The Nature of Regulatory Compliance

1
The Nature of Regulatory Compliance

• An Analysis of the Responses of Business
  Organisations to Constitutive Regulation of
  Working Relationships Preliminary Findings

2
Constitutive Regulation

• A form of regulatory law that uses legal norms to
  constitute structures, procedures and routines
  which are required to be adopted and internalised
  by regulated organisations, so that these
  structures, procedures and routines become part
  of the normal operating activities of the
  organisation.

3
Research Questions

• What steps do business organisations take to
  comply with the legal obligations?
• What difficulties did they experience?
• Can corporate cultures impacting upon compliance
  be identified?
• What factors influence corporate culture?

4
Methodology

• Face to face interviews with owner/manager and
  employer associations/unions/regulatory agencies.
• 4 industries construction, manufacturing,
  hospitality health
• 2 states Queensland Victoria
• Metropolitan regional areas
• Sizes micro 1-4, small 5-19, medium 20-99, large
  100

5
Preliminary Findings

• Some general themes
• Legal obligations as a priority
• Types of corporate culture
• Factors which impact on corporate culture

6
Some general themes

• Awareness
• Understanding
• Competition
• Contractual requirements

7
it is getting horrendous trying to keep up
with the reading of everything youre supposed to
read to implement things and honestly, theres be
two thirds of what were supposed to have
implemented and we dont, because we just dont
have time, we dont understand it.
(Manufacturing, med)
8
Some general themes

• Awareness
• Understanding
• Competition
• Contractual requirements

9
the construction industry is getting tighter
and tighter all the time because construction
timeframes are getting shorter and shorter. It is
hard work being in the building game, bloddy
hard. You know, the money used to be there years
ago (Construction, large)
10
The margin that you take out of a restaurant is
very minimal (Hospitality, med)
11
you are constantly grappling with how you
maintain quality care, not blow your budget out
the beds are full but we cant make money because
theres no margin in it.(Health, large)
12
Legal obligations as a priority

• Construction
• EEO/SH/UD/OHS
• Health
• EEO/SH/UD/OHS
• Hospitality Manufacturing

13
at the end of the day, there is a bloke on the
ground, working for 20 an hour and they call him
an independent contractor and a captain of
industry with the ute and the dog and he is given
all the risk.(Employer Association)
14
nothing is permanent, this could be our last
job. Thats why the industry doesnt train. When
a job comes to an end, everybody gets sacked and
normally there is not a lot of fuss.(Employer
Association)
15
They have no concept that they could be
responsible because they dont think it is fair
and if they dont think it is fair, they wont
comply it is as simple as that.(Employer
Association)
16
Types of corporate culture

• Haines (1997124)
• Virtuous
• Conformity goals accepted has the means.
• Innovation goals accepted uses other means.
• Blinkered
• Ritualism goals means reluctantly
  perfunctorily
• Retreatism no engagement with goals or means
• Rebellion goals means rejected.
• (Braithwaite, 1993, building on Merton, 1968)

17
Factors which impact on corporate culture

• Industry?
• Size?
• Place in contractual hierarchy?
• Senior management ethos?

18
So when I say our culture, Im talking from the
very top. Im talking from the CEO down, whos
put his hand on his heart and his opening comment
is, he said that Every person who comes on our
job is somebodys mother, father, child, niece or
nephew. Are you going to put your hand up in
court and say, I did everything I did to make my
workplace safe?
19
if we find its best practice and thats going
to make things safer, we take it up. We wont
wait for legal things to come through and say if
its best if its better, well well just take
it on board, but we wont for legal
implications.(Health, med)
20
Institutionalisation of compliance

• Parker (2002) suggests organisations go through
  three stages
• 1. Management commitment to comply
• 2. Learning how to comply
• 3. Ongoing institutionalisation of compliance
• This model is dynamic, and stages or phases are
  not unilinear.

21
Conclusions

• Complex, ongoing process.
• Behaviour influenced by size, industry and
  corporate culture.
• Low level of awareness and understanding.
• Different corporate cultures.
• Senior management ethos.
• Can less virtuous cultures be nurtured?