IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v178y2022i3d10.1007_s10551-021-04751-1.html
   My bibliography  Save this article

Law Lost, Compliance Found: A Frontline Understanding of the Non-linear Nature of Business and Employee Responses to Law

Author

Listed:
  • Na Li

    (Yunnan University)

  • Benjamin Rooij

    (University of Amsterdam)

Abstract

This paper seeks to understand the transmission and reception of legal rules as a component of the regulatory compliance process. It adopts a frontline approach (Almond and Gray 2017) to regulatory compliance that traces the grassroot functioning of compliance processes from regulator, to compliance managers to individual employees. Through a multilevel and multi-sited ethnography of worker safety protection in Chinese construction industry, this paper shows that in the cases studied there is a fundamental disconnect in the transmission and reception of law from regulator to organization and within the regulated organization. Yet at the same time, the paper finds that employees did comply with the law, and that thus compliance can exist without a full transmission and reception of legal rules into and within the regulated organization. By expanding the frontline approach to study regulation and compliance to look at the grassroots operation across three different frontlines, this study has been able to assess the legal assumptions inherent in existing regulatory compliance research. Not only does it find that compliance in these cases was not a top-down process and that we need to look at the grassroots operation inside organizations, it also shows that law does not always play a central role in regulatory compliance and that we need to reassess the implicit focus on law in regulatory compliance scholarship.

Suggested Citation

  • Na Li & Benjamin Rooij, 2022. "Law Lost, Compliance Found: A Frontline Understanding of the Non-linear Nature of Business and Employee Responses to Law," Journal of Business Ethics, Springer, vol. 178(3), pages 715-734, July.
    • Handle: RePEc:kap:jbuset:v:178:y:2022:i:3:d:10.1007_s10551-021-04751-1
    DOI: 10.1007/s10551-021-04751-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-021-04751-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-021-04751-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Huiqi Yan & Jeroen van der Heijden & Benjamin van Rooij, 2017. "Symmetric and asymmetric motivations for compliance and violation: A crisp set qualitative comparative analysis of Chinese farmers," Regulation & Governance, John Wiley & Sons, vol. 11(1), pages 64-80, March.
    3. Gallagher,Mary E., 2017. "Authoritarian Legality in China," Cambridge Books, Cambridge University Press, number 9781107444485.
    4. Vibeke Lehmann Nielsen & Christine Parker, 2009. "Testing responsive regulation in regulatory enforcement," Regulation & Governance, John Wiley & Sons, vol. 3(4), pages 376-399, December.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. Tom R. Tyler, 1997. "Procedural Fairness and Compliance with the Law," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(II), pages 219-240, June.
    7. Parker,Christine, 2002. "The Open Corporation," Cambridge Books, Cambridge University Press, number 9780521818902.
    8. Gallagher,Mary E., 2017. "Authoritarian Legality in China," Cambridge Books, Cambridge University Press, number 9781107083776.
    9. Marie A. McKendall & John A. Wagner, 1997. "Motive, Opportunity, Choice, and Corporate Illegality," Organization Science, INFORMS, vol. 8(6), pages 624-647, December.
    10. Peter Mascini & Eelco Van Wijk, 2009. "Responsive regulation at the Dutch Food and Consumer Product Safety Authority: An empirical assessment of assumptions underlying the theory," Regulation & Governance, John Wiley & Sons, vol. 3(1), pages 27-47, March.
    11. Fiona Haines, 2011. "Addressing the risk, reading the landscape: The role of agency in regulation," Regulation & Governance, John Wiley & Sons, vol. 5(1), pages 118-144, March.
    12. Joseph Henrich & Steven J. Heine & Ara Norenzayan, 2010. "Most people are not WEIRD," Nature, Nature, vol. 466(7302), pages 29-29, July.
    13. Muel Kaptein, 2011. "Toward Effective Codes: Testing the Relationship with Unethical Behavior," Journal of Business Ethics, Springer, vol. 99(2), pages 233-251, March.
    14. Robert Cialdini, 2007. "Descriptive Social Norms as Underappreciated Sources of Social Control," Psychometrika, Springer;The Psychometric Society, vol. 72(2), pages 263-268, June.
    15. Benjamin van Rooij & Rachel E. Stern & Kathinka Fürst, 2016. "The authoritarian logic of regulatory pluralism: Understanding China's new environmental actors," Regulation & Governance, John Wiley & Sons, vol. 10(1), pages 3-13, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Semjén, András, 2017. "Az adózói magatartás különféle magyarázatai [Various explanations for tax compliance]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 140-184.
    2. Justina A.V. Fischer, 2005. "The Impact of Direct Democracy on Crime: Is the Median Voter Boundedly Rational?," University of St. Gallen Department of Economics working paper series 2005 2005-14, Department of Economics, University of St. Gallen.
    3. Mulder, Laetitia B. & Rink, Floor & Jordan, Jennifer, 2020. "Constraining temptation: How specific and general rules mitigate the effect of personal gain on unethical behavior," Journal of Economic Psychology, Elsevier, vol. 76(C).
    4. Yunmei Wu & Benjamin Rooij, 2021. "Compliance Dynamism: Capturing the Polynormative and Situational Nature of Business Responses to Law," Journal of Business Ethics, Springer, vol. 168(3), pages 579-591, January.
    5. Kerri Brick & Martine Visser & Justine Burns, 2012. "Risk Aversion: Experimental Evidence from South African Fishing Communities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 133-152.
    6. Siddiqi, Hammad, 2015. "Anchoring and Adjustment Heuristic: A Unified Explanation for Equity Puzzles," MPRA Paper 68729, University Library of Munich, Germany.
    7. Mattos, Enlinson & Rocha, Fabiana & Toporcov, Patricia, 2013. "Programas de incentivos fiscais são eficazes? Evidência a partir da avaliação do impacto do programa nota fiscal paulista sobre a arrecadação de ICMS," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 67(1), April.
    8. Raj Chetty, 2004. "Consumption Commitments, Unemployment Durations, and Local Risk Aversion," NBER Working Papers 10211, National Bureau of Economic Research, Inc.
    9. Tomas Bonavia & Josué Brox-Ponce, 2018. "Shame in decision making under risk conditions: Understanding the effect of transparency," PLOS ONE, Public Library of Science, vol. 13(2), pages 1-16, February.
    10. Gerd Gigerenzer, 1997. "Bounded Rationality: Models of Fast and Frugal Inference," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(II), pages 201-218, June.
    11. Matthias Kasper & James Alm, 2022. "Does the Bomb-crater Effect Really Exist? Evidence from the Laboratory," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 78(1-2), pages 87-111.
    12. Marie Claire Villeval, 2019. "Comportements (non) éthiques et stratégies morales," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 1021-1046.
    13. Yang, Bijou & Lester, David, 1995. "New directions for economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 24(3), pages 433-446.
    14. repec:fgv:epgrbe:v:67:n:1:a:5 is not listed on IDEAS
    15. Luis Sarmiento, 2020. "I Am Innocent: Hourly Variations in Air Pollution and Crime Behavior," Discussion Papers of DIW Berlin 1879, DIW Berlin, German Institute for Economic Research.
    16. Jacquemet, Nicolas & Rullière, Jean-Louis & Vialle, Isabelle, 2008. "Monitoring optimistic agents," Journal of Economic Psychology, Elsevier, vol. 29(5), pages 698-714, November.
    17. He, Haoran & Wu, Keyu, 2016. "Choice set, relative income, and inequity aversion: An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 177-193.
    18. Schleich, Joachim & Gassmann, Xavier & Faure, Corinne & Meissner, Thomas, 2016. "Making the implicit explicit: A look inside the implicit discount rate," Energy Policy, Elsevier, vol. 97(C), pages 321-331.
    19. Dickinson, David L. & Masclet, David & Villeval, Marie Claire, 2015. "Norm enforcement in social dilemmas: An experiment with police commissioners," Journal of Public Economics, Elsevier, vol. 126(C), pages 74-85.
    20. Carrillo, Paul & Emran, M. Shahe, 2018. "Loss Aversion, Transaction Costs, or Audit Trigger? Learning about Corporate Tax Compliance from a Policy Experiment with Withholding Regime," MPRA Paper 87445, University Library of Munich, Germany.
    21. Dacey, Raymond & Gallant, Kenneth S., 1997. "Crime control and harassment of the innocent," Journal of Criminal Justice, Elsevier, vol. 25(4), pages 325-334.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:178:y:2022:i:3:d:10.1007_s10551-021-04751-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.