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The purpose of this paper is to apply Chester Barnard's ideas about authority in organizations to the modern phenomenon of “whistle‐blowing” and highlight insights that can advance contemporary theory in business ethics. The paper coins a new term “the whistle‐blowing zone,” and uses it as a way to capitalize on Barnard's insights and to offer a conceptual framework that can help business ethics scholars explain the phenomenon.

By comparing and contrasting Barnard's ideas with contemporary research, the authors argue that he provides a number of insights that can advance modern business ethical theory and research. Implications about the origin and mechanism of whistle‐blowing are discussed.

First, it is found that Barnard's theory of authority, specifically the notion of a “zone of indifference” is applicable to the modern phenomenon of whistle‐blowing. Second, the paper coins a new term “the whistle‐blowing zone,” to explain why and how whistle‐blowing occurs. Finally, the paper develops a conceptual framework to capitalize on Barnard's insight to explain the phenomenon of “whistle‐blowing.”

This paper is the first paper to examine Barnard's writings in the context of the modern business issue of whistle‐blowing. It is believed that the study of business ethics can be enhanced by applying Barnard's work. His concept of authority in formal organizations actually provides the theoretical foundation to examine and understand the phenomenon of whistle‐blowing in ways that have not appeared in the literature to date.