eThesis - Kauppakorkeakoulun sähköiset gradut

ABSTRACT RESEARCH OBJECTIVES The main purpose of this thesis is to reveal new perspectives to organizational regulatory compliance and to assess the challenges global organizations face in trying to comply with rigid extraterritorial regulations. The research is a case study of a Canadian company, CAE Inc., operating within strict regulatory environment in global aerospace and defence industry. The study reveals headquarter and subsidiary views and contradictions, discovers the current compliance practices, evaluates the importance of compliance and suggests alternative approaches to achieve it. DATA AND METHODOLOGY The empirical data for this qualitative study was gathered mainly from eight semi-structured and thematic interviews consisting three corporate and five subsidiary individuals who represented six countries in three different geographical continents. Additionally, publicly available information of the case company, media and government reports, and the case company’s official internal policies and procedures were other sources of information within the study. The Management Control Systems (MCS) and Total Quality Management (TQM) were used as theoretical frameworks for the research. RESULTS The study reveals that the compliance is best achieved when it is so well integrated to the processes throughout the organization that it becomes invisible for the end-customer. The leadership style and the use of formal and informal control systems are important contributors to the individuals’ expectations, general perceptions and attitudes towards compliance. Since the regulation involves employees at all levels of the company, the research suggests that empowerment is the way to reach compliancy. It is also important to have continuous improvement initiatives and feedback loop in place to ensure that the statistical data gathered from the processes are used proactively to improve organizational compliance processes. Theoretical contribution of this thesis consists of using a novel and experimental application of TQM framework within organizational regulatory compliance context. TQM and MCS revealed behavioural implications of compliance by concentrating on the company-wide empowerment of employees. They also enabled to discover multiple challenges at different vertical and horizontal levels of the organization. Keywords Regulatory compliance, Total Quality Management, empowerment