UNDERSTANDING SMALL FIRM RESPONSES TO REGULATION:

This article aims to contribute to our understanding of the varied responses of small and micro enterprises to regulation and their implications for regulatory policy, using statutory occupational health and safety requirements as an example. Particular emphasis is given to the relevance of an understanding of business responses to regulation that is informed by a wider range of evidence and perspectives than that which has tended to dominate recent policy developments around regulation. Evidence is presented on small firms’ awareness of, and attitudes towards, the health and safety legislation and their responses to the enforcement activities of health and safety inspectors. A framework for understanding owner-manager attitudes and organisational stances towards health and safety regulation and enforcement is advanced which emphasises their varying characteristics and motivational bases, including a regard for the different contexts in which firms operate. The framework supports the view that most small firms have a reactive stance towards regulation, but also that attitudes and motivations can range from overt avoidance to more positive and even proactive stances. This understanding points to the need for a multidimensional approach towards encouraging compliance that accords a central role to direct contact and enforcement in stimulating improvement in practices. The perspective developed is related to the debate around the role of regulation in general in shaping the performance and development of enterprises, particularly with respect to the potential wider economic role that can be played by well-implemented regulation and associated mechanisms of support.

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