Strategic approaches to corporate wrongdoing prevention: An explorative analysis of whistleblowing arrangements in Italy

Objectives. The issue of corporate wrongdoing is of great relevance because it deals with corporate behaviours that are harmful to the community as shown by cases such as Enron and Worldcom. Literature is paying increasing attention to the areas of company social irresponsibility underlying scandals that threaten the survival of the companies in which they occur (Mocciaro Li Destri, 2013). Furthermore, studies are now available on the dynamics through which top managers evaluate situations and make risky or opportunistic decisions also on the basis of personal characteristics such as hubris, that is an excess of self-confidence mixed with an excess of pride (Dagnino et al., 2014). Corporate wrongdoing has long been considered an abnormal, rare phenomenon, without any doubt wrong and executed by questionable people. New research streams instead consider it a normal phenomenon, very widespread, not too different from correct practices, executed by people irreproachable from a social, ethical and legal point of view, a function of a set of structures, processes and mechanisms that are an integral part of the correct organizational operations (Palmer, 2013; Anand et al., 2004; Ashford and Anand, 2003). Some studies even deal with the topic of the institutionalization of illegality (Gabbioneta et al., 2013). Given the seriousness of the damage caused by corporate wrongdoing both for society and for the company in which it occurs, it is desirable to implement a series of strategies aimed at preventing and intercepting it as soon as it surfaces. In several cases, only insiders can detect organizational wrongdoing: employees who witness questionable actions and take the courage to blow the whistle to voice their concerns. This is showed by several cases also in Italy. For example the Trenord case and the reporting made by one of its employees (Franzoso, 2018); or the recent case of employees at health care residences in Italy that reported the lack of actions taken to prevent the Covid-19 diffusion When insiders report wrongdoing to people that can solve the problem, this brings clear benefits to the society at large. Also the organization obtains benefits in terms of wrongdoing and crisis prevention, and interruption of malpractices. However, the whistleblower often suffers from retaliation, demotion, career damages. The objective of this study is to explore possible strategies that a company can adopt to fight corporate wrongdoing. In particular this study argues for a strategic approach based on managerial and organizational practices aimed at encouraging insiders to voice their concerns, instead of a statutory approach relying on mere compliance with legal requirements.