Shifting from Soft to Hard Law: Motivating Compliance When Enacting Mandatory Corporate Social Responsibility

Abstract

A policy shift from soft law to hard law rests on assumptions about motivating compliance. The basic idea is that people comply with soft law for personal, moral reasons but are motivated to comply with hard law by self-interested fear. While logically this is obvious, there is also support for the view that self-determination, organisational justice and social influence are better at motivating compliance in certain contexts. Currently, there is a global policy shift moving corporate social responsibility (CSR) from a voluntary, organisation-based initiative to a practice mandated by law. This shift provides an opportunity to investigate the phenomenon of motivation in law. The current study investigates how the shift to mandatory CSR impacts motivation. Based on an analysis of the programs of 12 firms in Indonesia, we find that CSR hard law appears to motivate CSR without displacing voluntary moral initiatives.