The Norwegian Transparency Act: Motivation of Stakeholders in The Automobile Retail Industry

Abstract

Research Question: How do the motivations of key stakeholders influence the implementation and the reporting of the Transparency Act in organizations?

Purpose: This paper aims to explore the motivation of key stakeholders – suppliers, employees, and government – to implement the Transparency Act and conduct due diligence reporting. Previous research on similar legislation has indicated that enterprises tend to approach due diligence reporting more symbolically, often resulting in reports lacking in substance. A sample test by the Norwegian Consumer Authority revealed that one in five businesses failed to provide their required statements under the Transparency Act. Therefore, the purpose of this study is therefore to gain a deeper understanding of the motivation behind enterprises’ due diligence reporting.

Design/methodology/approach: Qualitative research with a case study approach using semi-structured interviews. To complement the qualitative data, we reviewed 257 previously published reports to leverage the strengths of both qualitative and quantitative methodologies.

Findings: The study found that while most companies comply with the Transparency Act in terms of reporting, the quality and depth of these reports vary significantly. Out of 118 companies required to report, we found reports from 88. Most reports indicated no negative findings, while a small percentage highlighted areas for improvement, such as enhancing supplier responsiveness and implementing more strict due diligence tasks. The motivations for compliance ranged from legal obligations and moral responsibility to external pressures from customers and government regulations.

Research limitations/implications: Methodologically: potential researcher bias, a small sample size affecting generalizability, and translation inaccuracies from Norwegian to English. Theoretically: the newness of the TA limits available research, though we reference similar laws. Practically: 25% of the secondary data lacked required reports, and many were low quality. One case was withdrawn, but its absence doesn't significantly impact validity due to the remaining sufficient cases.