Whistleblowing at Social Mission Organizations : The Impact of Value Congruence on the Likelihood of Employees to Report Fraud

Whistleblowing plays a critical role in detecting fraud in organizations. In this study, we examine the effect of value congruence on employees’ intentions to report fraudulent acts at social mission organizations (SMOs). We deploy a vignette research design to investigate the whistleblowing intentions of SMO employees for two types of frauds: assets misappropriation and fraudulent financial reporting. We find that more value congruent employees have greater intentions to report both fraudulent acts than less value congruent employees. We also find that employees’ loyalty to the organization’s mission (i.e., rational loyalty) mediates the relationship between their value congruence and reporting intentions. Our findings extend the whistleblowing literature by documenting employees’ value congruence as a contributing factor of whistleblowing decisions in the context of SMOs and providing empirical evidence supporting rational loyalty theory. We also extend the SMO literature by identifying an incremental benefit of hiring more value congruent employees