Examining firm self-regulation in the automobile industry: the role of situational factors, firm characteristics and association influence

Abstract

PurposeThe current study seeks to contribute to current self-regulation research by first exploring the association between the cost of self-regulation and firm self-regulation. The mediating role of association membership and firm slack is additionally explored.Design/methodology/approachLongitudinal analysis of firm-initiated product recalls for 15 manufacturers in the USA automobile industry from 1966 to 2012 has several important findings regarding the motivations for firm self-regulation.FindingsThe influence of industry associations and firm absorbed slack both contribute to firm self-regulation.Originality/valueThe current study begins to address the importance of firm characteristics in predicting self-regulation activities. The bulk of existing research has examined self-regulation at the industry level as an activity performed as a result of the adoption of formalized industry sanctioned standards of practice. This research contributes to such work by examining firm proactivity in the absence of such formal standards.