Abstract
Firms are under increasing pressure to implement effective internal whistleblowing systems. While firms can provide incentives to encourage internal whistleblowing, it remains controversial how such incentives should be structured. We examine whether the effectiveness of incentives encouraging internal whistleblowing is a joint function of the framing of such incentives (reward or penalty) and the strength of descriptive norms supporting internal whistleblowing. We predict and find in a lab experiment that penalties lead to a greater increase in internal whistleblowing (compared to rewards) when descriptive norms supporting whistleblowing are stronger. Our study contributes to the previous accounting literature on dishonesty and the role of management control systems design in promoting honesty and ethical norms in organizations. We also contribute to an emerging accounting literature on the links between controls, norms, and individual behavior by distinguishing between descriptive norms and injunctive norms and by highlighting the interplay between these two types of norms. Our results have important implications for organizations considering adopting incentives to encourage internal whistleblowing.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 1757-1778 |
| Number of pages | 22 |
| Journal | Contemporary Accounting Research |
| Volume | 34 |
| Issue number | 4 |
| DOIs | |
| State | Published - Dec 1 2017 |
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ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
Cite this
The Effect of Incentive Framing and Descriptive Norms on Internal Whistleblowing. / Chen, Xiaoling; Nichol, Jennifer E.; Zhou, Flora H.
In: Contemporary Accounting Research, Vol. 34, No. 4, 01.12.2017, p. 1757-1778.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The Effect of Incentive Framing and Descriptive Norms on Internal Whistleblowing
AU - Chen, Xiaoling
AU - Nichol, Jennifer E.
AU - Zhou, Flora H.
PY - 2017/12/1
Y1 - 2017/12/1
N2 - Firms are under increasing pressure to implement effective internal whistleblowing systems. While firms can provide incentives to encourage internal whistleblowing, it remains controversial how such incentives should be structured. We examine whether the effectiveness of incentives encouraging internal whistleblowing is a joint function of the framing of such incentives (reward or penalty) and the strength of descriptive norms supporting internal whistleblowing. We predict and find in a lab experiment that penalties lead to a greater increase in internal whistleblowing (compared to rewards) when descriptive norms supporting whistleblowing are stronger. Our study contributes to the previous accounting literature on dishonesty and the role of management control systems design in promoting honesty and ethical norms in organizations. We also contribute to an emerging accounting literature on the links between controls, norms, and individual behavior by distinguishing between descriptive norms and injunctive norms and by highlighting the interplay between these two types of norms. Our results have important implications for organizations considering adopting incentives to encourage internal whistleblowing.
AB - Firms are under increasing pressure to implement effective internal whistleblowing systems. While firms can provide incentives to encourage internal whistleblowing, it remains controversial how such incentives should be structured. We examine whether the effectiveness of incentives encouraging internal whistleblowing is a joint function of the framing of such incentives (reward or penalty) and the strength of descriptive norms supporting internal whistleblowing. We predict and find in a lab experiment that penalties lead to a greater increase in internal whistleblowing (compared to rewards) when descriptive norms supporting whistleblowing are stronger. Our study contributes to the previous accounting literature on dishonesty and the role of management control systems design in promoting honesty and ethical norms in organizations. We also contribute to an emerging accounting literature on the links between controls, norms, and individual behavior by distinguishing between descriptive norms and injunctive norms and by highlighting the interplay between these two types of norms. Our results have important implications for organizations considering adopting incentives to encourage internal whistleblowing.
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U2 - 10.1111/1911-3846.12325
DO - 10.1111/1911-3846.12325
M3 - Article
AN - SCOPUS:85031716384
VL - 34
SP - 1757
EP - 1778
JO - Contemporary Accounting Research
JF - Contemporary Accounting Research
SN - 0823-9150
IS - 4
ER -