Motivations for reporting organizational misconduct by professional bystanders

Abstract

The vast majority of business offenses, whether systematic and serious or small and relatively harmless, remains undetected by public regulatory authorities. Yet, they are often witnessed in some form by employees, local residents, customers, competitors, accomplices or other parties. Reporting these signals to authorities can provide valuable information to regulatory agencies’ own detection and investigation activities, and thus contribute to more efficient and effective enforcement. Although an extensive scholarship exists on reporting, it has mainly focused on whistle-blowers: insiders who are directly part of or involved in the offending behaviour. This study focuses on one type of external witnesses, namely bystanders who maintain a professional relationship with a company. These could include suppliers, customers, and competitors. These parties distinguish themselves from whistleblowers in the sense that although they sustain a close relation with a (suspected) offending business, they are not directly part of the organization, let alone do they take part in the offense. Therefore, the name ‘bellringers’ has been suggested for this category. Building on the existing literature about whistleblowing and bell-ringing, this paper asks what motivates ‘bellringers’ to report suspected business violations to enforcement authorities, and how they experience the reporting process. To answer this question, an extensive empirical study was carried out of more than 350 reports of offenses at three inspectorates in the Netherlands, and 60 interviews with reporting business owners and representatives of business sector organizations and inspectorates.