Enforced Self‐Regulation, Prescription, and Conceptions of Compliance within Small Businesses: The Impact of Enforcement*

Enforced self‐regulation is increasingly used to control risks created by businesses. This paper examines the way that small and medium‐sized enterprises (SMEs) make compliance decisions when faced with self‐regulatory and prescriptive law, drawing upon empirical research undertaken within food‐industry SMEs. It evaluates the impact of enforcement approaches on compliance decisions and compliance levels. It finds that within food‐industry SMEs in the United Kingdom, compliance is conceptualized as the negotiated outcome of the regulatory encounter. This leads to heavily reactive decision making, in which the enforcer becomes the predominant driver, which poses huge challenges for the successful implementation of enforced self‐regulation, and is an explanation for the lack of empirical evidence supporting deterrence theory in business compliance.