Whistle blowing is an act to disclose an organizational wrongdoing to parties that can take action. Sherron Watkins was the vice president of Enron Corporation that became a whistle blower in 2001. She sent an anonymous memo to Enron Chairman Kenneth Lay regarding the misstatements on the financial report. Enron hired lawyers from Vinson & Elkins to do an investigation on the financial misstatement allegations (Ackman, 2002). According to the memo from the investigations, after Watkins identified herself Lay held a meeting with her to discuss about her concerns regarding her allegations. The memo failed to indicate what Lay told Watkins. The investigation from Vinson & Elkins concluded that the questionable transaction that Watkins was
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Leadership Approach It is very important to address the whistle blowing issues to avoid any bad publicity. Also, if an employee is being dismissed for whistle blowing may end up trying to recoup substantial damages against the employer that may hurt the company financially. According to Professors David Cooperrider and Leslie Sekerka there are two approaches to build whistle blowing in an organizational culture. First approach has a deficit focus: detects errors, analyze root causes, plan remedies, and implement corrections. The second approach has an appreciative and positive focus: seek and draw out human strengths so the organization self-organizes to be better. The first approach is more toward being reactive to the situation because it happens after the whistle blower reported a concern. The second approach is more toward prevention because it seeks to avoid the problem by encouraging employees to practice good working ethics.
According to Oliver and Daly from Santa Clara University, employees usually blow the whistle externally (report the problem to an external source) only when the internal whistle blowing was not being addressed. When they blow the internal whistle in the hope of getting the problem fix but believe that the managers are not listening to their concerns causes them to blow the whistle externally. It is very important for managers to