Firm self-regulation through international certifiable standards: Determinants of symbolic versus substantive implementation

Abstract

International certifiable management standards that have been advocated as a governance mechanism for firm self-regulation of corporate social responsibility issues are effective only if certified firms comply with the requirements of the standards. Our empirical analysis shows that ISO-certified firms in China strategically select their level of compliance depending on customer preferences, customer monitoring, and expected sanctions by customers. Our findings have implications for the effectiveness of a global system of self-regulation based on certifiable standards, research on certifiable standards, and for practicing managers who require suppliers to obtain standard certifications. © 2006 Academy of International Business. All rights reserved.