How Companies Respond to New Safety Regulations: A Canadian Investigation

Article excerpt

INTRODUCTION

New occupational safety and health regulations are aimed primarily at improving conditions in workplaces with poor safety records. They might therefore be presumed to improve the performance of substandard companies more than that of initially safer companies. But does this happen? Since new regulations often translate into a need for organizational innovation in target companies, this question raises the more general issue of how companies assimilate externally induced innovation.

According to the model of innovation assimilation presented by Meyer and Goes (1988), the outcome of the assimilation process is determined by "innovation" attributes and "contextual" attributes operating both independently and interactively. In the case of a product or process innovation introduced of a company's own volition, for example, the main incentive to change is likely to be the prospect of higher profits, i.e. an innovation attribute. But safer working conditions are not normally expected to generate more business or reduce costs. Assimilation of an innovation in this field is therefore more likely to be determined by contextual attributes, such as a company's predisposition to change based on past experience and economic or organizational constraints.(1)

However, the most important determinant of a company's response to new safety regulations appears to be its existing safety culture. This can be defined as a combination of the importance the company attaches to safety, on the one hand, and its ability and willingness to take effective action, on the other. Indeed, because of the mandatory nature of compliance with statutory safety requirements-as opposed to the voluntary introduction of a directly profitable innovation-a company may be more or less responsive to new safety regulations. If its initial commitment to safety is strong, it will probably do its best to apply the new regulations conscientiously. But if its commitment is weak, the company will probably try to find short cuts.

This is confirmed by Marcus's study (1988a, b) on the introduction of nuclear safety regulations in the United States: incident rates declined more sharply in initially safer plants than in the less safe plants. In fact, plants that were originally found to have the worst safety records did not improve at all. It appears that better plants had enough self-confidence to work out a customized response to the new requirements, often going beyond the statutory minimum standards, while marginal plants complied with the new regulations mechanically, disregarding the relevance of specific rules to their own situation.

It follows that companies with a stronger safety culture are more likely to opt for an internally oriented assimilation strategy aimed at customized change, while those with a weaker safety culture tend to go for an externally oriented strategy involving minimum compliance. While the first category understands the rewards associated with implementation, the second is largely guided by the threat of penalties.

The innovation looked at in this study is the Workplace Hazardous Materials Information System (WHMIS) recently introduced in Canada. Under WHMIS regulations companies are required, inter alia, to establish a special information system on hazardous materials and to ensure that all their employees are given training in hazard prevention and control at the workplace.(2) The purpose of this article is to show how companies manufacturing transportation equipment and machinery in Quebec responded to the new requirements, and to examine possible explanations for the differences observed.

The three postulates under investigation are: (a) that companies with a strong safety culture and readiness for change prefer an internally organized training programme; (b) that companies with a weak safety culture and less readiness for change end up using outside experts to teach their employees; and (c) that business problems and/or anticipated major changes in production lead to incomplete compliance with regulations. …