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Self‐regulation: a strategic alternative for small firms?

Self‐regulation: a strategic alternative for small firms? Purpose – Regulations and complying with regulation are a considerable burden on small firms, which consistently report that regulation is an obstacle to growth. Regulation for small business includes financial and psychological costs and worry about non‐compliance. Accordingly, regulation inflation raises increasing difficulties in understanding and complying with new regulation. Time and resources are diverted from running or growing the business. This paper explores self‐regulation as a mechanism for resolving the problems of regulation. Design/methodology/approach – The authors first sets out the “regulation problem” as seen by the research community and by small business. The analysis explores the issues associated with small business regulation and compliance. They show that “imposed” regulation is expensive and may not be very effective. They continue by examining the nature of self‐regulation and consider a case study: the auto trade. Findings – Self‐regulation can have beneficial effects. All regulation need not be top down control and command and self‐regulation can be effective if done well. Practical implications – Self‐regulation seems to offer a number of advantages over legislation for small businesses, but it appears that a number of conditions need to be met if they are to be seen as effective. The authors discuss the implications and benefits of SFROs as an alternative way of assuring regulatory compliance. Originality/value – Self‐regulation presents an attractive solution to some of the problems encountered by small business regulation through providing a credible, flexible and cost effective alternative to command and control legislation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business Strategy Emerald Publishing

Self‐regulation: a strategic alternative for small firms?

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References (12)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0275-6668
DOI
10.1108/02756661111150963
Publisher site
See Article on Publisher Site

Abstract

Purpose – Regulations and complying with regulation are a considerable burden on small firms, which consistently report that regulation is an obstacle to growth. Regulation for small business includes financial and psychological costs and worry about non‐compliance. Accordingly, regulation inflation raises increasing difficulties in understanding and complying with new regulation. Time and resources are diverted from running or growing the business. This paper explores self‐regulation as a mechanism for resolving the problems of regulation. Design/methodology/approach – The authors first sets out the “regulation problem” as seen by the research community and by small business. The analysis explores the issues associated with small business regulation and compliance. They show that “imposed” regulation is expensive and may not be very effective. They continue by examining the nature of self‐regulation and consider a case study: the auto trade. Findings – Self‐regulation can have beneficial effects. All regulation need not be top down control and command and self‐regulation can be effective if done well. Practical implications – Self‐regulation seems to offer a number of advantages over legislation for small businesses, but it appears that a number of conditions need to be met if they are to be seen as effective. The authors discuss the implications and benefits of SFROs as an alternative way of assuring regulatory compliance. Originality/value – Self‐regulation presents an attractive solution to some of the problems encountered by small business regulation through providing a credible, flexible and cost effective alternative to command and control legislation.

Journal

Journal of Business Strategy – Emerald Publishing

Published: Jul 5, 2011

Keywords: Small enterprises; Regulation; Regulatory burden; Self regulation

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