A Theoretical and Empirical Analysis of the Strategic Value of beyond Compliance Occupational Health and Safety Programs

By Corcoran, Daniel J.; Shackman, Joshua D. | Journal of Business Strategies, Spring 2007 | Go to article overview

A Theoretical and Empirical Analysis of the Strategic Value of beyond Compliance Occupational Health and Safety Programs


Corcoran, Daniel J., Shackman, Joshua D., Journal of Business Strategies


Abstract

The present study examines the application of Resource Dependence Theory and Institutional Theory relative to company involvement in an important voluntary, governmentally sanctioned employee safety program that goes by the acronym VPP Utilizing this combined theory approach, the study empirically demonstrates, through a design incorporating correlation and multiple regression analysis, that Institutional Theory is useful for predicting program prevalence within a given industry, though Resource Dependence Theory complements the former by offering an accounting of strategic firm behavior. Companies consider adoption of beyond compliance safety programs as a strategy to manage the expression of resource control power on the part of powerful stakeholders, while Institutional Theory helps to explain the mechanisms by which such programs proliferate through a given institutional field.

Introduction

The present study explores the efficacy of Resource Dependence Theory (RDT) and Institutional Theory (IT) as a theoretical foundation for understanding why organizations participate in beyond compliance safety and health programs. These two theories have frequently been used in concert in various attempts to explain organizational phenomena (Lucas, Avi-Itzhak, Robinson & Morris, 2005; Peng, 2004) due, in part, to the shortcomings in each of the two perspectives that the other is capable of satisfying. Institutional theory, for instance, has been criticized in the past for focusing primarily on organizational adaptations resulting from institutional pressures including social values, norms and expectations imposed by the external environment without a great deal of consideration given to the influence of active agency and external exchange relationships that play a part in driving organizational change (Oliver, 1991; Pfeffer & Salancik, 1978; Abernethy & Fong, 1996). RDT, on the other hand, complements Institutional Theory in that active agency is essentially a fundamental tenet of the theory which also focuses specifically on exchange relationships with the external environment as they relate to resource inter dependence between the firm and various stakeholder groups (Oliver, 1991; Pfeffer & Salancik, 1978).

The present paper considers the marriage of these two theoretical perspectives as they relate to the emergence and growth of beyond compliance safety and health (S&H) programs within institutional fields. The focal program evaluated in this study provides governmental recognition to employers for exemplary performance in their safety and health endeavors. This program, known as OSHA's Voluntary Protection Program (VPP) was created by the Occupational Safety and Health Administration (OSHA) in the early 80s and requires that employers go well beyond what is minimally expected of them by OSHA standards (OSHA, n.d. (a)). Participants, for instance, are required to implement sophisticated health and safety management programs similar to those found in management systems prescribed to enhance product quality such as ISO quality standards, Six-Sigma, and Malcolm Baldridge Award criteria (Levine & Dyjacka, 1997; Manuele, 2003). The intent behind VPP, therefore, is to provide recognition to employers that successfully protect their employees from workplace injuries and illnesses through the utilization of sophisticated management systems.

Thus, consideration for the employee stakeholder group weighs heavy in the decision to participate in VPP. However, participation also impacts the perception of the firm by other stakeholders having power to control resources important for firm survival. These include not only employees, but also the government, local community, customers, suppliers and other important stakeholder groups as well. Likewise, VPP has become a recognized, legitimate socially responsible endeavor and has proliferated within a number of industries. …

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A Theoretical and Empirical Analysis of the Strategic Value of beyond Compliance Occupational Health and Safety Programs
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