Regulation compliance in small Finnish companies

Abstract

Purpose

The purpose of this paper is to learn more about how regulation affects small business in the Finnish context. The authors create a framework for understanding owner-managers’ attitudes towards business legislation. It is authors’ understanding that not enough is known about how small firms make strategic choices that drive business in a highly regulated environment.

Design/methodology/approach

This paper contributes to the existing knowledge of entrepreneurship and small business management. The empirical data used to test the hypotheses were drawn from the postal survey. Differences between owner-managers’ attitudes towards business regulation were identified with factor and cluster analyses methods.

Findings

Regulation often exerts only a limited influence over owner-managers’ decision-making. Family entrepreneurs are more compliant towards business regulation. Regulation is not too heavy a burden to all in business in Finland, even though Finland is a highly regulated country.

Research limitations/implications

The real impact of regulation on small firms’ performance is really difficult to prove, because small firms operating in the same regulatory context have different performance outcomes. Additionally, often owner-managers’ awareness of specific regulations is limited.

Practical implications

There could be gap between the presumed effect of policymakers and the real effect of regulation among owner-managers. In Finland, policymakers should find other motivations to encourage business than lightening the regulatory burden. They should concentrate more providing external support to small firms in the form of information, training and financing new small firms.

Originality/value

It is authors’ understanding that not enough is known about how small firms make strategic choices that drive business in a highly regulated environment.

Citation

Sjögrén, H. and Syrjä, P. (2015), "Regulation compliance in small Finnish companies", International Journal of Law and Management, Vol. 57 No. 6, pp. 649-661. https://doi.org/10.1108/IJLMA-03-2015-0010