Data were compiled from 410 nursing homes that were inspected between 1988 and 1990. The homes were drawn from four large metropolitan centers of the States of New South Wales, Queensland, South Australia, and Victoria. The director of nursing in each home was interviewed. Information solicited from the interviews provided data for estimating the expected utility model. There was partial confirmation that chief executives of small organizations who perceive the certainty of detection as high have better regulatory compliance in their organizations. Perceived sanction threats do not work significantly more effectively for chief executives of for-profit versus nonprofit organizations, who are owners as well as managers, who say they think about sanctions more (sanction salience), and who have a weaker belief in the law. Neither does the effectiveness of corporate deterrents depend on compliance costs. There is, however, a significant deterrent effect for managers who are low on emotionality, but an opposite counter-deterrent effect for actors high on emotionality. This supports the critique of those who condemn rational actor models from a sociology of the emotions perspective. Emotions of guilt among managers predict the subsequent compliance of their organizations. The results are consistent with perceptual deterrent studies of individuals that find little effect of formal sanctions and social disapproval as deterrents, but stronger support for an effect of self-disapproval (guilt or shame) on law observance. Qualitative data are used to show why it would be folly to interpret these results as showing that business regulation can work without sanction threats and social disapproval. Rather, the data show the need for a complete change in the way policy analysts think about the deterrence of law breaking. 3 tables, 2 figures, 23 notes, and 76 references