Law

Name

Institution

 

 

Law

Need for the legal environment

The legal environment is a vital aspect of a business. The legal environment of a business, through its definition, reflects the various essential factors that make up the business environment. These are the crucial aspects of a business. It looks into the business-government relationship and interaction. For example, the government, through its various agencies and departments, formulates laws and policies that govern and dictate the numerous processes that comprise the highly competitive and complicated business environment. It is complicated because the environment brings together a myriad of factors that are interrelated and that are influential on critical aspects of business, such as decision making. For example, the favorable policy presents firms and other businesses with a positive space for development and growth – decision making by the relevant stakeholders is bound to reflect this state of the environment. Firms may be more willing to increase investment options through expansion and other appropriate methods. On the other hand, a poor business environment is bound to create a constrained potential for progress. Firms are more likely to drop out of the market, move to more favorable areas, and take other measures that would safeguard their operational integrity (Kubasek et al., 2012).

The legal landscape relating to business is extensive. Businesses consist of many elements that range from financing, business structure, contracts, consumer interaction, human resource handling, and other critical factors. For every consideration, there exists some degree of legal influence. For example, securities law affects the aspects of financing and investment; contract law handles other factors such as agreement institution, and a final example, organizational law, that impacts a business depending on the structuring of business operations and type of entity. These laws and regulatory measures enhance the activities of a company by playing various critical roles, which include protection and guidance for stakeholders – these include the businesses themselves as well as external players such as the government and consumers.

Problem Definition: Impact of the legal environment on firms and multinationals

In defining the problem and challenge, it is vital to understand the various dimensions of businesses. For instance, different companies deal with various goods and or services. They play roles in different industries. It is vital to understand that these differences in the operational approach also affect the influence of law and other legal factors on individual businesses. One form of this differentiation is reflected by the fact that, for instance, there exists industry-specific regulation. The other factor that crops up is that of the scale of operation. Some businesses are confined to handling a small geographical area while others have the operational capacities to manage and cover larger and broader geographic areas, for example, multinationals. Understanding the input that is reflected by these legal controls enhances the appreciation for various elements of the legal environment. The various dimensions of business mean that business players must align themselves with the stipulated laws for smooth operations. Failure to adhere to these regulations often leads to the crippling of business operations – and vital operational advantages such as the internationalization of production and capital mobility (Newell & Roberts, 2017).

In this analysis and report, the primary attention is given to businesses that operate on a global scale – multinationals. In this analysis, the aspects of law, ethics, and legal process as pertains to the resolution of disputes, both civil and criminal, are addressed. These are businesses that are influenced by more different legal environments depending on the different countries of operation. The element of the various relationships between firms and other stakeholders, such as the government, the labor market, and consumers, are evaluated. For a business, challenges and hiccups in operation are regular occurrences. The business environment is usually unpredictable, and this leads to numerous problems. For example, aspects such as production and distribution can be gravely affected by a sudden and unprecedented change in regulation. These extra-business influences are critical as they are often impactful to business relationships and perception, operations, and other vital factors such as decision making.

Case Analysis: Legal challenges for firms and multinationals and Dispute resolution

The operational challenges that these firms face include, but are not limited to, differentiated approaches by different governments. The situation makes it difficult for these firms to implement uniform strategies across their operational areas. Some of the challenges include managing different markets as different consumer markets demand different regulations and approaches. The various legal issues in multinational that face multinationals include, mainly, compliance issues. It is a challenge to effectively comply with varying levels of legislation and regulation, which could be different depending on the region of operation. The problem of compliance with both host and home regulations has various dimensions, which range from, tax and social security financial issues, social responsibility, work permits, and immigration, and finally, the fundamental employment law (Perego & Kolk, 2012).

Global mobility is a vital need for firms that have operations on this scale. For instance, numerous countries have specific laws that govern employment and that are designed to provide sufficient employee protection under various stipulated labor laws. Violations of such laws are bound to be problematic for a business. The global variables that affect a business can affect various elements of a business, such as dispute resolution. Dispute resolution is a vital aspect of the legal environment. Understanding the various dimensions of law is essential. For example, there exists civil law that governs litigation between two private parties. Also, there exists public law that regulates the relationship of the government with individual citizens. Finally, there is the private law that has specific dealing with the enforcement of private duties (Kubasek et al., 2012).

Dispute resolution

Dispute resolution is a vital element of the legal environment of business. Some numerous factors and situations would lead to conflict and, consequently, the need for litigation. First, an overview of the various types of disputes is vital as this will lay a foundation for presenting a secure link for the need and importance of the legal environment. First, one of the leading dispute types is the partnership dispute. These could arise from various elements such as a partner’s need to exit a partnership, decision clashes, and more. Secondly, shareholder disputes are another critical but common dispute scenario. Shareholders invest in a business. They, therefore, need the business to run effectively to safeguard their investments and to ensure that sufficient profit is earned. One instance where shareholder disputes might arise is when the management of business makes mistakes in management. Shareholders might get worried about the potential of negative impacts on their investments and, as a result, may seek to address the issues by taking action before losses are suffered.

For a business, the relevant stakeholders must ensure that regulations are adhered to, which reduces risk. Employment disputes are common for companies. Most employees work in ‘at will’ states – they can lose their jobs and get fired at any time and for any reason. Sometimes, employees may claim that they were terminated based on wrong or even illegal reasons, for example, various forms of discrimination. Also, another element that may arise in this case is the case of employees suing over contractual violations, unsafe working conditions, and the withholding of benefits. In the lines of contractual breaches, another major issue is the breach of contract. Contracts cover just about all aspects of a business. These include supplier and vendor relationships, acquisitions and mergers, employment, agreements by shareholders, franchise agreements, and other vital elements. Customer disputes are another crucial scenario. These could vary from cases of mistreatment, defective goods, or even false claims.

Alternative dispute resolution Methods

It is critical to understand fully the impact of business litigation on various stakeholders who include the economy, business, and society. Litigation is usually a complicated process. It involves the utilization of substantial resources in averting liability. Lawsuits are typically public records, and this is bound to present public relations issues in the future for firms – this has a strong negative impact on the business front. The effect this has on vital business operations is grave. For example, in some cases, it has led to the discontinuation of various products. Also, it leads to a failure of liability, which often leads to the limitation of product variety release by firms. Another vital element that is reflected in this issue is productivity and employment. Lower risks for liability are related to positive developments in work and productivity. Litigation often leads to wasteful expenditure for involved parties (Kubasek et al., 2012).

Understanding the impact that this has on the whole stakeholder system is vital. It is critical to demonstrate the need for alternative dispute resolution strategies effectively. By acquiring enough insight into the various elements and impacts of the litigation process, it is possible to understand, appreciate, and establish the need for alternative dispute resolution methods. It is vital to consider the various techniques that can be applied in this case, such as settlement and negotiation, arbitration, mediation, private and mini-trials, summary jury trials, and early neutral case evaluations (Kubasek et al., 2012). These are various methods that present these disputing stakeholders to settle. Some of the significant and more impactful aspects of dispute resolution for firms revolves around the customer and the workforce. They are vital stakeholders, and various situational factors and characteristics of these disputes will be analyzed to provide a sample basis for the elaboration of the various advantages of alternative dispute resolution approaches in contrast to litigation.

Labor

Firms face different challenges. One that stands out in the firm-labor relationship is the fear or risk of litigation. Across the globe, there exist numerous means of protecting the human resources employed and engaged by firms. The impact this has is that it creates a buffer that protects from vital issues such as labor exploitation – a crucial role. The problem of this relationship is that for multinationals, rules and regulations often differ with the region of operation. For instance, some regions require an inclusive approach to employee engagement. Aspects such as gender balance and equality are some issues that are often highlighted. The institution, respect and adherence, and the termination of contracts are other elements that stand out as having a high incidence of conflicts arising. These factors reflect a need for the improvement of human resource relationships.

The consumer

Another critical dimension that arises concerning dispute resolution is the firm-consumer relationship. It is especially vital considering that it is a deciding factor for the firm. An unfavorable outcome from such a conflict would have extensively damaging results. For instance, a firm bears the risk of losing a significant portion of its market and consumer base – a profoundly negative turn of events. For example, if a company gets sued concerning its product, this could lead to a damaged and tainted reputation. If the firm is operating across country borders, this is bound to have an influential impact on product reception. Companies dealing with multiple products and services are affected explicitly as the reputation of other products and services, which may not be involved in a dispute, may develop a poor reputation.

For firms and involved stakeholders, there exist various advantages and disadvantages of alternative dispute resolution processes and strategies. For instance, mediation enhances the preservation of the relationship between the two parties. Further, it promotes an improved understanding of each other’s positions. Also critical is that it creates the potential for innovative and creative solutions to conflicts. In cases of arbitration, there is an aim to preserve the inter-party relationship. Arbitration is a powerful tool that handles various aspects such as salaries, labor disputes, conflicts in business, complaints by consumers, employees, and technological disputes. Although there are some shortcomings of these methods, they still present an amicable process of efficiently handling disputes. Assurance practices must be adopted to sustain and develop a firm’s sustainability and accountability in the legal environment (Ruggie, 2017). Some of the shortcomings include probable bias by the dispute resolution party. Also, the consumer is forced to give up the right to a trial where the possibility of better terms being awarded exists. The alternative dispute resolution approach is favored widely in international contracts – which reflects the advantages it bears for firms that have oriented their operations in this way.

In conclusion, the legal aspects of business and the business environment are vital. They bear the goal of easing the complex processes that comprise daily business operations, relationships, and other essential elements. For multinationals, it comes across as very important that the legal implications are analyzed and understood. They are critical decision-making inputs. They can guide aspects such as product development, marketing, and other critical operations. From the analysis, elements of conflict handling and resolution have also been identified as essential elements of the business operations process. The legal litigation process against a firm has been identified as particularly harmful to overall operations. The impacts on reputation are detrimental and could cause unprecedented public relations issues. The decision-making process requires stakeholders to understand the imposed implications and handle them effectively. The ideologies and concepts that are fundamental in the legal aspects of the business must be understood for effective planning and business structure alignment. It is critical to analyze the interaction of these elements and their influence on firms. Various dimensions, such as globally and locally oriented businesses, exist. It is, therefore, critical that the concerned stakeholders actively engage in pushing for a fair policy and regulatory structures. The business-government relationship should be enhanced to ensure that there is a mutually beneficial co-existence.

 

 

References

Kubasek, N., Brennan, B., & Brown, M. (2012). The legal environment of business. Pearson.

Newell, P., & Roberts, J. (2017). The globalization and environment reader (1st ed.). Wiley Blackwell.

Perego, P., & Kolk, A. (2012). Multinationals’ Accountability on Sustainability: The Evolution of Third-party Assurance of Sustainability Reports. Journal Of Business Ethics, 110(2), 173-190. https://doi.org/10.1007/s10551-012-1420-5

Ruggie, J. (2017). Multinationals as a global institution: Power, authority, and relative autonomy. Regulation & Governance, 12(3), 317-333. https://doi.org/10.1111/rego.12154

 

 

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"