enabling the banking industry. These include the Payments Association of
South Africa (PASA), The Banking Association of South Africa (BASA), Bankserv, South
African Banking Risk Information Centre (SABRIC) among others.
Banking on a global scale has experienced subdued growth largely due the financial crisis as
discussed in Chapter 1 of this study. This has dramatically changed the competitive
landscape as banks continuously aim to derive more income from transitional based products
as oppose to lending type products.
- 24 -
Figure 3 depicts the banking sector market leaders per product category since 2005:
Figure 3: Banking sector market leaders 2005 - 2011
Source: Adapted from PWC survey on banking in SA (2011:10)
Note - * = not rated in that year
- 25 -
Other background statistics of the banking sector:
Table 1: Banking sector background statistics
Index (as at 2011) Total Banking Sector Big Four Banks Big Four Bank as %
No of Employees 149,612 128,000 85.56%
No of Bank Branches 4000* 2740 68.90%
No of ATM’s 23000* 21000 91.3%
No of Retail Customers 40 million* 34.5 million 86.25%%
Source: Adapted from PWC survey on banking in SA (2011:11)
Note
The statistics as reflected in Table 1 equals the cumulative representation of the 20
participating banks in the survey. The * indicates an estimation only as these statistics are not
available in the public domain for the 20 participating banks. The following section of the
study provides a brief summary of the key challenges, opportunities, risks and threats that are
facing the banking sector of the financial service industry as a collective.
2.2 People aspects

This section of the banking sector is closely related to all other issues, as it is people who
deliver banking to customers, provide support and assistance, and resolve issues on their
behalf. It is also people who choose or refrain from reporting wrongdoing when it is observed.
One of the major challenges for the banking sector and the financial services industry as a
whole is to foster a culture that promotes whistle-blowing and advocates the combating of
wrongdoing in all forms and shapes in which it might occur.
- 26 -
Some of the current people aspects facing the banking sector are:
• War for talent.
• Financial Service Charter target in terms of demographic composition of workforce.
• Skills base and experience curve of risk specialists.
• Skills base and experience curve of quantitative expertise.
• Balance between short-term remuneration and longer-term incentives.
• Internal collusion with criminal syndicates and other initiators of wrongdoing.
One of the major challenges for the banking sector and the financial services industry as a
whole is to foster a culture that promotes internal whistle-blowing and advocates the
combating of wrongdoing in all forms and shapes that it might occur. This links back to the
technology aspects as discussed, as employees can with increasing ease, post any of the
perceived wrongdoings on a variety of external social internet platforms anonymously.
2.3 Technological aspects

The internet provides a fantastic platform for whistle-blowers to announce perceived
wrongdoing as it provides some form of anonymity. To illustrate this example, an anonymous
person posted the following note on the Yahoo’s stock board four months prior to Sherron
Watkins’ internal whistle-blowing memo: “It will soon be revealed that Enron is nothing more
than a house of cards that will implode before anyone realizes what happened. Enron has
been cooking the books with smoke and mirrors.
The Enron executives have been operating an elaborate con scheme that has fooled even the
most sophisticated analysts…The first sign of trouble will be an earnings shortfall followed by
more warnings. Criminal charges will be brought against ENE executives for their misdeeds.
Class action lawsuits will complete the demise of ENE. Get out now while you can.” (New
technology issues for corporate governance: internet message boards).
- 27 -
Some of the current technological aspects and challenges facing the banking sector are:
• Prevalence of old legacy mainframe type systems making new developments both costly
and slow.
• Availability and cost of bandwidth.
• Unavailability of integrated settlement platforms for mobile and tablet device type
transactions for the banking sector as a whole.
• Managing the risk, security and fraud controls of the IT systems and platforms.
• Integration challenges across internal systems.
• Strategic partnerships between the banks and leading IT companies.
• Availability of specialised IT skills.
A prime scenario of the risk of fraud committed on the banks IT systems is the very recent
example of the Postbank fraudulent heist. It was proven that two of the criminals were
employees of Postbank who worked in the call centre (Chauke, 2012). This example again
illustrates the importance of incentivising and promoting a culture of whistle-blowing in an
organisation, as there is always the chance that some of the other employees could know
about the incident. According to PWC (2011:38), another major technological challenge for
the banking sector is how to deal with the extensive occurrence of card related fraud,
including debit and credit cards.
2.4 Regulatory and compliance aspects

“Over time it has become abundantly clear that regulatory arrangements have a powerful
impact on the (i) size, structure and efficiency of a financial system; (ii) the business
operations of financial institutions and markets; and (iii) competitive conditions both overall
and between subsectors of the system” (Falkena, et al. 2001).
- 28 -
Some of the current regulatory and compliance aspects facing the banking sector are:
• Basil III liquidity compliance related issues (as a direct result of the global financial crisis).
• King III corporate governance related issues.
• Impact of the Sarbanes Oxley Act of 2002.
• Impact of the International Financial Reporting Standards (IFRS) regulations of 2005.
• Impact of the new National Credit Act of 2005 and the national consumer protection act of
2011.
• Impact of the new Companies Act of 2008.
• Impact of the Money Laundering Regulations of 2007.
• Impact of the Financial Intelligence Centre Act (FICA) of 2001.
• Impact of the Regulatory Enforcement and Sanctions Act of 2008.
The more regulatory compliance issues the financial industry has, the more the business
models and processes have to be amended to comply with the aforementioned acts. Failure
to do so can result in substantial financial and reputational penalties. The plethora of
compliance aspects necessitate a huge amount of investment from the players in the financial
services industry which only puts more pressure on the cost to income ratios of these
organisations. In light of this it is increasingly important that these organisations promote a
culture of whistle-blowing as it can dramatically reduce the risk of wrongdoing in terms of non-
compliance.
It would be far better for these organisations to expose wrongdoing in terms of non-adherence
through their own internal employees, as opposed to the regulators and law enforcers of the
markets in which they operate.
- 29 -
A recent practical example of the substantial fines payable for non-compliance is the
international case of Barclays Plc. Barclays was fined (and agreed to pay without any
resistance or legal mitigation) $298 million to US authorities for contravening the Regulatory
Enforcement and Sanctions Act of 2008 (Clark, 2010). It is also interesting to note Barclays is
still involved in a legal battle after it apparently dismissed an employee for reporting a tax
avoidance scheme that the organisation was involved in (Lawrence, & Leigh, 2009).
2.5 Strategic aspects

A prime example of whistle-blowing within a banking organisation that relates back to
strategic aspects, is the example of Banks in India that provide credit on a community based
management principle. This eliminates the necessity of endless credit applications, security
instruments and associated controls and to a large extent enables the banking of the
unbanked. This business model of course is heavily dependent on the community to blow the
whistle on any perceived defaulters (people who do not pay their loans). The South African
banking sector is not geared to operate on the same basis, and as a result will not be able to
reach the unbanked in the same manner as in the example of the Indian banking sector. This
principle is also very true of local banks that wish to enter large countries in Africa such as
Nigeria.
Some of the current strategic aspects impacting on the banking sector are:
• Political instability.
• Slowdown in consumer spending due to declining economic cycles.
• Sovereign risk rating by international rating agencies such as Fitch, Moody’s and Standard
and Poor, as this influences the ability of the banking sectors to obtain and secure funding.
• Increased rate and level of regulation and compliance (Basil III and Sarbanes Oxley
among others).
• Postbank becoming a fully-fledged bank.
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• Banking the unbanked population.
• Rigid South African labour laws making it difficult to lay off employees.
• Increased pressure on cost to income ratios.
• Increasing number of competitors.
• Increasing levels of disintermediation.
It is interesting to note that major technology players such as Apple and Facebook are
currently underway in developing payments facilitation through the respective technologies.
This forms part of the disintermediation of banks (competing with electronic and mobile
banking) and are based upon the principle that most payments are made to your friends and
family who are most probably linked to you (as the payment originator) on the various social
media platforms. This strategic aspect again links back to the people and technology aspects
of the banking sectors as it will seamlessly provide users with external channels to disclose
perceived wrongdoing by banks, such as overcharging and hidden costs.

The economic downturn that started in 2008 in the financial industry’s banking sector was
largely driven by the exposure of banks that mortgaged funds to mostly non-creditworthy
clients by accepting their properties as guarantees for the mortgages. This in turn was driven
by the greed of bankers to achieve targets and outperform income projections that would
ensure huge bonuses and incentives.
This chapter presented the structure and regulation of the financial industry and provides
insight into the most topical challenges that the banking sector is facing currently and how
these relate back to the notion of whistle-blowing. The next chapter presents on overview of
Bank X and its CS business unit, and how they manage aspects related to whistle-blowing
polices. It also discusses the legal protective measures that are available to their employees.
- 31 -
3 CHAPTER THREE: ORGANISATIONAL AND BUSINESS UNIT
OVERVIEW
“It's easy to blame ordinary people for borrowing and spending too much, but what human being
isn't going to be tempted by credit? ...I knew what was going to happen to the banking economy...
ordinary people were over-extending themselves with loans they should never have been given! ...
I felt like a man in a rowing boat trying to stop the Titanic heading for the iceberg”.
- Paul Moore (2009)
3.1 Introduction
The above quotation by Moore was a comment he made when interviewed about how he felt
after attempting to caution (via whistle-blowing) British authorities about the risks of the
financial exposure of British Banks to the American sub-prime issues that have been proven
to be closely related to the global economic downturn of 2008. It therefore makes sense to
perform the real work testing of the hypotheses of this study within a similar financial
institution.
This chapter of the study introduces Bank X and CS, and provides a brief overview of the
policies and procedures of CS in terms of whistle-blowing. It also presents some of the
statutory and legal protective mechanisms available to whistle-blowers and how whistle-
blowing is practically managed in the normal day-to-day functioning of the business. It is
important to note that Bank X is a major bank in terms of South African market share, which
makes its selection rather representative of the intended research.
The CS business unit of Bank X operates in a high-risk environment (both physical risk and
fraudulent risk) in dealing with large amounts of physical cash, and is therefore intrinsically
exposed to various wrongdoings (and the subsequent whistle-blowing of perceived
wrongdoings) due to the inherent nature of its business.
- 32 -
3.2 Organisational overview and context
Bank X is listed on the Johannesburg Stock Exchange and operates under one of the most
recognised brands within South Africa. Bank X consists of many business segments and
functional divisions that provide banking and financial services to clients across the spectrum.
This includes individuals and businesses ranging from small entrepreneurial start-ups to large
multinational conglomerates and offers a complete range of banking, assurance and wealth
management products and services to their customers. For the sake of this study, the
research is further limited to focus on one of the business units within the organisation.
Figure 4 illustrates the segmentation of the business structure of Bank X, with specific
reference to where CS fits into this structure:
CS is
segmented
into here
Figure 4: Segmentation of the business structure of Bank X
Source: Adapted from Bank X annual report (2009:6)
- 33 -
CS manages the physical cash related business of the organisation and generates revenues
in excess of R1bn per annum, with a total human resource compliment in excess of 1000
employees. The operational nature of CS involves the handling, processing and distribution of
large amounts of physical cash. It is therefore inherently exposed to wrongdoing through
physical theft, accounting fraud and potential collusion with criminal syndicates to engage in
corrupt activities.
Figure 5 depicts the leadership reporting structure of Bank X with specific reference to the
reporting lines of the executive leadership of CS:
CS leadership
reports into here
Figure 5: CS Leadership reporting structure
Source: Adapted from Bank X internal organogram (2012:1)
- 34 -
CS is responsible for the processing of all cash received from the customers of the
organisation at various cash processing centres across South Africa. CS validates, sorts,
packs and redistributes this cash back into thousands of Automatic Teller Machines (ATMs)
nationally, and interacts directly with the South African Reserve Bank to order, replenish and
manage the entire cash value chain.
CS deals primarily with a commodity, (physical cash) that through the nature of the business
is exposed to very high levels of risk, fraud and violent crime. On this basis it is therefore
deemed appropriate that this study is conducted within CS of the selected financial institution.
3.3 Whistle-blowing policies overview

As a first action, CS leadership advocates whistle-blowing by employees to their direct
manager when they suspect or become aware of wrongdoing. CS has a formal whistle-
blowing policy published on the organisational intranet which stipulates the formal processes
and actions should an employee desire to blow the whistle. CS also has a dedicated external
fraud reporting channel (via an external hotline) that is operated and managed by a respected
external auditing organisation on behalf of the larger organisation.
This enables employees of CS to report wrongdoing in a completely anonymous fashion. The

external auditing partner then provides the reported cases to the internal investigative unit of
the group financial crime unit of the organisation, which reports to the executive leadership
structures of the organisation. The organisation governs the process of disclosure by means
of a formal attestation that has to be completed by the line manager of the employee who has
blown the whistle. These attestations are in turn monitored and reported upon by the internal
audit function within the organisation.
- 35 -
The following formal internal documents (relating to the governance of whistle-blowing
policies and procedures) of Bank X were reviewed as part of the study:
• Policy regarding employee disclosure;
• Employee compliance alert notification; and
• Anonymous tip-off brochure to employees. The whistle-blowing channels for employees

were not available to external customers, and vice versa.
This was designed to protect the internal employees and to assist the investigative
department of bank X to quickly differentiate between internal and external whistle-blowers.
The main objective of the policy is incorporated in the desire that no employee may be
subjected to any occupational detriment by his or her employer on account, or partly on
account, of having made a protected disclosure.
3.4 Statutory and legal protection available to whistle-blowers

A primary consideration for potential whistle-blowers in CS (and South Africa in general) who
intend to blow the whistle is the protection that legal mechanisms afford them in the event that
the organisation (through leadership) engages in retaliation tactics. Statutory protection also
plays a vital role in shaping the internal policies and procedures within the selected
organisation that in turn shape the internal culture and attitude towards whistle-blowing in CS.
This study does not analyse the full extent of the statutory protections, but endeavours to
provide a summary overview of these measures. The statutory protection rights of whistle-
blowers in South Africa are provided by, amongst others, The Protected Disclosures Act, 26
of 2000. This act makes provision for the protection of the whistle-blowers in 3 main areas:
- 36 -
1. To protect an employee against subjection to occupational detriment (lose his/her job);
2. To provide for certain remedies in the event of being subjected to occupational detriment
(retaliation); and
3. Provide procedural guidelines to responsibly blow the whistle.
According to Holtzhausen (2007:66-73), some of the other main South African legislative
protection measures intended to provide formal protection for whistle-blowers include:
• Prevention and Combating of Corrupt Activities Act 2004 (Act 12 of 2004)
• Promotion of Access to Information Act 2000 (Act 2 of 2000)
• Corruption Act 1992 (Act 94 of 1992)
• Investigations into Serious Economic Offences Act 1991 (Act 117 of 1991)
• Public Service Act (Act 103 of 1994)
• Reporting of Public Entities Act (Act 93 or 1992)
• Constitution of the Republic of South Africa 1996
• Audit Act 1992 (Act 22 of 1992)
Changes to the Promotion of Access to Information Act 2000 have recently been tabled at the
South African Parliament to allow the State to refrain from disclosing information it considers
as sensitive and confidential. This has triggered a huge public outcry as it is deemed to be in
direct contrast with the principles of transparency, openness and good corporate governance.
This recent development is not further explored in this study, but could provide an interesting
basis for future social research. Section 806 of the Sarbanes-Oxley Act of 2002 also provides
protection for whistle-blowers in the sense that it imposes heavy penalties and criminal
charges for any organisation that retaliates towards internal whistle-blowers.
- 37 -
3.5 Day-to-day management overview of whistle-blowing
The following section provides a summary of the sequence of events (as part of practical
management of whistle-blowing) when an employee engages in the act of whistle-blowing in
CS:
• Employee becomes aware of perceived wrongdoing.
• Employee discusses perceived wrongdoing with line management.
• If the employee does not perceive the reported wrongdoing to be addressed by line
management, it is escalated to senior management or the risk and compliance
departments, depending on the seriousness of the perceived wrongdoing.
• If deemed appropriate, the disclosure can also be made to the anonymous tip-off line
managed by external service providers on behalf of Bank X.
• Such disclosures are recorded electronically, then password protected and then forwarded
to the investigative unit of Bank X.
• The investigative unit takes the necessary steps to ensure that management’s
responsibilities are executed in terms of preventing employees from experiencing
occupational detriment.
• All reported disclosures are given a unique reference id in order to track and monitor
progress on the matter.
• If the external tip-off line was used to report the wrongdoing, the external party managing
this function on behalf of Bank X will forward the password protected case with unique
reference number to the group compliance administrator of Bank X.
• The protected disclosures (whistle-blowing) processes are managed by the compliance

department of Bank X and the investigative processes are conducted by the group
financial department of Bank X.
- 38 -
• The group compliance and finance departments can refer any of the cases to the crime
management and group human resources departments if deemed appropriate.
• In some instances, cases are referred directly to Bank X’s business areas from time to
time (as would be the case for CS).
• All disclosures made to line or any other level of management are considered and
managed as protected disclosures.
• All disclosures received are divided into specific categories for reporting purposes e.g.
fraud, collusion, negligence and theft.
• These reporting categories dictate whether the investigation is expedited and prioritised
above other disclosures.
• Certain matters are required to be sent to third parties for investigation from time to time.
These matters are tracked directly with the investigating personnel.
• All matters are reported on a monthly basis, with matters that have an open status that is
deemed of serious nature, escalated to the group executive of Bank X.
• All matters older than 120 days are reported in detail in this report as distributed to the
audit and compliance committees of the board of Bank X.
• A monthly chief executive report is compiled to track inter alia the number of reports
received and investigated and the number of matters resolved. The same information is
compiled into a quarterly report for the audit and compliance committees of Bank X.
• All disclosed matters are archived, backed up and sent to an external service provider for
safekeeping.
It is clear from the above information that there is a rigid and comprehensive process to
manage disclosures of perceived wrongdoing. However, little evidence could be found in
these formal processes stipulating efforts to promote and encourage employees to act as
whistle-blowers. It focussed all efforts on the “how to”, and very little on the “why it is
important and necessary” elements of whistle-blowing.
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This chapter provides a basis for understanding the nature and function of the employees of
Bank X and how CS operates within their natural working environment. It further provides
some insight into the policies and procedures related to whistle-blowing in CS, including the
legal measures available to protect the employees if and when they decide to act as whistle-
blowers. It concludes with the detailed day-to-day management of disclosures made to report
perceived wrongdoings.
The next chapter will provide an overview of the applicable literature on the topic of whistle-
blowing and investigate the role that values, personal characteristics, motives and group
dynamics play in relation to whistle-blowing.
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4 CHAPTER FOUR: LITERATURE REVIEW AND THEORETICAL STUDY
“to generate and understand knowledge is an integral part of what makes us human beings”
- Earl Babbie and Johan Mouton
4.1 Introduction
This chapter of the study provides a brief summary of various academic journals, books and
published reports that provide insight into the definition of whistle-blowing and the factors that
relate directly or indirectly to whistle-blowing. The term whistle-blowing originated from the
practice of British police officers who blew their whistle to alert the public when they saw an
illegal or threatening action taking place (Eaton & Akers, 2007 in Malan, 2010:3-4). The term
whistle-blower in the sense of an organisational employee is first described by Clinard as
someone who exposes corporate criminal behaviour (Clinard, 1979). Whistle-blowing can be
open (disclosing one’s identity) or anonymous. It can also be done within the internal
channels of the organisation or through external channels such as newspapers, internet
based channels or even written disclosure to the authorities.
Collective research related to the term wrongdoing covers topics as broadly as white-collar
crime, illegal behaviour, fraud and misuse of organisational assets. Recent commercial
developments have added disclosure of sensitive information to form part of wrongdoing, for
example the disclosing of customer pricing or product costs to external parties. The deeds or
actions related to wrongdoing can also be classified into the actions of the individual and the
actions of the organisation (Hansen, 2009:29-31). Examples of organisational wrongdoing
include the misrepresentation of facts (such as actual profits in the case of Enron), collusion
to exploit consumers or customers through price-fixing as in the recent case of Tiger Brands
(Seria, 2007), or abuse of the environment as in the case of the oil company Chevron which
was fined $8.6 billion for pollution of the Amazon region (BBC, 2011).
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Table 2 illustrates some of the pressures that can lead to fraudulent activities.
Table 2: Typical pressures that can lead to fraudulent activities
Financial pressures Work related pressures Other pressures

Greed Unfair remuneration: real or Ambition or need for power
perceived or control
High levels of personal debt Lack of promotion Low self-esteem
Living beyond one’s means No recognition of performance Family or peer pressure
Inadequate income Unethical practices by Emotional instability
management itself
Bad investments Lack of job stability No fear of retribution or enjoying
the challenge of “beating the
system”
The need to support addictive behaviour, Over-aggressive bonus plans Disintegration of social values
e.g. drug and alcohol abuse or gambling
Source: Adapted from Viviers and Venter (2008:52)
The presumed value of whistle-blowing actions for employers and society in general must be
balanced against the potential negative personal consequences for the whistle-blowers
(Holtzhausen, 2007:2). The work of Shapiro (2001) argues that the focus on the prevention of
wrongdoing (through whistle-blowing) should be more on the environment that is conducive to
wrongdoing, rather than the individual. This is done mostly by regulatory and compliance
controls that impose heavy financial and other penalties on the organisations that are found
not to adhere to ethical and responsible activities.
It is therefore important to remember that whistle-blowers can sometimes report on actions

that are not illegal or even unlawful, but which may be deemed unethical. A practical example
is the deception of customers through misleading advertising or promotions. From the above
example it is clear that a fine line exists between what is ethically and morally acceptable from
an individual and organisational point of view and how that compares with the boundaries of
the law in terms of illegal or unlawful activities. Some whistle-blowers can be classified as
deliberate whistle-blowers.
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Examples include informants who are specifically placed in organisations to uncover
wrongdoing and gather evidence of wrongdoing, or even agents of the law or the authorities
(such as undercover policemen). The motivational reasons for a whistle-blower to disclose a
wrongdoing are also an important factor of consideration as some motives are positive, such
as those linked to values and beliefs, while some motives are negative such as those linked
to revenge and other hidden agendas (Mbatha, 2005:172).
The concepts related to the determinants of whistle-blowing span the spheres of business
management, psychology, ethics, legal and even human relations. It is therefore practically
impossible to thoroughly review all the literature across these spheres. The literature study
therefore focusses more specifically on the following aspects that are deemed key influencers
of whistle-blowing behaviours:
• Personal characteristics of whistle-blowers;
• The role of ethical values or belief frameworks of whistle-blowers;
• The motives and emotions of whistle-blowers;
• Determinants of organisational failure to detect wrongdoing; and
• The role of group dynamics and corporate structures in whistle-blowing.
4.2 Personal characteristics of whistle-blowers

The personal characteristics of a typical whistle-blower are best described in the meta-
analysis of various literatures by Green and Latting (2004:221). A summary of the key
characteristics include:
• They are generally altruistically motivated with the intent of their actions to benefit those
who are being wronged.
• The have a high level of moral self-development and are driven by a sense of integrity and
a social responsibility to speak out.
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• They are not prone to succumb to group or peer pressure (act consistently).
• They trust in their attitudes and beliefs (will not lie to cover up) to guide their actions.
• They are well educated with good record keeping skills.
• They hold professional or managerial positions.
• They have high level of personal drive.
• They are more likely to be female than male.
The personal characteristics described seem consistent with those of the individuals
mentioned in the famous cases as described in the introduction section of this study (Watkins,
Cooper, Addison, and others). It is again important to note that although these characteristics
seem noble and virtuous, it does not protect the whistle-blower from the stressful and often
painful circumstances that whistle-blowers find themselves in during the process and after the
fact.
The above characteristics are consistent with formulation of Ho3 and Ha3 of this study. The
research questions of this study therefore attempt to practically analyse these characteristics
in the selected organisation in order to evaluate if they can act as predictors as to who will act
as whistle-blowers within an organisation.
4.3 The role of ethical values and belief frameworks of whistle-blowers

The work of Rest (1986) explains the psychological processes that motivate the moral
behaviours and actions of individuals. These are defined in a basic four step process:
1. Ethical sensitivity discovers that an ethical dilemma exists.
2. Ethical reasoning arrives at a prescriptive judgement to an ethical dilemma; ethical
intention formulates.
3. Intention to either comply or not comply with his or her ethical judgment.
4. Ethical behaviour is a function of the decision maker’s ethical choices and personal ethical
character (Zhang, Chiu & Wei, 2009:628).
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Greene and Latting (2004:228) urge potential whistle-blowers to guard against being
governed by raw emotions such as anger, shame or guilt. Instead, one should be guided by
one’s own ethical principles that guide one’s professional behaviour. The dilemma with this
plea is: What if the individual does not have a well formed framework of ethical values and
beliefs or principles? What constitutes as high or low ethical values?
The work of Elias (2004:95) investigated this ethical dilemma of personal ethical values
versus financial incentives and how these could entice leadership and employees (with low
ethical values) to act or participate in wrongdoing to achieve performance targets, that are
linked to monetary incentives, or similar organisational rewards such as annual bonuses and
share options that can be redeemed in the future.
The work of Sadler and Barac (2005:124) proposed that raising the awareness of ethical
behaviour could improve the ethical behaviour of financial professionals at the workplace,
although this area required further study to prove the statistical correlation of their proposal. It
is interesting to note that in most of the famous whistle-blowing examples noted in the
introduction section, the auditing professions that rendered services to those organisations
never blew the whistle on any wrongdoing. It can of course be debated if they had actually
known of the wrongdoing.
It can also be speculated that this behaviour could have been as a result of the concern of
losing the auditing contracts from these organisations. On the other hand, it could have been
out of ignorance, but this notion is rejected as it would be in direct contrast with professional
credibility of the auditing professional’s technical expertise. Ultimately, the ethical values and
beliefs of the individuals who participate in the wrongdoing and the individuals who report
such wrongdoing both influence the process and manner in which the whistle-blowing
transpires and comes to a conclusion.
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4.4 Typical motives and emotions of whistle-blowers
The key emotions that influence the motives of whistle-blowers are trust and fear. This is
consistent with the work of Evans (2008:271) who found that this fear is mostly driven by a
lack of trust in the legal protective measures available to whistle-blowers, and the potential for
retaliation from organisational leadership.
De Maria (2006:653) found that when employees act as whistle-blowers they put their health,
jobs, lives and relationships at stake. The risk of whistle-blowing thus has the potential to
invoke a range of powerful emotions which in turn influences the motives of whistle-blowers.
These motives are often suppressed resulting in the decision not to not act as whistle-blowers
due to the obvious risks and dangers involved as discussed above.
According to Schmader and Lickel (2006:45-47), shame and guilt emotions also drive
behavioural aspects of approach and avoidance. These emotions typically only apply to the
employees’ own transgressions that cause the feelings of guilt and shame. However, it does
provide insight into why employees might be hesitant to act as whistle-blowers of
wrongdoings of others, due to the feeling that they might also have also participated in some
form of wrongdoing in the past.
The work of Zhang, et al. (2009:630) found that if an employee had a positive organisational
experience from a whistle-blowing incident, they are more likely to blow the whistle in the
future. It is therefore proposed that a positive organisational mood can also positively
influence employees to act as whistle-blowers.
Edmondson and Munchus (2007:755) argue that the level of dissent employees experience
when they detect wrongdoing, influences their motives and emotions related to whistle-
blowing. These emotions range from keeping silent to blasting the organisation in a negative
light. Finally, Dryburg (2009:158) suggests that the advancement of the interests of society is
another powerful motive that drives employees to act as whistle-blowers.
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The typical motives for employees to act as whistle-blowers are mostly associated with their
observation of some form of wrongdoing. Once the observation has been made, the ethical
values and belief system of the individuals will drive their behaviour to either condone or
reject the acceptability of the wrongdoing.
Additional motivational and emotional factors then play a pivotal role to determine the extent,
manner and process they will follow in disclosing the wrongdoing. Some of these include:
• Are they in a trust relationship with their line manager or other senior management?
• Are they familiar with the organisational procedures that govern the disclosure of
wrongdoing?
• Are they emotionally connected in any way with the individual/s who committed the
wrongdoing?
• Has the individual committed any form of wrongdoing in the past, therefore the feelings of
guilt and shame preventing them from disclosure?
• Are there any forms of revenge or vengeance that play a motivational factor in their
disclosure?
• Do the whistle-blowers sense any form of retaliation which out of fear will then restrict
them from disclosing?
• Are there any personal rewards, recognition or financial gains at stake for the individual/s
reporting the wrongdoing?
• Do they trust the organisational leaders to swiftly correct the wrongdoing in a fair and
transparent fashion?
The above factors form a picture of the typical emotional determinants that influence the
choices these employees will consider after they have been exposed to some form of
wrongdoing.
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Their perception of the outcome of some of these choices will greatly influence their decision-
making rationale in choosing to disclose, how they should disclose, when they should
disclose, and to whom they should disclose the wrongdoing. It will also influence the channel
they choose to disclose (internal or external) and if the disclosure will be anonymous or
named.
4.5 Determinants of organisational failure to detect wrongdoing

Svennson and Wood (2004:321) propose that one of the main reasons why the organisation
fails to detect internal irregularities, is the practice of leadership to scan the external market-
place regularly to interpret the economic climate and the factors that can influence the
profitability of the organisation. The same internal scanning to analyse and interpret the mood
and culture of the organisation is performed far less, resulting in the potential to neglect early
warning signals of corruption within the organisation.
De Maria (2006:649) observed that the procedural correctness (bureaucracy) of whistle-

blowing overshadows the intention to expose wrongdoing which in return provides further
insight into the discouragement factors of why some individuals will not blow the whistle, even
if they have good reasons to do so. Ultimately, that organisational policy and the
familiarisation of the policy is the responsibility of leadership and employees individually and
jointly.
The delegation of this responsibility to the employee level is evidence of a negative leadership
attitude towards whistle-blowing in the organisation, which in turn contributes to organisational
failure to detect or properly manage whistle-blowing policies within the organisation. Kaptein
and Avelino (2005:46) suggest that the leadership of an organisation has a direct impact on
the culture and the attitudes of the employees. Comprehension levels of the organisational
code of conduct charter and the regular measurement and reporting of whistle-blowing
statistics are indicative signs of a positive leadership attitude towards whistle-blowing.
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However, if leadership simply designs the internal measures to report wrongdoing without
vigorous monitoring and encouragement, it is deemed to be the same as investing in stock
without monitoring its actual performance. A leadership approach of “no news is good news”
is indicative of a negative attitude to whistle-blowing. Not knowing about wrongdoing is just as
bad as hiding the wrongdoing, as illustrated by the bread price fixing scandal that rocked
Tiger Brands and resulted in an R98.6m penalty imposed upon the company by the
Competitions Commission of South Africa (Hill, Planting & Naidoo, 2009:11).
Hall (2007:102) noted that the Enron leadership enjoyed an almost fanatical type loyalty from
their employees, which in turn resulted in a lack of debate and constructive criticism from the
senior managerial levels within the organisation, which in turn is not conducive to an
environment and culture where whistle-blowing is embraced and promoted. The case of
Enron is consistent with the work of Rothwell & Baldwin (2006:34) who found that even if
employees observe wrongdoing, they seldom report it due to conflicting organisational
policies and cultures in as much as being loyal to the organisation and their fellow employees.
This in effect encourages a code of silence as opposed to a code of transparency and
disclosure.
The organisational practices in terms of recruitment policies have a large influence on the
type of individual who gets hired. If the practices are designed to ensure that the potential
candidates will ensure maximum loyalty to the organisational authorities (therefore creating a
culture where everyone just says ‘yes’ to the bosses without ever questioning the status quo),
it will greatly reduce the probabilities of employees reporting wrongdoing as it would be
perceived as being disloyal and out of fear of retaliation. These examples are typical
characteristics of organisations that fail to detect wrongdoing and it illustrates that some of the
root cause factors can be traced back to the recruitment policies, a culture of accepting
authority without healthy debate (leadership style) and promoting a fierce sense of loyalty
towards the organisation and the fellow employees (acceptable norms).
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4.6 Influence of group dynamics and corporate structures on whistle-
blowing
Nonami (2008:24) contends that the position of employees within a group does influence the
behaviour towards their actions. An example would be an employee who belongs to a
minority inner group (business unit like CS) at the time of whistle-blowing, but continues to
form part of a bigger outer group (larger organisation like Bank X) after whistle-blowing. If the
group role of the above example is reversed, it could alter the inclination of the employee to
blow the whistle upon a perceived wrongdoing due to the risk of being isolated.
The informal and formal organisational structures play a major role in the opportunity to
commit wrongdoings, according to Hansen (2009:36). A practical example of formal
structures is the leadership span-of-control element. A too wide span-of-control is an
organisational structural element that can encourage wrongdoing, as the wrongdoing would
be more easily concealed from a manager who cannot effectively manage potential
wrongdoing risks due to many subordinate employees reporting to him/her.
The informal structure relates more to the organisational culture and whether it is deemed
acceptable for financial targets and pressures to surpass formal rules of the organisation. This
is consistent with the work of Elias (2004) as referred to earlier in this chapter. The work of
Nam and Lemak (2007:36) also found that the closer the majorities’ sense of organisational
commitment towards a cause, even if the cause is potentially wrong, the less likely it would be
for minorities to go against the majority to report the wrongdoing.
This also speaks to the internal relationship networks and the closeness of these networks in
terms of trust and the ability of the networks to influence the actions of the majority within the
organisation. Employees are subjected to many networks and relationships within their
organisations. Some are on the same peer levels and often associated with a form of
friendship. Others are peer/manager based and perhaps less friendship based.
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Some of these form part of the majority type groups and some of these form part of the
minority type groups. The internal audit function would be a good example of the minority part
groups within organisations and therefore (by default), it would be increasingly acceptable for
employees within these business functions to act as whistle-blowers, as they would not
necessarily experience the same business unit and social and cultural pressures as would
employees forming part of other majority type groups within the organisation.
If employees form part of the majority of the sales and marketing group in an organisation that
are prone to winning at all costs, it would be increasingly difficult for those employees to act
as whistle-blowers as they would experience different business unit and social cultures and
pressures than those of the internal audit employees.
4.7 External channels available to whistle-blowers

Whistle-blowing cases have received unprecedented international media coverage globally
over the last decade. This in turn has kick-started various initiatives to assist with the combat
against wrongdoing by providing whistle-blowers with new channels for whistle-blowing.
Table 3 provides a brief summary of some of the fairly new international and local external
channels available to whistle-blowers to report suspected wrongdoings.
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Table 3: Key external channels available to whistle-blowers
Channel Name Brief description of purpose and mission

National Whistle- “The National Whistle-Blowers Centre (NWC) is a non-profit, non-partisan organization
blowers Centre dedicated to protecting employees’ lawful disclosure of waste, fraud, and abuse”.
(http://www.whistle blowers.org)
Corruption Watch “Corruption Watch is a South African civil society not-for-profit organisation. We gather
and analyse information from the public; build alliances; and help people take a stand
against corruption”. (http://www.corruptionwatch.org.za)
Transparency “Transparency International, the global civil society organisation leading the fight against
International corruption, brings people together in a powerful worldwide coalition to end the
devastating impact of corruption on men, women and children around the world”.
(http://www.transparency.org)
Business Against “To get business’ ‘own house in order’ by eliminating crime-enabling processes, systems
Crime and approaches, and improving crime prevention measures within the control of
business”. (www.bac.co.za)
Open Democracy “To promote open and transparent democracy; foster a culture of corporate and
Centre government accountability; and assist people in South Africa to be able to realize their
human rights”. (http://www.opendemocracy.org.za)
South African Fraud “SAFPS acts as a frontrunner in the fight against fraud through our role as the leading
Prevention Service commercial reference in fraud prevention”. (http://www.safps.org.za)
Crime Line South “Giving voice to the millions of South Africans out there by giving them a platform to blow
Africa the whistle on crime anonymously”. (https://www.crimeline.co.za)
Lead SA “Lead SA recognises that there are millions of ordinary South Africans who continually
seek to do the right thing for themselves, for their families and for their country”.
(http://www.primedia.co.za)
Source: Internet based media channels available to whistle-blowers (2012)
A brief study of the external channels available to whistle-blowers shows a clear evolution
from being passive reporting channels, to being active participants and partners to:
• Partner with influential stakeholders to combat the wrongdoings;
• Assist with the legal protection of the whistle-blowing individuals; and
• Influence legal and policy formulation to encourage a culture of whistle-blowing.
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4.8 Summary of the key variables expected to have an influence on
whistle-blowing
Table 4 present a collective summary of the key variables identified from the literature review
that will impact on factors associated with whistle-blowing:
Table 4: Key variables expected to have an influence on whistle-blowing
Key variables Literature and academia author references

Management, awareness, leadership, Svennson and Wood (2004); De Maria (2006); Kaptein and
victimisation, reputation, media influence Avelino (2005); Hall (2007);
and availability.
Control, performance, confidence, tenacity, Green and Latting (2004); Zhang, Chiu and Wei, 2008); Elias
values, educational levels and managerial (2004); Sadler and Barac (2005)
position.
Morals, compliance, seriousness, reward, Evans (2008); Rest (1986); De Maria (2006); Elias (2004);
achievement, effectiveness, prevention and Schmader and Lickel (2006); Zhang, et al. (2008); Edmondson and
society. Munchus (2007); Dryburg (2009)
Frequency, severity, obedience, culture, Rothwell and Baldwin (2006); Nam and Lemak (2007); Nonami
fairness, support, and choice. (2008); Nam and Lemak (2007)

This chapter identified some common themes as to the emotional, behavioural and
organisational factors that impact on the action of whistle-blowing and the individuals who
engage in the action of whistle-blowing.
The literature review suggests that the personal characteristics of whistle-blowers are
consistent with well educated professionals with high levels of integrity and responsibility
towards exposing wrongdoing. Another key influence on whistle-blowing is the dilemma to
expose wrongdoing versus the need to achieve targets that in turn will lead to financial
rewards and incentives.
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The organisational policies related to recruitment and the culture of accepting the norms from
management greatly influence the probability of employees reporting wrongdoings, and can
therefore contribute to the reasons for organisational failure to detect wrongdoing through
employees who expose and report wrongdoing when it is observed or discovered.
The in-and-out group norms within the organisation also play a major role in influencing the
employee’s decision to blow the whistle, as it could jeopardise the standing of the individual in
those social groups. Organisational cultures that have a positive disposition towards
disclosure positively influence whistle-blowing as it is considered an acceptable norm within
the organisation.
However, lack of trust between employees and leadership and fear of retaliation are strong
negative influencers of whistle-blowing. Therefore, the level of dissent employees feel when
they uncover wrongdoing is a very strong influencer towards whistle-blowing inclinations.
Similarly, feelings of dissent quite often lead to whistle-blowers following the wrong processes
and channels to expose the wrongdoing (driven by anger and frustration).
Organisational leadership seldom takes the same time and effort to scan the internal
environments with as much vigour as they do the external environment. This is seen as a
negative influence towards whistle-blowing, as employees subsequently do not trust the
wrongdoing to be dealt with sufficiently by the same leadership. The group dynamics that
employees find themselves in at the time that they discover wrongdoing, also influences
whistle-blowing as it either provides a sense of comfort and protection, or feelings of isolation
and exposure.
The next chapter of the study will briefly outline the proposed research design and
methodology to address the objectives of the study in a logically structured manner.
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5 CHAPTER FIVE: RESEARCH METHODOLOGY AND APPROACH
“I believe in innovation and that the way you get innovation is you fund research and you learn the
basic facts.” - Bill Gates
5.1 Introduction
“Ordinary knowledge is driven by the very practical concern of how to cope better in World 1,
the world of everyday life”. (Babbie & Mouton, 2010:16). “It will satisfy the researcher’s
curiosity and desire for better understanding; it will test the feasibility of undertaking a more
extensive study”. (Babbie & Mouton, 2010:80). The above statements and insights provide
context as to the compelling underlying reasons for wanting to engage in research in the first
place.
This study is a combination of a literature review and empirical study. The literature review
postulates an academic basis for understanding the research problem and provides guidance
to the empirical part of the study. The empirical part of the study will focus on assessing the
level and extent of whistle-blowing practices of employees within a financial institution, and
the determinants that influence their actions in relation to whistle-blowing.
5.2 Research approach

This study is primarily interested in the actions of the employees of CS and to better
understand the motives and determinants of their actions in terms of whistle-blowing choices
and behaviours. The desire to better understand these employees within their natural working
environment is consistent with the research method/research approach.
The following aspects serve as motivational factors for the selection of the quantitative
research approach:
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• The research is in the natural workplace environment of the CS employees.
• The focus is on the factors that influence whistle-blowing, rather than the outcome of the
whistle-blowing action, which is consistent with the research objectives of this study.
• The intention is to understand the behavioural and decision-making paradigms of the CS

employees in terms of whistle-blowing.
• The quantitative research provides statistical data that can be interpreted to accept or
reject the hypothetical points of departure.
The researcher wishes to study the events as they occur, rather than to recreate them. The
researcher also desires to understand the interpretation of the CS employee comprehension
of what is going on around them in the context of the social events and processes that
influence their choices to act or not to act as whistle-blowers. Quantitative research also
provides a structured approach to the research as the respondents will be subjected to a set
of questions with Level of Agreement (LOA) and Level of Importance (LOI) rating scales.
The researcher will distribute the research instrument to the CS employees via paper hard-
copies as most of the respondents do not have access to computers and the internet. The
respondents will be briefed by the researcher in terms of the objective of the study and the
approach to completing the questions. The respondents will be assisted via video call by the
researcher as they are located in cash centres throughout South Africa. The results collected
will be completely anonymous and the application provides for anonymity.
The proposed research approach and design of this study is consistent with the work of
Spangenberg and Theron (2005:3-7) who applied a similar approach in their development of
the ethical leadership inventory (ELI). It is also consistent with the work of Zhang, et al.
(2009:635) in their study of testing the relationship on the intent and envisaged judgement
from the whistle-blower’s perspective.
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Table 5 provides a summary of the research approach aspects:
Table 5: Research approach summary
Item Description
Research nature Quantitative
Design classification Empirical
Research questions classification Exploratory; descriptive and causal
Research instrument Paper based questionnaire
Data collection type Primary data
Typical applications Organisational surveys, causal analysis
Meta theory Variables analysis
Conceptualisation approach Explanatory study
Sample size 554 respondents
Sampling approach Random probability sampling
Data analysis approach Multivariate analysis
Data analysis technique Factor analysis
Analysis results reliability/consistency Kaiser-Meyer-Olkin (KMO), Bartlett's Test of Sphericity (BTS),
controls Catell’s scree test, Kaiser’s criterion, Cronbach’s alpha
Main sources of error Non-response error and questionnaire error
Potential strengths Potential to generalise inferences about a large population with
high levels of reliability and validity
Potential limitations Lack of insight depth and breadth, data very sample specific
Source: Adapted from How to succeed in your Master’s & Doctoral studies (Mouton, 2012:152-153)
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5.3 Research design
Research results will only be as good as the plan devised to perform the research. As the
study involves human behaviour, it is obvious that there would be many ways of performing
the research (Babbie & Mouton, 2010:72). The research design is based upon the proposed
approach to not just describe the variables that influence the behaviour of whistle-blowers, but
to understand the relationship of the factors that impact on, and are impacted upon by the act
of whistle-blowing.
5.3.1 Unit of analysis

Babbie and Mouton (2010) noted that the unit of analysis refers to the empirical research
problems as it involves human phenomena. The proposed unit of analysis for this study is
based upon institutional level, collectively compromising the characteristics of the employees
of CS. The points of focus will be the ethical characteristics, moral orientations, organisational
variables and group dynamics of the employees of CS.
5.3.2 Research population

“A population is the theoretically specified aggregation of the study elements”. (Babbie &
Mouton, 2010:173). The population from whom the study intends to draw conclusions, will be
the employees of the CS business unit within Bank X. The employees share the common
characteristic that they are mainly operationally focussed within a business function that
processes large volumes of physical cash on a daily basis. The study population size is 1,054
employees.
5.3.3 Sampling design

Zikmund describes a sample as a subset of a larger population while the objective of
sampling is to estimate unknown characteristics of a population (Zikmund, et al. 2010:387).
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Figure 6 illustrates the various decisions the researcher undertook in order to define the target
population. These decisions did not always follow in sequential order, but were highly
interconnected ((Zikmund, et al. 2010:390).
Figure 6: Stages in sampling selection
Source: Adapted from Zikmund, et al. (2010:391)
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The sampling frame is the formal Human Resource listing of all the employees of CS. The
sample size included 554 respondents. Probability sampling was performed (via the simple
random sampling method). The procedure or intention to perform the research was obtained
in writing from the executive leadership of CS on behalf of Bank X.
5.3.4 Inclusion and exclusion criteria

The following served as criteria to include or exclude potential respondents from the sample:
5.3.4.1 Inclusion:
It was proposed that only employees of CS who wished to voluntarily participate in the study
were included in the intended sample of respondents.
5.3.4.2 Exclusions:
• Any employee of CS previously found guilty of any serious wrongdoing within Bank X or
CS.
• Any employee currently under suspension or pending an investigation into serious

misconduct.
• Any employee who did not wish to voluntarily participate in the survey.
• Any employee who was not employed in the South African operations of Bank X and CS.
5.3.5 Method of data collection

The research data was collected via questionnaire. The survey questionnaires were made
available to the respondents in printed form and collected and returned via registered post.
CS employees were very familiar with this approach based upon various other business
related surveys being performed in the same manner during the normal course of business.
One of the key advantages of this application was that the respondent’s personal information
was kept completely anonymous.
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5.3.6 Research instrument
“Questionnaires provide a method of collecting data by (1) asking people questions, or (2)
asking them to agree or disagree with statements representing different points of
view”(Babbie & Mouton, 2010:265). The literacy levels of the intended respondents were
adequate based upon the minimum literacy qualifications required to be appointed at CS.
Self-administered questionnaires was used as the main data collection instrument. The
questionnaire contained a combination of sections for both general open ended type
questions, and a section of matrix type questions containing Likert response categories (LOA
& LOI).
The general section of the questionnaires was designed to extrapolate information about the
leadership attitudes, policies, processes and systems that impact on whistle-blowing. The
questionnaire was devised in three sections. Section A contained an introduction letter and
some basic information and examples of how to complete the questionnaire.
Section B and C contained the actual research questions, namely biographic information
(Section A: Questions 1 to 10) and whistle-blowing influences (Section B: Questions 11 to
15). The complete questionnaire is included as Appendix A to this document.
5.4 Method of data analysis

“Content analysis is a social research method appropriate for studying human
communications”. (Babbie & Mouton, 2010:404). Content analysis was used as the data
analysis method as it is most appropriate in the study of human social behaviour.
The observed response data was coded in order to facilitate the process of categorising the
data into numerical measures. The coded data was transferred to electronic numerical data
on computer via the Microsoft Excel software program.
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The coded numerical data facilitated the analysis of the data into quantifiable raw data, which
in turn could then be transformed into descriptive statistics for analysis purposes. Descriptive
statistics involves the basic conversion of data in a way that describes the basic features such
as variability, central tendency and distribution (Zikmund, et al. 2010:486).
In order to further analyse the quantifiable raw data, data categories were designed in order
to facilitate multivariate analysis to measure the aspects of frequency count, data distribution
and central tendency. Appropriate data reduction measures of association were applied in
order to work with manageable volumes of data.
For data analysis purposes the Statistical Package for Social Sciences (SPSS) was used to
compile the descriptive statistics. The large amounts of data collected from the questionnaire
was statistically analysed to identify some of the key factors.
5.4.1 Defining factor analysis

Factor analysis attempts to reduce a number of factors from a large number of variables, or to
identify a small set of factors that represent underlying relationships amongst a group of
variables (Babbie 2010:472, Zikmund, et al. 2010:593).
5.4.2 Purpose of factor analysis

Factor analysis analyses the correlations between variables to form groups of variables.
Variables in the same group are therefore highly correlated with one another, but not
necessarily correlated with variables in other groups. Factor analysis reveals a loading matrix
which indicates the loading of each variable and allows the researcher to identify the variables
that can form a group (or factor).
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To identify the questions that contribute most to a factor, the loading matrix can be rotated
without changing the original results. Ultimately, factor analysis allows the researcher to focus
on a few factors and the interpretation thereof, instead of the results set of the individual
questions of the research instrument (Eiselen, Uys & Potgieter, 2005:105).
5.4.3 Criteria to determine the number of factors

There are various methods to determine the optimum number of factors that can be
formulated from the factor analysis. One of the most commonly used criteria is known as the
Kaiser’s criterion. Using this rule, only factors with an eigenvalue of greater than 1 are
retained for further analysis. Eigenvalues are indicative of how much variance is explained by
each factor (Zikmund, et al. 2010:593-594).
5.4.4 Methods to simplify the factor results

Rotation is a mathematical method that simplifies factor results by producing more obvious
variable loading patterns (Zikmund, et al. 2010:594).
5.4.5 Communality of variables

In order to reduce the data to a manageable few factors that are representative of the whole,
it is important to know how much one variable has in common with all other factors (Zikmund,
et al. 2010:596). As a rule of thumb only variables with a communality score >0.3 should be
considered for inclusion into a factor.
5.4.6 Data analysis method

Figure 7 illustrates the stages of data analysis:
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Figure 7: Stages of data analysis
Source: Adapted from Zikmund, et al. (2010:462)
Multivariate analysis is a research data analysis method that involves three or more variables
with underlying dimensions with multiple variables. This method is appropriate to the study as
it contains similar data analysis characteristics.
5.4.7 Data measurement method

Figure 8 illustrates the multivariate interdependence measurement scale selected to analyse
the data collected:
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Figure 8: Selection of multivariate interdependence technique
Source: Adapted from Zikmund, et al. (2010:582-584)
The appropriate measurement scale for the research instrument will be nonnumeric
multidimensional. Figures 7 and 8 collectively provide the motivation for the selection of the
data analysis and scaling techniques to be used in conjunction with the factor analysis as
previously discussed.
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Rotation is a mathematical method that simplifies factor results by producing more obvious
variable loading patterns (Zikmund, et al. 2010:594). In order to reduce the data to a
manageable few factors that are representative of the whole, it is important to know how
much one variable has in common with all other factors (Zikmund, et al. 2010:596). As a rule
of thumb only variables with a communality score >0.3 should be considered for inclusion into
a factor.
5.4.8 Validity and reliability testing criteria

“Validity refers to the extent to which a measurement instrument provides data that relates to
commonly accepted meanings of a particular concept” (Babbie & Mouton, 2010:125). There
are various validity measures that aim to ensure that the intended measure equals the
achieved measure. These measures include content validity, criteria validity and construct
validity (Cooper & Schindler, 2008:231).
Reliability refers to the likelihood of the same test returning the same results. It is the intention
of the researcher to ensure that the recorded and observed data conforms to these
measures, in order to ensure credible analysis results.
5.4.9 Internal consistency criteria

Researchers most frequently test internal consistency (a form of reliability) by running the
Cronbach alpha (α) test. The Cronbach alpha test calculates all the split-half reliability
coefficients.
The calculated results of (α) will vary from 1 (denoting perfect consistency) to 0 (denoting zero
internal consistency). Values should be above 0.7 (preferably above 0.8) to be considered
reliable.
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5.4.10 Sampling adequacy criteria
The measurement of sampling adequacy (MSA) is indicated by the KMO score. As a general
rule of thumb the KMO should be greater than 0.6 (Kaiser 1970, 1974). In addition BTS is
used to test the null hypothesis and should be significant. As a rule of thumb BTS score
should thus not exceed a value of 0.05 (Bartlett, 1954).
5.5 Ethical considerations

Babbie & Mouton (2010:546) states the following as the key ethical considerations of social
research:
• Respondents must participate on a voluntary basis.
• The anonymity of the respondents must be ensured at all times.
• The researcher must maintain high levels of information confidentiality.
The highest standards of analysis and reporting were maintained by the researcher to satisfy
the above considerations. To this extent the researcher obtained a letter of confidentiality
between the researcher, the University of Johannesburg and CS. This satisfied the
confidentially concerns of all parties involved.
5.6 Limitations of the research approach

One of the limitations of the study could be the data results being representative of a moment
in time only, as the study did not cater for trend based analysis over an extended time period.
Organisational factors such as the recent financial performance, structural changes and
existing leadership can all also potentially have an impact on the whistle-blowing culture of
the organisation, thereby potentially distorting the results of the study.
It was the intention of the researcher to design the research instrument in such a manner that
these limitations were mitigated as far as possible.
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5.7 Referencing technique
The Harvard referencing technique is used throughout this study.

The research literature appears to be biased towards the whistle-blowing cases wrapped in
glory and heroism, as was the case with the individuals from Enron and WorldCom to name
but a few of the well-known examples.
Therefore, this could lead to a distorted picture of reality as illustrated by the case of Wendy
Addison from Leisurenet. Evans (2008) found that the idolisation of underdog type whistle-
blowers who end up exposing the scandals and becoming heroes in the process, are factually
misrepresented. The reality is that many more whistle-blowers end up getting fired for every
one such success story as Sharon Watkins from Enron.
This chapter outlines the research methodology design to gather information based upon the
findings of the literature review. It also provides an overview of the method of data collection
and methods of data analysis and specifies some inclusion and exclusion criteria used in the
process of data analysis.
It further provides some measure and statistical test to ensure the validity and reliability of the
results. The chapter concludes with some ethical considerations, possible limitations to the
study and the referencing technique used throughout the study.
The next chapter presents the empirical results of the data analysis.
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6 CHAPTER SIX: EMPIRICAL RESULTS PRESENTATION
“...great difficulties are felt at first and these cannot be overcome except by starting from
experiments and then by conceiving certain hypotheses ... But even so, very much hard work
remains to be done and one needs not only great perspicacity but often a degree of good fortune”
- Christiaan Huygens
6.1 Introduction
The literature review highlighted the various factors that influence upon the decision to act or
not act as a whistle-blower in terms of personal characteristics, personal motives, situation
variables, trust relationships and factors that encourage and discourage whistle-blowing. The
research methodology suggested the approach and techniques to test these factors
highlighted in the literature review in a business environment, in order to test the validity and
therefore provide insight and context toward the problem statement and research objectives.
This chapter presents the findings the descriptive statistics. The first section of this chapter
will present the biographical statistics and the second section will present the whistle-blowing
influences statistics. The third section will focus on the factors analysis and validity and
reliability testing of the factor analysis. The final section of this chapter will summarise the key
findings of the descriptive results and highlight the possible issues identified from the results
interpretation.
6.2 Biographical information results presentation

6.2.1 Frequencies and descriptives
The biographical information descriptive statistics attempt to summarise values that make up
variables and present the quantitative results in manageable form (Babbie & Mouton,
2010:459). These results can be best interpreted by the calculation of average and frequency
distributions. These results are presented in tabular form.
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A total of 554 completed responses were received from the study population of 1,054 Cs
employees. This represents a response rate of 52.56%. The biographical information paints a
picture of the profile of the respondents who completed the questionnaire in terms of the age,
location, employee status, educational qualifications amongst others.
Table 6 contains a summary of the biographical information descriptive statistics results:
Table 6: Biographical information frequencies and descriptives
Frequency Percent Valid Percent Cumulative Percent

GENDER
Male 238 42.96 43.04 43.04
Female 315 56.86 56.96 100.00
Missing 1 0.18
Total 554 100.00 100.00
AGE
Below 20 2 0.36 0.36 0.36
20-29 241 43.50 43.66 44.02
30-39 180 32.49 32.61 76.63
40-49 90 16.25 16.30 92.93
Above 50 39 7.04 7.07 100.00
Missing 2 0.36
Total 554 100.00 100.00
ETHNICITY
Black 236 42.60 42.83 42.83
White 120 21.66 21.78 64.61
Coloured 110 19.86 19.96 84.57
Indian or Asian 81 14.62 14.70 99.27
Other 4 0.72 0.73 100.00
Missing 3 0.54
Total 554 100.00 100.00
MARITAL STATUS
Single 257 46.39 46.56 46.56
Married 233 42.06 42.21 88.77
Divorced 25 4.51 4.53 93.30
Widow / Widower 6 1.08 1.09 94.38
Co-habitant (living together) 31 5.60 5.62 100.00
Missing 2 0.36
Total 554 100.00 100.00
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RELIGIOUS ORIENTATION
Christianity 474 85.56 86.03 86.03
Islam 15 2.71 2.72 88.75
Hinduism 51 9.21 9.26 98.00
Other 11 1.99 2.00 100.00
Missing 3 0.54
Total 554 100.00 100.00
WORKPLACE LOCATION
Gauteng 253 45.67 45.75 45.75
Free State 24 4.33 4.34 50.09
KwaZulu-Natal 102 18.41 18.44 68.54
North West 25 4.51 4.52 73.06
Mpumalanga 23 4.15 4.16 77.22
Limpopo 0 0.00
Northern Cape 4 0.72 0.72 77.94
Eastern Cape 46 8.30 8.32 86.26
Western Cape 76 13.72 13.74 100.00
Missing 1 0.18
Total 554 100.00 100.00
RESIDENTIAL CLASSIFICATION
Urban 493 88.99 90.79 90.79
Rural 50 9.03 9.21 100.00
Missing 11 1.99
Total 554 100.00 100.00
EMPLOYMENT CLASSIFICATION
Permanent staff member 438 79.06 79.35 79.35
Temporary staff member 96 17.33 17.39 96.74
Contract staff members 18 3.25 3.26 100.00
Missing 2 0.36
Total 554 100.00 100.00
EDUCATIONAL CLASSIFICATION
Below Grade 12 22 3.97 4.02 4.02
Grade 12 282 50.90 51.55 55.58
Undergraduate 185 33.39 33.82 89.40
Graduate 36 6.50 6.58 95.98
Postgraduate 22 3.97 4.02 100.00
Missing 7 1.26
Total 554 100.00 100.00
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YEARS OF EMPLOYMENT
Less than 1 47 8.48 8.53 8.53
1-3 131 23.65 23.77 32.30
3-5 118 21.30 21.42 53.72
5-10 113 20.40 20.51 74.23
More than 10 142 25.63 25.77 100.00
System 3 0.54
Total 554 100.00 100.00
The biographical information results showed that from the total population of 554 respondents
56.96% were female respondents. 43.66% were aged between 20 to 29 years old, while
76.63% were younger than 40 years old.
The sample included 42.83% black respondents, 46.39% were married and 86.03% held
Christian beliefs. A total of 45.75% worked in Gauteng and 90.79% lived in urban areas.
79.06% of the sample were permanent staff members and 50.90% held up to grade 12
qualifications. 53.72% of the combined respondents had been in service for 5 years or less.
6.3 Whistle-blowing influences results presentation

6.3.1 Factor analysis results presentation
An exploratory factor analysis was performed to assess the discriminant validity of the
research instrument.
Using the SPSS model, a factor analysis was performed. A factor analysis is very useful to
interpret large volumes of data in manageable summaries of answers. This is very much in
line with evaluating variables and the statistical relationship between these variables. To
some extent it is also consistent with the Pareto analysis (80:20) to help focus the research
analysis on the bulk of the responses.
- 72 -
The factor analysis revealed six main factors. Table 7 presents these results:
Table 7: Rotated factor matrix results
No Label Variables F1 F2 F3 F4 F5 F6
Q14a TR01 Management 0.75
Q14g TR07 Leadership 0.74
Q13c SV03 Fairness 0.68
Q14e TR05 Availability 0.47
Q13e SV05 Support 0.37
Q11e PC05 Status 0.32
Q15b ED02 Comprehension 0.31
Q15b ED02 Comprehension 0.68
Q15c ED03 Legislation 0.55
Q14b TR02 Awareness 0.55
Q15d ED04 Anonymity 0.47
Q15e ED05 Responsibility 0.46
Q13f SV06 Choice 0.34
Q11d PC04 Control 0.67
Q11c PC03 Performance 0.63
Q11f PC06 Confidence 0.58
Q11g PC07 Tenacity 0.46
Q11a PC01 Values 0.45
Q12a PM01 Morals 0.44
Q15d ED04 Anonymity 0.35
Q15e ED05 Responsibility 0.38
Q12a PM01 Morals 0.42
Q15f ED06 Impact 0.59
Q14f TR06 Loyalty 0.47
Q15a ED01 Ethics 0.46
Q13f SV06 Choice 0.44
Q13b SV02 Culture 0.31
Q13d SV04 Frequency 0.78
Q13a SV01 Severity 0.69
Q13g SV07 Obedience 0.63
Q12b PM02 Compliance 0.45
Q12e PM05 Effectiveness 0.54
Q12g PM07 Society 0.53
Q12f PM06 Prevention 0.46
Q13b SV02 Culture 0.32
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Table 8 provides the labelling of the revealed factors for ease of reference:
Table 8: Key factor lable and description
Factor Number Factor label and description

F1 Trust
F2 Knowledge
F3 Character
F4 Motive
F5 Situation
F6 Prevention
The revealed factors all had variable coefficients of greater than 0.3 which substantiates the
method of data analysis chosen. Items which did not load significantly (above 0.3) onto any
factor was removed from any further analysis. In order to test if the factor analysis results
were both adequate and significant, the KMO and BTS results were analysed. Table 8
presents these results:
Table 9: Factorability results
KMO and Bartlett’s Test Initial Extraction

Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy .867
Bartlett's Test of Sphericity App.Chi-Square 4149.517
df 435
Sig. 0.000
It can be concluded that the data analysis sample is adequate as the KMO score is 0.867
(above 0.5) and that the analysis results are significant as the Bartlett score is 0.000 (below
0.05). Having established that the factor analysis results were adequate and significant it had
to be verified if the revealed factors explained a substantial number of the total analysis.
This was done by evaluating the total variance analysis. Table 10 presents the total variance
explained results:
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Table 10: Total variance explained results
Factor Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared

Loadings Loadings
Total % of Var. Cum.% Total % of Var. Cum.% Total % of Var. Cum.%
Trust 6.75 22.50 22.50 6.19 20.64 20.64 2.45 8.16 8.16
Knowledge 2.44 8.15 30.64 1.92 6.42 27.06 2.22 7.40 15.55
Character 2.04 6.81 37.45 1.51 5.03 32.08 2.11 7.05 22.60
Motive 1.71 5.69 43.14 1.15 3.83 35.92 1.89 6.30 28.90
Situation 1.29 4.29 47.43 0.65 2.17 38.09 1.89 6.30 35.20
Prevention 1.24 4.14 51.57 0.61 2.04 40.13 1.37 4.57 39.77
The eigenvalues of the seven factors were all greater than 1 and cumulatively they explained
a sizable total (51.57%) of the total variance. Having established that the revealed factors
explain a substantial amount of the total analysis, it had to be verified if the factors were
consistent and reliable. Table 11 present the consistency and reliability testing results:
Table 11: Consistency and reliability testing results
Cronbach alpha reliability

Level of Level of Consistent
Factor Variables that significantly loaded onto this factor
agreement importance and reliable
Trust TR01; TR07; SV03; TR05; SV05; PC05; ED02 0.75 0.71 Yes
Knowledge ED02; ED03; TR02; ED04; ED05; SV06 0.76 0.81 Yes
Character PC04; PC03; PC06; PC07; PC01; PM01 0.72 0.71 Yes
Motive ED04; ED05; PM01; ED06; TR06; ED01; SV06; SV02 0.65 0.60 No
Situation SV04; SV01; SV07; PM02 0.73 0.73 Yes
Prevention PM05; PM07; PM06; SV02 0.62 0.68 No
The Catell scree test was performed to identify factors with Eigenvalues greater than 1 in
order to identify the factors that contribute the most to the explanation of the variance in the
data set. In addition, the Cronbach alpha scores were analysed to validate the consistency
and reliability of the research questions and subsequent factor analysis.
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“Trust”, “Knowledge”, “Character”, and “Situation” were found to be consistent and reliable
factors as they scored above the Cronbach alpha benchmark of 0.7. Only these 4 factors
were retained for further analysis. “Motive” and “Prevention” were found to be inconsistent
and unreliable factors as they did not score above the Cronbach alpha benchmark of 0.7.
These 2 factors were omitted from any further analysis.
6.3.2 Correlation analysis results presentation

In order to analyse the normality or distribution of the results the Kolmogorov-Smirnov test
was used. This test is useful when working with samples of larger than 50 responses. Table
12 presents the normality scoring analysis results for the comparative rating scales:
Table 12: Rating scales test of normality results
Category Factor Statistic df Sig.

Trust .067 554 .000
Knowledge .079 546 .000
Level of agreement
Character .125 554 .000
Situation .162 552 .000
Trust .075 504 .000
Knowledge .095 497 .000
Level of importance
Character .114 504 .000
Situation .164 506 .000
The sig. (or p value) for all the selected factors for both the level of agreement and level of
importance scales were all statistically significant (Sig. or p ≤ 0.05) and therefore abnormally
distributed. The distribution scoring were skewed to the left (upper rating scales of LOA and
LOI) indicating a positive correlation between the selected factors and whistle-blowing.
The sig. (or p value) for all the selected factors were statistically significant (p ≤ 0.05) and
therefore abnormally distributed. The distribution scoring was skewed to the left indicating a
positive correlation between the biographical variables and whistle-blowing.
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Correlation analyses were performed to analyse the strength and direction of the linear
relationships between the variables that loaded onto these factors. The Spearman Rank
Order Correlation (rho) was selected as the analysis technique as it was designed to be best
used with ordinal level or ranked data, which is consistent with the research instrument of this
study. Table 13 presents the correlations analysis:
Table 13: Spearman’s rank order correlation analysis results
Factor Spearman's rho Trust Knowledge Character Situation

Trust Correlation Coefficient 1.000 .528 .337 .150
Sig. (2-tailed) .000 .000 .000
N (population) 554 546 554 552
Knowledge Correlation Coefficient 1.000 .358 .200
Sig. (2-tailed) .000 .000
N (population) 546 546 545
Character Correlation Coefficient 1.000 .222
Sig. (2-tailed) .000
N (population) 554 552
Situation Correlation Coefficient 1.000
Sig. (2-tailed)
N (population) 552
All the retained factors from Table 13 reached statistical significance as (p ≤ 0.05). There
were positive correlations between all the factors but they were mostly weak with the
exception of the correlation between “Trust” and “Knowledge” which revealed a very strong
positive correlation of r = 0.528.
The Wilcoxon Signed Rank Test was performed to compare correlations between the overall
LOA and LOI scales of the selected factors. This test was designed for use with repeated
measures which is consistent with the research instrument of this study. Table 14 presents
these results:
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Table 14: Wilcoxon signed rank test results
Wilcoxon Signed Rank Test Z Value Asymp. Sig. (2-tailed)

Trust -14.971 0.000
Knowledge -9.380 0.000
Character -4.891 0.000
Situation -8.344 0.000
The LOA and LOI for the selected factors reached statistical significance as (p ≤ 0.05). The Z
value revealed strong negative correlations between the LOA and LOI scales for all the
retained factors.
The literature review also proposed that gender, level of education and employment duration
were the key biographical variables associated with whistle-blowing. In order to measure the
same number of groupings, the variables of question 9 (levels of education) and question 10
(employment duration) was grouped into two groupings to align with that of question 1
(gender) of the research instrument.
The groupings for the variables were defined as follows:
• Gender = Male / female
• Level of education = Matric / lower and tertiary education
• Employment duration = 3 years or less / more than 3 years
Table 15 presents the normality scoring analysis results of the selected biographical variables
in the stated groupings:
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Table 15: Biographical variables test of normality results
Factor Biographic variable Statistic df Sig.

Gender
Male .075 238 .002
Female .063 315 .004
Level of education
Trust Matric or lower .069 304 .001
Tertiary education .073 243 .003
Employment duration
3 years or less .115 178 .000
More than 3 years .082 373 .000
Gender
Male .075 236 .003
Female .087 309 .000
Level of education
Knowledge Matric or lower .092 304 .000
Employment duration
3 years or less .103 175 .000
Gender
Male .161 238 .000
Female .107 315 .000
Level of education
Character Matric or lower .119 304 .000
Employment duration
3 years or less .135 178 .000
Gender
Male .178 237 .000
Female .161 314 .000
Level of education
Situation Matric or lower .155 303 .000
Employment duration
3 years or less .173 177 .000
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Although the results found statistically significant correlations between the biographic
variables as determinants of whistle-blowing, the results found no statistically significant
differentiation between the individual variables tested (for example male vs. female). Although
the female respondents scored higher than the male respondents in the trust variables (0.04
vs. 0.02), the male respondents scored higher in the knowledge variables (0.03 vs. 0.00).
None of the individual variances score above 0.05.
6.3.3 Review of the whistle-blowing influences results

The biographical information revealed the distribution and profile of respondents in terms of
gender, age, ethnicity, marital status, religious beliefs, location of workplace, classification of
residence, employment status, duration of employment service and educational qualifications.
The 35 whistle-blowing influence response items were subjected to principal components

analysis (PCA) using SPSS version 15. Prior to performing the PCA the suitability of the data
for factor analysis was assessed. Inspection of the correlation matrix revealed various
coefficients of 0.3 and higher. The PCA identified six factors with eigenvalues exceeding 1.
Using Catell’s (1966) scree test, it was decided to retain only four factors for further
investigation. This was evidenced by the results of the Cronbach alpha analysis, which
indicated the components with a score of above 0.7 for both the level of importance and level
of agreement sections of randomly generated data matrix of the same size (35 variables ×
554 respondents).
The KMO values for the retained 4 factors were 0.867, exceeding the recommended
benchmark value of 0.6. The BTS indicated a statistical significance, thereby supporting the
factorability of the correlation matrix. To aid in the interpretation of these key factors an
Oblimin rotation was performed.
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The test of normality results revealed that the scoring was statistically significant and
therefore not normally distributed, which is indicative of correlations between the independent
variables (from the retained factors) and the intervening variable (whistle-blowing).
The Spearman Rank Order Correlation test revealed a very strong correlation between the
“Trust” and “knowledge” factors and positive but weak correlations between the other retained
factors. The Wilcoxon Signed Rank Test revealed very strong negative correlations between
the overall ratings scales for LOA and LOI.
The rotated solution revealed the presence of simple structure (Thurstone, 1947), with the 4
retained factors showing a number of strong loadings. The interpretation of these factors was
consistent with previous research on the Positive and Negative Affect Scale (PANAS). The
summarised validity, reliability consistency, distribution and correlation results for the retained
factors are presented in Table 16:
Table 16: Data analysis techniques summary
Validity, reliability and consistency controls F1 F2 F3 F5

“Trust” “Knowledge” “Character” “Situation”
Correlation matrix coefficients (> 0.3) Yes Yes Yes Yes
KMO score (> 0.7) Yes Yes Yes Yes
BTS score (< 0.5) Yes Yes Yes Yes
Eigenvalues (> 1) Yes Yes Yes Yes
Cronbach alpha coefficient score (> 0.7) Yes Yes Yes Yes
Distribution normality testing (p ≤ 0.05) Yes Yes Yes Yes
Spearman Rank Order Correlation (p ≤ 0.05) Yes Yes Yes Yes
The Wilcoxon Signed Rank Test (p ≤ 0.05) Yes Yes Yes Yes
- 81 -
Chapter 1 presented the conceptual framework of the research objectives. The research
results was extensively analysed through various analysis techniques in order to validate the
reliability, consistency, distribution, correlation statistical significance of these results. The
revised conceptual framework which incorporates the findings from the empirical results is
presented in figure 9.
Management 0.747
Leadership 0.735
Fairness 0.677
Availability 0.466 Trust
F1
Support 0.372 µ = 0.75 & 0.71
Status 0.318 p ≤ 0.05 Ho1 / Ha1
Comprehension 0.308
Comprehension 0.677 Knowledge

Legislation 0.552 µ = 0.76 & 0.81
Awareness 0.548 F2 p ≤ 0.05 Ho2 / Ha2
Anonymity 0.469
Responsibility 0.458
Choice 0.338 Whistle
Blowing
Control 0.669
Performance 0.633 Character
Confidence 0.582 F3 µ = 0.72 & 0.71
Tenacity 0.458 p ≤ 0.05 Ho3 / Ha3
Values 0.448
Morals 0.438
Situation Ho5 / Ha5

Frequency 0.781
µ = 0.73 & 0.73
Severity 0.694 F5
p ≤ 0.05
Obedience 0.629
Compliance 0.454
Biographic variables
Ho7 / Ha7
Gender
Level of education
Employment duration
Figure 9: Empirical results summary presentation
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This chapter presented the results from the empirical research. It provided an indication of the
research sample and response rate and an overview of the profile of the respondents in terms
of the biographical information. It further provided the empirical results presentation in terms
of the SPSS factor analysis, descriptive statistics and correlation analysis.
It is important to note that the factors for Motive (F4) and Prevention (F6) revealed Cronbach
alpha scores of below the acceptable standard for this study (0.7). These factors were
excluded from any further analysis and interpretation.
From the results presented it can be concluded that the variables that grouped together into
the 4 retained factors were statistically significant and adequate, and that these key factors
were valid and reliable.
It is evident from this chapter that a methodical research design was developed for this
purpose and that the measuring instrument was well constructed. The results were aligned to
the research objectives, and specifically linked back to the hypothetical points of departure.
The next chapter provides an interpretation of the presented results from this chapter.
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7 CHAPTER SEVEN: EMPIRICAL RESULTS INTERPRETATION
"The housing bubble and the risky lending practices could have been prevented by more
aggressive regulation and the elimination of tax benefits for homeowners."
- Richard Posner
7.1 Introduction
The previous chapter presented the statistical results from the empirical research in the form
of descriptive statistics. This chapter aims to interpret these results in accordance with the
research problem and objectives.
7.2 Interpretation of empirical research results

It is important to note that the research objectives of this study only focussed on the
independent variables (determinants of whistle-blowing) and the subsequent impact thereof
on the intervening variable (whistle-blowing).
The dependant variable (losses in excess of R200m) was not analysed in this study as the
quantum of the losses is not directly correlated to the intervening variable. For example, if the
number of whistle-blowing events increase or decrease it will not necessarily translate to
higher or lower losses suffered by Bank X. One wrongdoing could incur substantial losses
whereas another could be immaterial in terms of monetary value.
7.2.1 Interpretation of the results for trust variables

Table 7 presented key factor 1 as “Trust”. The variables expected to measure trust
determinants that loaded onto this factor were management, leadership and availability.
These variables relate to trust determinants in the sense that it illustrates the relationships
between the CS employees, and the management/leadership of CS and Bank X. It also
confirms that the management and leadership of CS and Bank X are readily available should
the CS employees wish to report wrongdoing to them.
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The variables expected to measure situational determinants that loaded onto this factor
included fairness and support. Fairness relates to trust in the sense that it can also be
interpreted as trust a CS employee has in terms of the fairness of the manager in dealing with
a whistle-blowing situation. The same applies for support in terms of the trust relation a CS
employee has with management to provide them with support, rather than retaliate against
whistle-blowers.
The variable expected to measure character determinants that loaded onto this factor was
status. Status relates to trust in the sense that if the respondent has a management type
position it might influence the trust relationship with their fellow employees.
The variable expected to measure encourage/discourage determinants that loaded onto this
factor was comprehension. Comprehension relates to trust in the sense of understanding
that a healthy trust relationship can positively influence the fairness and support factors and
therefore better protect the employee from retaliation and victimisation in the event of whistle-
blowing.
The variables of victimisation, awareness, reputation and media influence were expected
to measure trust determinants, but none of these loaded significantly onto this factor which
further strengthens the above findings. It is therefore inferred that a positive association exists
between the trust relationship (independent variable) that CS employees have with the direct
managers and/or other leaders in Bank X, which in turn serves as a determinant of whistle-
blowing (intervening variable).
This also implies that the whistle-blowers will prefer to disclose wrongdoing in confidence to
internal management based on the trust relationships, rather than disclosing the wrongdoing
to other internal channels (such as anonymous hotlines where there is no managerial trust
relationship involved) or external channels (printed or social media where there is also no
managerial trust relationship involved).
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The empirical results for trust variables as determinants of whistle-blowing revealed
statistically significant correlations (p ≤ 0.05) as presented in Table 12, Table 13, Table 14
and Table 16. Ho1 is therefore rejected, and Ha1 is accepted accordingly.
7.2.2 Interpretation of the results for knowledge variables

Table 7 presented key factor 2 as “Knowledge”. The variables expected to measure
knowledge determinants that loaded onto this factor were comprehension, legislation,
anonymity and responsibility.
These variables relate to knowledge determinants by confirming that the respondents

understand the legislative protection mechanisms available to them, and that they can blow
the whistle via anonymous channels. It also confirms that they see blowing the whistle as their
responsibility to protect others from the effects of wrongdoing.
The variable expected to measure trust determinants that loaded onto this factor is
awareness. There is an obvious correlation between the awareness of whistle-blowing
policies and procedures which translated into knowledge about whistle-blowing.
The variable expected to measure situation determinants that loaded onto this factor is
choice. This implies that if given a choice, the respondent will choose to blow the whistle
rather than refraining from doing so. This implies that the whistle-blower has some level of
knowledge about the effects, processes and consequences of whistle-blowing. There were no
other variables expected to load onto this factor.
The empirical results for knowledge variables as determinants of whistle-blowing revealed

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7.2.3 Interpretation of the results for character variables
Table 7 presented key factor 3 as “Character”. The variables expected to measure character
determinants that loaded onto this factor were control, performance, confidence, tenacity
and values. These variables relate to character in the sense that they reveal the personal
characteristics of the respondent, who exercises the self-control to blow the whistle, have the
confidence and tenacity to see the process through when it gets tough, and is a good
performer at their workplace. It also reveals the ethical values and principles that influence
their decisions to expose wrongdoings by blowing the whistle rather than turning a blind eye
to it.
The variable expected to measure motive determinants that loaded onto this factor was
morals. This can be explained in terms of the strong association of high moral standards and
personal characteristics to correct wrongdoing.
The variables of management position and educational level were expected to measure
character determinants but did not load significantly onto this factor. This implies that
individuals who choose to blow the whistle can be from any management level within CS,
regardless of how senior or not the position is. It also infers that personal character does not
correlate with level of education.
This strengthens the findings from the statistical analyses as the determinants of whistle-
blowing are more closely correlated with personal characteristics than with managerial
position or level of education.
The empirical results for character variables as determinants of whistle-blowing revealed

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7.2.4 Interpretation of the results for situation variables
Table 10 presented key factor4 as “Situation”. The variables expected to measure character
determinant that loaded onto this factor were frequency, severity and obedience. These
variables relate to character in the sense that if wrongdoing occurs regularly and are of a
serious nature it would prompt the respondent to blow the whistle.
The variable expected to measure motive determinants that loaded onto this factor was
compliance. There is a close connection between compliance and situation as it infers the
respondent will comply with organisational policies and legislative norms by exposing
wrongdoing.
It is important to note that the variables of culture, fairness, support and choice were
expected to measure situation determinants, but none of these loaded significantly onto this
factor. It implies that the organisational culture of CS does not align well to whistle-blowing
determinants.
Fairness and support loaded onto the trust factor while choice loaded onto the knowledge
factor. This confirms the negative correlation between the situational variables and the
variables related to the other retained factors.
The empirical results for character variables as determinants of whistle-blowing revealed

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7.2.5 Interpretation of the results for biographical variables
A brief analysis of the biographical results was provided in the previous chapter. The results
highlighted the following 10 personal characteristics of the average respondent: a black
female in her thirties who is single with Christian beliefs working in the Gauteng Province and
residing in an urban area as a permanent employee of CS with 3 to 5 years’ service and who
holds a grade 12 qualification.
The biographical profile of these respondents seems to correlate with the famous cases of
Enron, Leisurenet and WorldCom amongst others, and the work of Miceli, et al. (2008: 44-47)
who found that predominantly female employees with high levels of education and longer
employment duration cycles comprise the most common profile of the typical whistle-blower.
It is important to note that the literature work was somewhat isolated due to the
disproportionate number of sexual harassment cases linked to whistle-blowing, and the
reluctance of males to blow the whistle based upon their standing and position in society.
The correlation statistics in chapter six revealed statistical significant correlations between
whistle-blowing and the biographical variables of gender, level of education and employment
duration. From table 15 the highest statistical result presented was p = 0.04 for the female
variable that loaded onto the trust factor. It did not however reveal a statistical significant
difference between the individual variables, for example between male and female.
Based on these results these biographical variables were proven to hold statistical
insignificant correlations to the determinants of whistle-blowing. Ho7 is therefore accepted,
and Ha7 is rejected accordingly.
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Table 17 summarises the main aspects of the results interpretation:
Table 17: Results interpretation summary
Results items Trust Knowledge Character Situation Biographics

Hypotheses Ho1 / Ha1 Ho2 / Ha2 Ho3 / Ha3 Ho5 / Ha5 Ho7 / Ha7
No of expected variables loaded 3 4 5 3 10
No of unexpected variables loaded 4 2 1 1 0
No of expected variables not loaded 4 0 2 4 0
Hypothesis accepted Ha1 Ha2 Ha3 Ha5 Ho7
Hypothesis rejected Ho1 Ho2 Ho3 Ho5 Ha7
7.3 Review of the empirical results interpretation

The study provided insightful findings related to the factors that impact on whistle-blowing at a
financial institution. The empirical results revealed clear causal relationships between
independent variables and their collective influence on the intervening variable.
The basis for accepting or rejecting the hypotheses was statistical significant correlations
between the expected variables that influence on whistle-blowing determinants, as proposed
by the literature review of this chapter, and the statistical evidence supporting this influence
based upon the descriptive statistics results presentation and interpretation.
The empirical results discovered that most of these factors are interlinked, based upon the
various variables that loaded onto the individual factors even though they were not expected
to measure the influence on these factors. The empirical results found a strong trust
relationship between employee and the direct management, and also discovered that the
organisational leadership is a vital aspect with regard to how CS employees will expose
wrongdoing via internal whistle-blowing channels as opposed to external whistle-blowing
channels.
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The empirical results further highlighted some of the key character variables as determinants
of whistle-blowing to be control (to correct), performance (work performance), self-confidence
and tenacity (perseverance). This is consistent with the literature review and the sections
comprising the introduction and background in Chapter 1, as illustrated by some of the
famous whistle-blowing cases.
The empirical results revealed inconsistent correlations between the prevention of negative
impacts on society and determinants of whistle-blowing. It also did not substantiate enough
statistical evidence to unequivocally support the motive and prevention variables as
determinants of whistle-blowing and the hypotheses related to the prevention and motive
factors were subsequently rejected.

This chapter provided an interpretation of the empirical results of the study. The descriptive
results presented in Chapter 6 were linked back to the hypothetical points of departure, and
accepted or rejected with statistical substantiation as to the reasons for acceptance or
rejection.
The interpretation and inferences from the statistical results served as the motivation for the
acceptance of the hypotheses (Ha1, Ha2, Ha3, Ha5 and Ho7) related to the whistle-blowing
determinants associated with trust, knowledge, character, situation and biographic variables
(gender, level of education and employment duration).
It also served as the motivation for the rejection of the motive and prevention hypotheses
(Ho4/Ha4 and Ho6/Ha6). The interpretation of the results provides the basis for the
recommendations and suggestions for future research presented in the study.
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The next chapter will summarise the main purpose, objectives and hypothetical points of
departure of the study. It also provides a summary of the key findings and subsequent
recommendations of the study.
It concludes with a brief discussion of the limitations of the study and provides suggestions for
possible future research.
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8 CHAPTER EIGHT: CONCLUSIONS AND RECOMMENDATIONS
“All that is necessary for the triumph of evil is that good men do nothing.”
- Edmund Burke.
8.1 Introduction
This chapter of the study provides, firstly a closing review of the research problem, the
research objectives, the hypothetical points of departure and the literature review. The
chapter secondly provides a closing review of the key findings and recommendations and
how these relate back to the research objectives. It thirdly provides insight into the limitations
of the research and suggests areas for possible future research. The chapter ends with a
closing summary and conclusion to the study.
8.2 Revision of the research problem

The quantum of research problem statement indicates that Bank X has been suffering losses
in excess of R200m (which is also the management problem for bank X) per annum due to
internal wrongdoings. This statement contextualises both the value of the research problem
(R200m) as well as the root cause of the research problem (internal wrongdoings). The
research problem provided the basis for the formulation of the research objectives.
8.3 Revision of the research objectives

The primary research objective of the study was to analyse the factors that encourage and
discourage employees to engage in the act of whistle-blowing when becoming aware of
wrongdoings, as this could positively impact on the research problem.
The secondary objectives of the study were to investigate if correlations exist between the
independent variables and the intervening variable. The secondary objectives of the study
were further presented as follows:
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variables related to trust.
variables related to knowledge.
variables related to character.
variables related to motive.
variables related to situation.
variables related to prevention.
biographical variables.
The research objectives provided the basis for the formulation of the hypothetical points of
departure of the study.
8.4 Revision of the hypothetical points of departure

The hypotheses were formulated to test the expected outcome of something in the real world
according to the findings of previous literature or academia by evaluating variables that
influence the factors that impact on whistle-blowing. A summary of the hypothetical points of
departure of the study were as follows:
• Ho1 was rejected as statically significant correlations were found to exist between
variables related to the trust determinants of whistle-blowing. Based on the statistical
findings Ha1 was accepted. The variables that contributed to the trust determinants of
whistle-blowing were management, leadership, fairness, availability, support, status and
comprehension.
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variables related to the knowledge determinants of whistle-blowing. Based on the
statistical findings Ha2 was accepted. The variables that contributed to the knowledge
determinants of whistle-blowing were comprehension, legislation, awareness, anonymity,
responsibility and choice.
variables related to the character determinants of whistle-blowing. Based on the statistical
findings Ha3 was accepted. The variables that contributed to the character determinants
of whistle-blowing were control, performance, confidence, tenacity, values and morals.
• Ho4 and Ha4 were both rejected on the basis that the reliability of the factor analysis
results related to these 2 hypotheses were found to be not reliable (Cronbach alpha
coefficient score < 0.7). Some studies have accepted lower consistency and validity
benchmarks for their exploratory social research, but it was felt that this would
compromise the high statistical standards applied in this study.
findings Ha5 was accepted. The variables that contributed to the character determinants
of whistle-blowing were frequency, severity, obedience and compliance.
• Ho6 and Ha6 were also both rejected on the basis that the reliability of the factor analysis
results related to these 2 hypotheses were found to be not reliable (Cronbach alpha
coefficient score < 0.7), same as for Ho4 and Ha4.
findings Ha7 was accepted. The variables that contributed to the biographical
determinants of whistle-blowing were gender, level of education and employment duration.
The hypothetical points of departure formed the basis for the development of the research
instrument which was compiled after a thorough literature review and subsequent research
methodology.
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8.5 Revision of the literature review
Chapter 4 of the study presented the literature and theoretical study around variables that
impact on whistle-blowing. From the various definitions provided by many researchers in the
field of whistle-blowing, the definition of whistle-blowing was adopted as: “The disclosure by
organization members (former or current) of illegal, immoral or illegitimate practices
(wrongdoing) under the control of their employers, to persons or organizations that may be
able to effect action” (Near & Miceli, 1985:6).
Chapter 1 also provided basic definitions of wrongdoing (the disclosure), a whistle-blower (the
employee) and whistle-blowing channels. In terms of factors that impact on whistle-blowing,
the main focus was on the variables as determinants of whistle-blowing in terms of the
following:
• The personal characteristics.
• The role of ethical values or belief frameworks.
• Typical motives and emotions.
• Determinants of organisational failure to detect wrongdoing.
• Influence of group dynamics and corporate structures on whistle-blowing.
• External channels available to whistle-blowers.
The literature review highlighted the key variables expected to influence the factors that
impact on whistle-blowing. These variables formed the basis of the research instrument that
was designed to test these findings empirically.
The references section of this study includes both sources of literature and non-literature.
Table 18 presents a summary of the selected sources of literature reviewed in this study:
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Table 18: Summary of the selected sources of literature reviewed
Title of literature or academia work Authors and researchers Year

Common law – common mistakes? Protecting whistleblowers in De Maria 2006
Australia, New Zealand, South Africa and the United Kingdom
The corporate whistleblower’s survival guide Devine & Maassarani 2011
Personal and Policy Implications of Whistle-Blowing Dryburg 2009
Managing the unwanted truth: A framework for dissent strategy Edmondson & Munchus 2007
The impact of corporate ethical values on perceptions of earnings Elias 2004
management
Dealing with dissent: Whistle blowing, egalitarianism, and the republic of Evans 2008
the firm
Whistle-blowing as a form of advocacy: Guidelines for the practitioner Greene & Latting 2004
and organization
Looking beneath the surface: The impact of psychology on corporate Hall 2007
decision making
Corporate financial crime: Social diagnosis and treatment Hansen 2009
Whistle blowing and whistle blower protection in the South African public Holtzhausen 2007
sector
Measuring corporate integrity: A survey-based approach Kaptein & Avelino 2005
Whistleblowing in the South African labour law Malan 2010
The ethical dilemmas of whistle-blowing and corruption in the South Mbatha 2005
African Public Sector
Whistle-blowing in Organizations Miceli, Near and Dworkin 2008
The whistle-blowing zone: Applying Barnard's insights to a modern Nam & Lemak 2007
ethical dilemma
Effects of in-group and out-group support on behavioral consistency: Nonami 2008
The majority and minority in the context of an intergroup belief cross
Moral Development: Advances in Research and Theory Rest 1986
Ethical Climates and Contextual Predictors of Whistle-Blowing Rothwell & Baldwin 2006
A study of the ethical views of final year South African accounting Sadler & Barac 2005
students, using vignettes as examples
The approach and avoidance function of guilt and shame emotions: Schmader & Lickel 2006
Comparing reactions to self-caused and other-caused wrongdoing
Corporate ethics and trust in intra-corporate relationships: An in-depth Svensson & Wood 2004
and longitudinal case description
On whistle blowing judgment and intention: The roles of positive mood Zhang, Chiu and Wei 2009
and organizational ethical culture
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8.6 Revision of the key findings
Chapters 6 and 7 presented and interpreted the key findings from the empirical research. On
the one hand employees have a significant moral obligation (to expose wrongdoing) towards
their organisational shareholders, the communities they live in and society in general. By
disclosing the wrongdoing whistle-blowers hopes to put a stop to wrongdoing, but since they
blow the whistle on their own team (the other organisational employees), it is often seen as a
violation of their loyalty. For an organisation like Bank X the contentious issues around
whistle-blowing remains. Some of these, amongst others include:
• When is it appropriate to blow the whistle, and under what circumstances?
• When is internal or public disclosure more appropriate?
• Should the whistle-blower be rewarded or isolated?
• Should all perceived wrongdoing be reported, or only the serious aspects?
According to Bowie, (1982:25-26) the following requirements are, amongst others justifiable
causes for whistle-blowing:
• Preventing unnecessary harm to others.
• Using all available internal channels to correct the wrongdoing before public disclosure.
• The whistle-blower has evidence that would persuade a reasonable person.
• It is perceived that serious danger can result from the wrongdoing.
• The motives for blowing the whistle are morally and ethically sound.
• The whistle-blower’s action has a reasonable chance of succeeding.
According to Westin (1981:134-134) some of the problems associated with whistle-blowing,

amongst others are as follows:
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• The facts according to the whistle-blower are not always accurate and correct.
• Inadequate employees sometimes blow the whistle to avoid corrective sanctions.
• Sometimes the disruption caused by whistle-blowing is greater than the wrongdoing itself.
• The legal definitions of safe environments and prevention of danger to property or health
are sometimes unclear.
Figure 10 provides a high level overview of the key findings of the study:
Figure 10: Key findings overview
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Key finding 1:
The exploratory research found that the trust relationships between CS employees and their
managers and/or other leaders in Bank X were key determinants of whistle-blowing. The
variables expected to influence the nature of the trust relationship between employees and
organisational management were consistent with the expected variables proposed by the
literature review.
Healthy trusts relationships mitigate aspects related to fear, and reputation as these variables
did not load significantly on the trust factor. It also enhanced the perceived support and
assistance that the organisational leadership provides to whistle-blowers in protecting them,
rather than engaging in retaliation and victimisation towards them.
The research problem statement inferred that the nature of the trust relationships within Bank
X was not healthy as demonstrated from the quantifiable losses incurred (R200m per annum)
as a result of internal wrongdoing which could have possibly been prevented or at least
limited by whistle-blowing. The research also found that the CS employees trusted
management to be available and supportive to deal with wrongdoings exposed by whistle-
blowing.
The Spearman Rank Order Correlation revealed a strong correlation between the trust and
knowledge determinants of whistle-blowing. This implies that the more knowledgeable the
employees and the management of CS and Banks X are, the healthier the trust relationships
will be, and vice versa.
Key finding 2:
The research results indicated strong correlations between the knowledge variables and
whistle-blowing determinants. The awareness and comprehension of the whistle-blowing
policies and processes of Bank X positively influenced the willingness of CS employees to
blow the whistle on wrongdoing.
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This can be attributed to the anxiety and fear of the not knowing how to correctly expose the
wrongdoing which could results in the issue not being rectified and the individuals being
isolated from the comfort and support of their relevant peer groups.
It was also found that knowledge about the legislative protections enables the prospective
whistle-blowers to use external whistle-blowing channels, rather than internal whistle-blowing
to report wrongdoings in the event that they do not hold appropriate trust relationships with
their internal CS managers or Bank X leadership.
This suggests that CS and Bank X will be well served by devising educational type
programmes to promote the knowledge about the internal whistle-blowing policies and
procedures as well as the legislative protective measures available to manage and govern
protected disclosures to external channels.
Key finding 3:
The exploratory research uncovered the key character variables (of the CS employees) as
determinants of whistle-blowing in CS. These character variables included control (in terms of
the desire of CS employees to correct perceived wrongdoings), high job performance levels
(as to ensure there are no skeletons in the closets of these employees), confidence to
disclose issues that others won’t (subject to the trust and knowledge variables) and tenacity
(to see something through even if the road ahead is rocky and full of thorns).
The secondary research objectives inferred that the CS employees demonstrated many of
these character variables. This inference was confirmed by the results and subsequent
acceptance of Ha3. It also implies that the values and moral standards of the CS employees
are aligned to whistle-blowing behaviours, as demonstrated by their character qualities.
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The level of education and management position had little or no impact on the association
with whistle-blowing. This implies that the responsibility to report wrongdoing is distributed
equally to all CS employees, regardless of what position to hold or how well they are
educated.
These character qualities that positively correlate to whistle-blowing determinants can be

fused into the Human Resource (HR) selection and recruitment criteria during the hiring
processes, as it will ensure these character qualities are incorporated into the existing and
future CS workforce.
Key finding 4:
The research results revealed that CS employees will disclose situational wrongdoings if they
perceive it to be serious issues or ones that are frequently repeated (without any
consequences). It also underscored that if the reporting of wrongdoing is required by law it will
be disclosed in order to be compliant (situation to self-preserve.)
These findings are somewhat disturbing as it implies that minor issues of wrongdoing might
not be reported at all, and if the wrongdoing is only a once-off event it might be tolerated
rather than disclosed. It also signifies that CS employees will blow the whistle only to obey the
law rather than acting on the moral responsibility to do so.
The CS business unit and Bank X should instil a culture based on values and principles rather
than one of compliance and self-perseverance, as illustrated by the negative loading of the
culture variable onto the situation factor.
Key finding 5:
There was no statistically significant differentiation between the biographical variables and the
determinants of whistle-blowing. These findings are consistent with the work of Vadera,
Aguilera and Caza, (2009:555) and Zhang, et al. (2009:636).
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These findings suggest that gender, level of education and employment duration of the CS
employees in Bank X are therefore not good precursors of their propensity to become whistle-
blowers by reporting wrongdoings.
8.7 Recommendations
The results from this study implies that Bank X and CS has much work to be done in order to
elevate whistle-blowing within the organisation to the point that it is an effective opponent to
wrongdoing. Likewise it seems that few potential whistle-blowers understand the
requirements to ensure effective whistle-blowing. The recommendations from this study are
therefore specified for both the organisation (Bank X) and the potential whistle-blowers (CS
employees).
The recommendations for the organisation (Bank X) are:
• Develop and foster an organisational culture that do not normalise wrongdoing. This
recommendation is consistent with the work of Ashford & Anand (2003) and aligned to key
findings 1 and 4 of this study as it aims to combat disruption of internal wrongdoers who
attempts to reframe the culture by legitimising corrupt practises in the name of making
profits for the organisation and its shareholders. This was also the case at Enron as
discussed in Chapter 1 of this study.
• Develop and implement a programme aimed at educating and promoting whistle-blowing

as a tool to combat corruption. This programme should be regulated in similar fashion as
the various other compliance internal programmes, making it compulsory for every
employee to participate and complete the programme. This will ensure the appropriate
knowledge and comprehension levels around the principles and processes of whistle-
blowing. This recommendation is consistent with the work of Hatala and Flemming (2007),
and aligned to key finding 2 of this study.
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• Create and implement an anti-retaliation policy. Many organisations today have taken the
time and effort to develop whistle-blowing policies and procedures. In contrast, these
policies rarely provide guidelines on how to identify, remediate and eliminate retaliation
when an employee has blown the whistle on wrongdoing (Heard & Miller, 2006). This
policy should include clear steps to identify and root out any retaliation or discrimination
against those who made protective disclosures. This recommendation is aligned with key
findings 1 and 2 as it will positively contribute to both the trust and knowledge variables
discussed in this study.
• Develop and implement a character recognition programme for whistle-blowing

disclosures that positively contributed to eliminate wrongdoing. It is important that such a
programme is devised to reward only whistle-blowers that followed the correct channels
and procedures to disclose the wrongdoing, and that the disclosure is based on principles
rather than situational factors such as the reward itself. It is also important that managers
of the whistle-blowers be recognised for the role in whistle-blowing if they managed the
process effectively and in a trusting manner that did not entertain retaliation or
victimisation towards the whistle-blower (as this also rewards the character of the
manager). This recommendation is consistent with key finding 3 of this study.
The recommendations for the potential whistle-blowers (CS employees) are:
• Have irrefutable documented evidence (aligned with knowledge) of the perceived

wrongdoing readily available to substantiate the disclosure. Diligently adhere to every step
of the organisational whistle-blowing policy and procedures. Once the evidence is secured
the starting point of any intended disclosure should be a discussion in confidence (aligned
with trust) with the direct manager, unless if the perceived wrongdoing is by the manager.
This recommendation is aligned to key finding 1 of this study.
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• Familiarise yourself with the internal whistle-blowing policies and the external legislative
protection mechanisms available, and adhere to these policies/laws when blowing the
whistle. This knowledge and adherence will serve the intended whistle-blower well to
ensure the disruption on the organisational stakeholders is not greater than the actual
wrongdoing itself (Westin, 1981). This recommendation is aligned to key finding 2 of this
study.
• Ensure a that you maintain a pristine work performance and ethical standards (aligned to
character) at all times before and after blowing the whistle, to deny others from finding
skeletons in your closet in retaliation as a means to discredit and isolate the whistle-
blower. This is especially true for spending time at the office trying to gather evidence of
the wrongdoing at the expense of your employer (Devine & Maassarani, 2011). This
recommendation is aligned to key finding 3 of this study.
• Be consistent in your approach to wrongdoing, by choosing to disclose the wrongdoing

based on your principles, ethics and moral convictions rather than the situational variables
related to the severity or frequency. This will ensure an environment that does not
normalise wrongdoing by only reporting serious issues (Ashford & Anand ,2003). This
recommendation is aligned to key finding 4 of this study.
8.8 Limitations of the study results

According to Cooper and Schindler (2008), all exploratory social research has limitations, and
that sincere investigators need objective researchers to judge the validity of their findings. The
reader should be aware of the following limitations:
• The main limitation of this study is that the research was conducted in only one of the
business units (CS) of Bank X and therefore not representative of the entire Bank X
Group.
• The research was also conducted in only one of the major banks in South Africa, and
therefore not representative of the entire banking industry.
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• The research results are representative of a moment in time only, as the study does not
cater for trend based analysis over an extended time period.
• Organisational factors such as the recent financial performance, structural changes and
leadership changes can all potentially have an impact on the whistle-blowing culture of the
organisation, thereby potentially distorting the results of the study.
• Information about the number of whistle-blowing cases related to Bank X, and what the
quantum or value of these reported disclosures amounted to are not freely available.
Therefore, the dependant variable of this study (losses in excess of R200m) was not
statistically tested and analysed as the breakdown of this information was not readily
available from Bank X.
8.9 Suggestions for future research

Whistle-blowing is a relatively new research area. The number of publications relevant to this
field of study within a South African business environment context is rather limited compared
to that of international publications.
The following future recommendations can be made:
• A study should be conducted to test the impact that the type of wrongdoing (e.g. financial
fraud versus environmental damage) has on the propensity of employees to blow the
whistle, as this could provide valuable insight into the why-antecedents of whistle-blowing.
• The research should be conducted within a different business unit of Bank X in order to
test if the findings of this study are representative of the entire Bank X Group.
• The research should be conducted on the other major banks in South Africa in order to
test if the findings of this study are representative of the South African banking industry.
• Further research can be conducted to test how whistle-blowing responsibilities can be

incorporated into the performance contracts between the employer and the employee.
• A longitudinal study should be conducted to test whether the results of this study is
sustainable over time.
- 106 -
8.10 Summary and conclusion
The literature review of this study proposed numerous variables that are associated with
determinants of whistle-blowing. In this chapter the key aspects of the study were highlighted
in relation to the primary and secondary objectives of the study. The hypotheses were
reviewed and the key findings of the study were presented. This indicates that the objectives
of the study were met.
The findings of the study proposed practical suggestions to the organisation on how to
improve the whistle-blowing environment, and suggested some measures to the prospective
whistle-blower to ensure effective disclosures that eradicates the wrongdoing in a controlled
manner.
Hopefully this study will motivate students and organisations alike to advance the proposed
future research suggestions.
- 107 -
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- 114 -
10 APPENDICES
10.1 Appendix A – Research Instrument
02 Aug 2012
TOPIC: FACTORS THAT IMPACT ON WHISTLE-BLOWING AT A FINANCIAL

INSTITUTION
Dear Sir/Madam
I, Benjamin Carl Britz am undertaking a research project which forms part of my studies
toward the Magister Commercii (MCom) qualification at the University of Johannesburg. To
this extent, the executive leadership of ABSA Cash Solutions (ACS) has provided me with the
necessary approval to conduct a survey and to analyse the factors that impact on whistle-
blowing within ACS. I therefore kindly request that you voluntarily complete the attached
questionnaire as it should take no longer than 15 minutes of your time.
All information will be kept strictly confidential and only used for the purpose of academic
research. Please do not enter your name or contact details anywhere on the questionnaire as
to remain completely anonymous. Should you have any queries or comments regarding this
survey, you are welcome to contact me telephonically at 011 350 0956 or e-mail
ben.britz@absa.co.za.
Yours sincerely
________________________
Benjamin Carl Britz
Student No: 201029162
University of Johannesburg
- 115 -
Section A – Terms, Definitions and Examples
Before you proceed to complete the questionnaire it is important that you are familiar with the
terms "whistle-blowing" and "wrongdoing" in the context they are used throughout the
questionnaire.
a) What is the meaning of the term "whistle-blowing" in the context of this

questionnaire?
The term "whistle-blowing" can be described as “the disclosure by organization members
(former or current) of illegal, immoral or illegitimate practices under the control of their
employers, to persons or organizations that may be able to effect action” (Near and Miceli,
1985:4). In its simplest form it means that organisational staff members (as a whistle-blowers)
report things they consider or perceive to be part of wrongdoing.
The disclosure is usually to management or leaders within their organisation, but can also be
through anonymous channels internally within the organisation or in extreme situations to
external reporting channels. The term whistle-blow (the act) therefore also relates to the term
whistle-blower (the person).
b) What is meant with the term "wrongdoing" in the context of this questionnaire?
The term "wrongdoing" can be broadly defined as corrupt, fraudulent, illegal, immoral or
illegitimate practices in the organisation. This definition does not limit the wrongdoing to these
behaviours only as it also extends it to acts such a bullying and misallocation of resources.
c) How many of the questions do I need to complete?

Please answer all the questions of the questionnaire by making a cross (x) in the relevant
block most appropriate to your answer. Sometimes the question will allow you to specify your
own option by selecting the (Other) option. Please write down your own option (if applicable)
in the space provided adjacent to the (Other) option.
d) How to complete the questions?

Suppose you are a female respondent that has to select the appropriate option from a list of
options that indicate your gender. The correct way to answer is to clearly cross (x) the female
option from the listed options of the question. The 2 examples on the following page illustrate
this:
- 116 -
Example 1 – What is your gender?
a) Male 1
b) Female 2
Suppose you are an Orlando Pirates soccer team supporter but the listed options from the
question does not provide for such an option. The correct way to answer the question would
be to clearly cross (x) next to the Other option and then write Orlando Pirates in the adjacent
section provided. The example below illustrates this:
Example 2 – Which local SA soccer team do you support?

a) Kaizer Chiefs 1
b) Amazulu 2
c) Supersport United 3
d) Other (please specify adjacent) Orlando Pirates 4
You cannot select more than one option (from the listed options) for any questions in Sections
A of the questionnaire. Please select only the most appropriate option to the question. Thank
you for your co-operation in this regard.
Section B – Biographical information

This section of the questionnaire (Q1 to Q10) refers to background or biographical
information. This information allows for comparative analysis of groups of respondents.
Please select only one option from the list of options per question. Kindly ensure that all the
questions in this section are answered.
Please proceed to the next page to complete the actual questions.
- 117 -
1) What is your gender?
a) Male 1
b) Female 2
2) What is your current age (in complete years)?

a) Less than 20 years old 1
b) 20 to 29 years old 2
c) 30 to 39 years old 3
d) 40 to 49 years old 4
e) 50 years or older 5
3) What is your ethnic classification?

a) Black 1
b) White 2
c) Coloured 3
d) Indian or Asian 4
e) Other (please specify adjacent) 5
4) What is your current marital status?

a) Single 1
b) Married 2
c) Divorced 3
d) Widow / Widower 4
e) Co-habitant (living together) 5
- 118 -
5) What are your religious beliefs / orientation?
a) Christian 1
b) Islam 2
c) Hinduism 3
d) Other (please specify adjacent) 4
6) In what province of SA is your workplace located at?

a) Gauteng 1
b) Free State 2
c) KwaZulu-Natal 3
d) North West 4
e) Mpumalanga 5
f) Limpopo 6
g) Northern Cape 7
h) Eastern Cape 8
i) Western Cape 9
7) How would you describe the area that you reside in at present?
a) Urban 1
b) Rural 2
8) What is your current employment status?

a) Permanent staff member 1
b) Temporary staff member / Contract staff member 2
c) Contract staff members 3
- 119 -
9) What is your highest completed educational qualification?
a) Grade 11 or lower (Standard 9 or lower) 1
b) Grade 12 (Matric) 2
c) Undergraduate (Diploma or certificate) 3
d) Graduate (Degree) 4
e) Postgraduate (Honours, Masters or higher) 5
10) How long have you been employed in the organisation?

a) Less than 1 year 1
b) Between 1 and 3 years 2
c) Between 3 and 5 years 3
d) Between 5 and 10 years 4
e) More than 10 years 5
Section C – Exploring Whistle-blowing Influences

This section of the questionnaire (Q11 to Q15) explores the personal characteristics, motives,
situational variables, trust relationship aspects and factors that encourage or discourage
whistle-blowing. It also explores the importance rating placed on all of these variables.
Kindly respond to all the statements in terms of level of agreement and also rank all the
statements in terms of level of importance.
The example on the following page illustrates this:
- 120 -
Example3 – Coffee drinking behaviours
Level of Agreement Level of Importance
Extremely
important
important
important
important
Disagree
disagree
Strongly
Strongly
Slightly
Neutral
Neutral
Agree
agree
Not
Statements
a) Drinking coffee
1 2 3 4 5 1 2 3 4 5
relaxes me.
b) I drink coffee
because it is 1 2 3 4 5 1 2 3 4 5
fashionable.
c) Drinking coffee
1 2 3 4 5 1 2 3 4 5
causes cancer.
d) I prefer drinking tea to
1 2 3 4 5 1 2 3 4 5
drinking coffee.
e) Drinking coffee keeps
1 2 3 4 5 1 2 3 4 5
me awake.
Please proceed to the next page to complete the actual questions.
- 121 -
11) Personal characteristics
Please rate yourself with regard to each of these personal characteristics and also indicate
how important each of these personal characteristics are to you.
Extremely
important
important
important
Disagree
disagree
Strongly
Strongly
Slightly
Neutral
Neutral
Important
Agree
agree
Not
Statements
a) I have high moral

standards and ethical
1 2 3 4 5 1 2 3 4 5
values that oppose
wrongdoing.
b) I hold a formal
education that is 1 2 3 4 5 1 2 3 4 5
higher than grade12.
c) I consistently perform
1 2 3 4 5 1 2 3 4 5
very well at work.
d) I like to take control
and proactively
1 2 3 4 5 1 2 3 4 5
correct things that are
wrong.
e) I have a management
1 2 3 4 5 1 2 3 4 5
type position at work.
f) I have high self-
esteem and 1 2 3 4 5 1 2 3 4 5
confidence levels.
g) I am quite tenacious
when the going gets 1 2 3 4 5 1 2 3 4 5
tough.
- 122 -
12) Personal motives
Please rate yourself with regard to each of these personal motives and also indicate how
important each of these personal motives are to you.
Extremely
important
important
important
Disagree
disagree
Strongly
Strongly
Slightly
Neutral
Neutral
Important
Agree
agree
Not
Statements
a) I believe it is the
moral duty of all staff 1 2 3 4 5 1 2 3 4 5
to report wrongdoing.
b) I will report
wrongdoing if it can
1 2 3 4 5 1 2 3 4 5
prevent me from
getting into trouble.
c) I believe only serious
issues of wrongdoing 1 2 3 4 5 1 2 3 4 5
should be reported.
d) Whistle-blowers
should be rewarded if
1 2 3 4 5 1 2 3 4 5
they expose
wrongdoing.
e) I believe exposing
wrongdoing will put a 1 2 3 4 5 1 2 3 4 5
stop to it.
f) I believe wrongdoing
can put people’s lives 1 2 3 4 5 1 2 3 4 5
in danger.
g) Whistle-blowers
perform a great /
1 2 3 4 5 1 2 3 4 5
noble service to
society.
- 123 -
13) Situational variables
Please rate yourself with regard to each of these situational variables and also indicate how
important each of these situational variables are to you.
Extremely
important
important
important
Disagree
disagree
Strongly
Strongly
Slightly
Neutral
Neutral
Important
Agree
agree
Not
Statements
a) Wrongdoing should
be reported if it is of a 1 2 3 4 5 1 2 3 4 5
serious nature.
b) The organisational
culture does not 1 2 3 4 5 1 2 3 4 5
tolerate wrongdoing.
c) Management are
treating all staff 1 2 3 4 5 1 2 3 4 5
equally and fairly.
d) Wrongdoing should
be reported if it 1 2 3 4 5 1 2 3 4 5
happens quite often.
e) Management will
support staff who 1 2 3 4 5 1 2 3 4 5
report wrongdoing.
f) Wrongdoing should
be reported even if it
1 2 3 4 5 1 2 3 4 5
brings a friend into
trouble.
g) Wrongdoing should
be reported if it is 1 2 3 4 5 1 2 3 4 5
against the law.
- 124 -
14) Trust relationships
Please rate yourself with regard to each of these trust relationship statements and also
indicate how important each of these trust relationship statements are to you.
Extremely
important
important
important
Disagree
disagree
Strongly
Strongly
Slightly
Neutral
Neutral
Important
Agree
agree
Not
Statements
a) I have a good trust

relationship with my 1 2 3 4 5 1 2 3 4 5
direct manager.
b) I am familiar with
internal whistle- 1 2 3 4 5 1 2 3 4 5
blowing policies.
c) Whistle-blowers are
often victimised by 1 2 3 4 5 1 2 3 4 5
management.
d) Whistle-blowing in the
media gets more 1 2 3 4 5 1 2 3 4 5
effective results.
e) It is easy to get an
appointment with 1 2 3 4 5 1 2 3 4 5
senior management.
f) Reporting
wrongdoing to the
media can cause the 1 2 3 4 5 1 2 3 4 5
organisation a lot of
reputational harm.
g) I have a good trust
relationship with my
1 2 3 4 5 1 2 3 4 5
direct manager’s
boss.
- 125 -
15) General factors that encourage or discourage whistle-blowing
Extremely
important
important
important
Disagree
disagree
Strongly
Strongly
Slightly
Neutral
Neutral
Important
Agree
agree
Not
Statements
a) Ethical behaviours
are very important in 1 2 3 4 5 1 2 3 4 5
the organisation.
b) Whistle-blowing
policies are easy to
1 2 3 4 5 1 2 3 4 5
understand and
apply.
c) Laws in SA protect
whistle-blowers when
1 2 3 4 5 1 2 3 4 5
they report
wrongdoing.
d) An anonymous tip-off
hotline is available to 1 2 3 4 5 1 2 3 4 5
staff.
e) Whistle-blowing
protects the interests
1 2 3 4 5 1 2 3 4 5
of shareholders and
customers.
f) Fraud and corruption
are corrupting 1 2 3 4 5 1 2 3 4 5
society.
g) Wrongdoing can
prevent harm to 1 2 3 4 5 1 2 3 4 5
people I care about.
This is the end of the questionnaire. Thank you for taking the time to complete all the
questions as specified. The data will be used strictly to further my academic research.
- 126 -

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FACTORS THAT IMPACT ON WHISTLE-BLOWING AT A

submitted in partial fulfilment of the requirements for the degree of

SUPERVISOR: DR. A. DROTSKIE

1 CHAPTER ONE: INTRODUCTION AND BACKGROUND TO THE STUDY

Figure 1: South African global corruption ranking ..................................................................... 6

Table 1: Banking sector background statistics ........................................................................ 26

- Dr. Martin Luther King Jnr.

In summary, the introductory section of this study paints a picture of organisational

Figure 1: South African global corruption ranking

Source: Adapted from the Corruption Perceptions Index 2011

1.1.2 Organisational and business unit introduction

1.4 The research problem

1.5.1 Primary objective

1.5.2 Secondary objectives

The secondary objectives of the study are presented as follows:

Figure 2 illustrates the conceptual framework of the research objectives:

FACTORS THAT IMPACT ON

Figure 2: Conceptual framework of the research objectives

Source: Adapted from Zikmund, Babin, Carr, & Griffin ( 2010:123)

• Trust is contextualised as the variable that assists in the better functioning of

• Knowledge is contextualised as the understanding and comprehension of the processes,

• Character is contextualised as the moral values and ethical choices demonstrated by

• Situation is contextualised as the organisational factors that influence behaviours and

• Prevention is contextualised as the aversion of further wrongdoing by reporting it to the

• Biographical is contextualised as the organisational employee variables such as age,

Contextualisation of the intervening variable

• Ho1: There is no statistical correlation between trust variables as determinants of whistle-

• Ha1: There is a significant statistical correlation between trust variables as determinants

• Ho2: There is no statistical correlation between knowledge variables as determinants of

• Ha2: There is a significant statistical correlation between knowledge variables as

• Ho3: There is no statistical correlation between character variables as determinants of

• Ha3: There is a significant statistical correlation between character variables as

• Ha4: There is a significant statistical correlation between motive variables as determinants

• Ho5: There is no statistical correlation between situation variables as determinants of

• Ha5: There is a significant statistical correlation between situation variables as

• Ho6: There is no statistical correlation between prevention variables as determinants of

• Ha6: There is a significant statistical correlation between prevention variables as

• Ho7: There is no statistical correlation between the biographical variables as

• Ha7: There is a significant statistical correlation between the biographical variables as

1.7 Literature review outline

• Published academical journals and relevant published textbooks;

• Unpublished dissertations and theses;

• Internet based sources.

• Whistle-blowing in terms of reporting or disclosure;

• The person engaging in the act of whistle-blowing;

• Employees and leadership; and

• Channels used to blow the whistle.

1.7.1.1 Definition of whistle-blowing (the act of reporting or disclosure)

1.7.1.2 Defining a whistle-blower (the individual)

1.7.1.4 Defining employees and leadership employees

1.7.1.5 Defining whistle-blowing channels

1.8.1 Method of the study

1.8.3 Data collection method and instrument

The potential benefits of the research are:

• Recommendations as to enhance policies, processes, governance and whistle-blowing

Chapter One: Introduction and background to the study

Chapter Two: Financial industry and banking sector overview

Chapter Three: Organisational and business unit overview

Chapter Four: Literature review and theoretical study

Chapter Six: Results presentation

Chapter Seven: Results interpretation

Chapter Eight: Conclusions and recommendations

- Thomas Jefferson to John Taylor, 1816.