Bad news reporting on troubled IT projects: Reassessing the mediating role of responsibility in the basic whistleblowing model

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Abstract

Whistleblowing theory has been used in the information systems literature to help explain willingness to report bad news on troubled projects. According to whistleblowing theory, an individual first assesses the situation to determine if any action needs to be taken, then considers whether there is any personal responsibility to act, and this, in turn, shapes his/her choice of action. Information systems researchers have interpreted and used the basic whistleblowing model in a way that suggests that responsibility fully mediates the relationship between assessment and choice of action. While prior research has shown support for the basic whistleblowing model, the question of whether responsibility partially or fully mediates the relationship between the assessment and choice of action has not been tested empirically. This research provides theoretical justification for a partial mediation model. Using three different datasets, we provide empirical support for the partial mediation model.

Introduction

Enron employee Sherron Watkins was widely recognized for her role in blowing the whistle on Enron's highly questionable accounting practices in 2002 (Hamburger, 2002). According to an address that she gave at the Academy of Management Meeting in August 2003, she stumbled onto Enron's accounting shenanigans in her back-office role that involved prioritizing the assets that Enron had for sale. Though she had not practiced accounting for more than 10 years, she “knew accounting had not gotten that creative” (Watkins, 2003, p. 121). When she learned that certain partnership deals used Enron stock as hedges against risky investments, she brought this to the attention of Chief Executive Kenneth Lay writing on the margin of one such deal: “There it is! That is the smoking gun. You cannot do this.” But exactly what motivated Ms. Watkins to issue this and subsequent warnings to Mr. Lay, first with an anonymous 1-page memo and then with meetings and more memos?

Whistleblowing can be seen as a form of prosocial behavior (Staub, 1978), which is positive social behavior that is intended to benefit both the whistleblower and other persons in the organization (Dozier and Miceli, 1985). According to whistleblowing theory, an individual first assesses the situation to determine if any action needs to be taken, then considers whether there is any personal responsibility to act, and this, in turn, shapes his/her choice of action. Returning to the Enron whistleblowing example, it seems clear that Ms. Watkins assessed the situation and determined that there were some serious problems that needed attention. As she put it: “I ran into what I thought was the worst accounting fraud I’d ever seen” (Watkins, 2003, p. 120). As she describes, she started making some inquiries to understand the highly questionable accounting practices, but she “never heard reassuring answers” (Watkins, 2003, p. 120).

But why did Watkins approach Lay with the problem? Did her assessment of the situation lead her to conclude that she had a personal responsibility to act, and is that what drove the choice of action to report the bad news to Lay? Or, was it the assessment of the situation itself, and the realization that action needed to be taken, that drove the choice of action? In other words, to what extent is the relationship between assessment and choice of action mediated by perceptions of personal responsibility? The answer to this question has important ramifications for both research and practice and in this paper we seek to address it.

Prior work on whistleblowing (Dozier and Miceli, 1985) has spawned what Smith and Keil (2003) refer to as the “basic” whistleblowing model. Grounded in the work of Latane and Darley (1970), the model posits that the decision of whether or not to engage in whistleblowing behavior can be modeled on the basis of three basic constructs: (1) assessment of the situation to determine if any action needs to be taken, (2) determination if there is any personal responsibility to act, and (3) choice of action. The basic whistleblowing model has been interpreted and used by IS researchers in a way that suggests that responsibility fully mediates the relationship between assessment and choice of action. While prior research has shown support for the basic whistleblowing model, the question of whether responsibility partially or fully mediates the relationship between the assessment and choice of action has not been tested empirically. In this study, we provide theoretical justification for a partial mediation model. Using three different datasets collected independently from three separate controlled laboratory experiments, we use both regression analysis and PLS analysis to provide empirical evidence in support of the partial mediation model.

Section snippets

The origin of the basic whistleblowing model

Whistleblowers are defined as organization members “who disclose illegal, immoral or illegitimate practices under the control of their employer to persons or organizations who may be able to effect action” (Near and Miceli, 1985, p. 6). The basic whistleblowing model developed by Dozier and Miceli (1985) has its origins in Latane and Darley, 1970, Latane and Darley, 1968 bystander intervention framework. Latane and Darley, 1970, Latane and Darley, 1968 were interested in what drives a bystander

The basic whistleblowing model applied to bad news reporting on IT projects

The high incidence of project failure continues to be a serious problem in the information technology (IT) field (Zarrella et al., 2005). While there are undoubtedly many reasons why IT projects can fail, a project member's reluctance to report bad news about the true status of an IT project has been recognized as an important factor that may contribute to IT project failure (Tan et al., 2003). If an IT project member withholds bad news about a project from his/her superiors, escalation of

Reassessing the mediating role of responsibility

In this study, we reassess the mediating role of responsibility in the basic whistleblowing model, as it relates to IT project reporting. Specifically, we posit that responsibility does not fully mediate the relationship between assessment and willingness to report. Instead, we argue that responsibility only partially mediates the relationship between assessment and willingness as shown in Fig. 2.

While the basic whistleblowing model implies a particular sequential flow in terms of

Research approach

In order to test our hypothesis, we used three different datasets that were collected as part of a multi-paper dissertation involving a series of three separate experiments which focused on bad news reporting in an IT project context (Park et al., 2008, Park et al., 2009, Park and Keil, 2009). The experiments were based on hypothetical scenarios involving troubled IT projects in which subjects were asked to indicate their willingness to report the bad news. We developed four treatment scenarios

Analysis and results

Both convergent and discriminant validity were evaluated to validate the measurement of the constructs. In order to test the convergent validity, we examined standardized loadings, Cronbach's Alpha, composite reliability, and average variance extracted for each of the constructs. All met the accepted thresholds, providing good evidence of convergent validity. The results of this analysis are shown in Appendix B for each of the three datasets. In order to evaluate discriminant validity, we

Discussion

While the evidence for a partially mediated model is quite strong and consistent across the three datasets, looking across datasets we do see that the strength of the relationship between assessment and willingness to report drops by varying amounts when the mediator is added to the regression equation. In other words, the degree of partial mediation differs across datasets. The different degrees of partial mediation can be compared by examining how much the direct effect of assessment on

Implications

This study has implications for both research and practice. The study's key implication for research is that when we conduct research on bad news reporting in an IT project context, we ought not to assume that responsibility fully mediates the relationship between perceptions of whether something ought to be reported and an individual's willingness to report. Therefore, when using the basic whistleblowing model in this context, it is important that researchers also include a direct path from

Conclusions

Using two analytical approaches and three separate datasets, we obtained a consistent pattern of results providing strong empirical support that responsibility partially mediates the relationship between assessment and willingness to report. This finding has important implications for research because it suggests that the basic whistleblowing model, which has been embraced by IS researchers in a manner that assumes responsibility fully mediates the relationship between assessment and

Mark Keil is the Board of Advisors Professor of Computer Information Systems in the J. Mack Robinson College of Business at Georgia State University. His research focuses on IT project management and includes work on preventing IT project escalation, identifying and managing IT project risks, and improving IT project status reporting. His interests also include IT implementation and use. He has published more than 100 refereed papers and has served on the editorial boards of many academic

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  • Cited by (0)

    Mark Keil is the Board of Advisors Professor of Computer Information Systems in the J. Mack Robinson College of Business at Georgia State University. His research focuses on IT project management and includes work on preventing IT project escalation, identifying and managing IT project risks, and improving IT project status reporting. His interests also include IT implementation and use. He has published more than 100 refereed papers and has served on the editorial boards of many academic journals. He holds B.S.E., S.M., and D.B.A. degrees from Princeton University, M.I.T. Sloan School, and Harvard Business School respectively.

    ChongWoo Park is an Assistant Professor of Information Technology at Georgia Gwinnett College. He earned BE and MBA degrees from Korea University, an MS degree from Syracuse University, and a PhD in computer information systems from the J. Mack Robinson College of Business at Georgia State University. His research interests include IT project management, technology adoption, knowledge management and systems, information seeking behavior, and IT use in education. His research has been published in journals including Decision Sciences, Journal of the Association for Information Systems, IEEE Transactions on Engineering Management, and International Journal of Information and Communications Technology Education.

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