Tuesday, 3 November 2015

Industry self-regulation

 

From Wikipedia, the free encyclopedia/Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics
 
        
Industry self-regulation is the process whereby an organization monitors its own adherence to legal, ethical, or safety standards, rather than have an outside, independent agency such as a third party entity monitor and enforce those standards.[1] Self-regulation of any group can be a conflict of interest. If any organization, such as a corporation or government bureaucracy, is asked to eliminate unethical behavior within their own group, it may be in their interest in the short run to eliminate the appearance of unethical behavior, rather than the behavior itself, by keeping any ethical breaches hidden, instead of exposing and correcting them. An exception occurs when the ethical breach is already known by the public. In that case, it could be in the group's interest to end the ethical problem to which the public has knowledge, but keep remaining breaches hidden.[citation needed]




Advantages and disadvantages[edit]

An organization can maintain control over the standards to which they are held by successfully self-regulating. If they can keep the public from becoming aware of their internal problems, this also serves in place of a public relations campaign to repair such damage. The cost of setting up an external enforcement mechanism is avoided.
Self-regulating attempts may well fail, due to the inherent conflict of interest in asking any organization to police itself. If the public becomes aware of this failure, an external, independent organization is often given the duty of policing them, sometimes with highly punitive measures taken against the organization. The results can be disastrous, such as a military with no external, independent oversight, which may commit human rights violations against the public. Not all businesses will voluntarily meet best practice standards, leaving some users exposed.

Self-regulatory organizations[edit]

When directly self-regulating, the organization directly monitors and punishes its own members. For example, many small organizations have the ability to remove any member by a vote of all members. Another common form is where the organization establishes an external policing organization. This organization is established, and controlled by, the parent organization, so cannot be considered independent, however. In another form, the organization sets up a committee or division for policing the remainder of the organization. The House Ethics Committee is an example in the United States government, while various police departments employ an Internal Affairs division to perform a similar function.

See also[edit]

Notes[edit]

  1. Jump up ^ Self-regulation dictionary definition, yourdictionary.com, retrieved October 2, 2015 

External links[edit]

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