Hedging: Organizational Responses to the Formulation, Implementation, and Enforcement of Government Mandated Changes

This chapter develops a process model of the hedging behavior of organizations in response to government mandates. To better align the behavior of organizations with the interests of society, governments make many demands on organizations to change their behavior. However, the changes governments require generally do not correspond to the changes organizations want to make, or those that they actually end up making. The process model describes how the variety of external requirements imposed on organizations by government leads to hedging behavior—that is a tendency to simultaneously take actions that align with the regulation while simultaneously taking actions to resist the regulation.