ABSTRACT
This chapter highlights some of the potentials and pitfalls of regulation and self-regulation in relation to corporate social responsibility. It focuses on the command-and-control approach in addition to an incentive approach. Economic regulation is basically ‘the pattern of government intervention in the market’. The attacks on traditional regulation and incentive schemes have generated a number of alternative trends with regard to social and environmental issues. The idea behind self-regulation is to encourage firms to voluntarily adopt policies that contribute positively to society and the environment and promote continuous improvement. The regulation of particular industries might depend on their social and environmental impacts as well as the industry’s relative importance for a particular national economy. Coercive isomorphism stems from formal and informal pressures imposed by the company’s stakeholders and cultural expectations in society. The tendency towards normative isomorphism is stimulated when people are recruited from the same educational institutions and professional networks.
