When social norms and pressures are not enough

Abstract

Why do some business firms and not others work hard to advance regulatory values such as environmental protection and comply with regulations? Previous research indicates that business firms are influenced in that regard by a number of variables - not merely the perceived likelihood of legal punishment but also the risk of negative reactions by societal actors (which we call "social license pressures") and the intensity of managers' commitment to norms of law-abidingness and environmentalism. This article reports on a study of control of diesel emissions in the trucking industry, a highly competitive market with many small firms, mobile pollution sources, expensive "best control technologies," and weak regulatory demands. In contrast to findings in studies of large firms, we found that social license pressures on small trucking firms are minimal. Trucking companies' environmental performance - good and bad - flows from managers' economic choices, which are influenced by their particular market niche. In such highly competitive, small-firm market contexts, these findings imply, significant improvement in environmental performance is not likely without strong direct regulatory pressures. Show more