1

CHALLENGE IN BUSINESS LAW: COMPLIANCE ISSUES

Student Name

Institution

Professor

Date
 2

CHALLENGE IN BUSINESS LAW: COMPLIANCE ISSUES

Business Law can be simply defined as the body of rules concerned with the conduct of

businesses and persons engaged in merchandising, trade, commerce, and sales (Parker &

Nielsen, 2011). It encompasses the set of relations and rights that guide businesses and persons

in commerce, trade, sales, and merchandising. It is the law governing all commercial matters. A

challenge in business law, therefore, is any issue that affects either the persons, the businesses or

the regulators. Compliance is a challenge that affects all parties in the arena of business law. It is

a prevailing challenge to business law as many business and persons fail to fully comply with

business law. Compliance simply denotes the state of a business or person meeting their legal

obligations to secure the welfare, health and safety of others as dictated by business law.

There are a multitude of issues affecting businesses regarding business law. Many

contemporary challenges in business law are evidenced among small businesses. One key

challenge demanding major focus is compliance. It has indeed become evident that it fulfilling

minimum requirements as declared in business law may lead some businesses or persons in

commerce to miss opportunities. Many small business fail to clearly understand the various laws,

regulations and rules governing their businesses, and how such can help them take advantage of

some benefits offered while ensuring that they fully comply with business law requirements.

Small business fail to understand that the growth of their business partly calls for greater

compliance demands. Additionally, others fail to obey even the simplest laws such as obtaining a

license for their business in their town. Another petty compliance issue is failure of businesses to

pay their taxes. As issues become complex due to the growth of business, the seriousness of

compliance becomes more important and evidence. This is due to the growing scope of
 3

responsibilities concerning hiring, firing, workers, discrimination, safety, wages, payroll, benefits

and harassment among other issues (Parker & Nielsen, 2011). Indeed, the way a business is

operated such as in selling a service or a product may fall under government’s auspices. This

implies that the business ought to meet the guidelines of such a government agency. This is has

become a huge challenge for many stakeholders.

Many individuals and business fail to comprehend the need and consequences of

compliance. They do not understand that being compliant reduces the risk of penalties,

shutdowns, lawsuits, fines and work stoppages among other risks. Indeed, lack of compliance

leads to costly sanctions, besides minor warnings and chances for corrections. Most businesses

ought to understand the importance of meeting their legal obligations in their business

procedures as it reduces their chance of being involved in many cases. Given the multitude of

companies and businesses that do not fully comprehend the legal issues relating to business, it is

best advisable for them to have compliance experts who can aid them in understanding their

legal obligations, hence allowing them to chart a better way of complying.

Compliance is of vital importance to businesses, rather than harming them. Indeed, rules

and regulations regarding business in having the best operating conditions. For instance, laws on

harassment and discrimination may help a business to create a good working environment if they

comply with the respective rules and regulations. This in turn shall ensure better returns or sales

for the business. Compliance to business rules and regulations is thus of direct benefit to a

business (Benedek, 2012). Productivity relies on compliance, hence greater productivity

demands greater compliance. It is also key to note that compliance aids as a protection against

fires, evacuations, injuries and any other safety and security issue that may negatively impact the

profitability for a company or business. Prevention of such issues relies on compliance of

 4

stakeholders with business law in its entirety (Benedek, 2012). Business ought to review the

suggested business practices in order to ensure that they meet the legal obligations without much

struggle. To safeguard and strengthen a company’s operations requires their compliance of legal

obligations and business practices as dictated by the respective regulators.

Lack of compliance by businesses leads to poor public relations. A business that does not

meet legal obligations may have a problem in their marketing of materials. Additionally, an

uncompliant business would not give equal opportunity to the public even in their job

recruitments and advertisements. This would never please the public. On the other hand, a

compliant business would not hesitate to post on their website about their mission statement,

including their stand on such issues as sexual orientation, race, and creed. This would aid the

business by showcasing to the public that they do not discriminate based on the respective

phenomena. To be compliant dictates a business to referencing policies and benefits as they

relate to the contribution of the wellbeing and healthcare of members and the community.

Good employee retention cannot be achieved without compliance. Most businesses have

compliance issues regarding protection of their workers (Peterson, 2013). A professional and

safe environment would ensure that workers stay within a business for as long as they would

wish. On the other hand, lack of fairness, safety and professionalism in the work environment

would reduce employee retention. A business should take steps to ensure that no one

discriminates their employees in order to retain the valuable employees. Procedures and policies

that reflect the obligations of a business in compliance could encourage better employee

retention if included in the employee guidebook, with the respective procedures specifying

actions on breaches. Additionally, such stated policies ought to be enforced to ensure their
 5

strength and effectiveness. Indeed, a serious business is one that regularly checks on complaints

while properly handling them.

Management of compliance is important in the work environment. Without management

of compliance, the environment would be hostile and chaotic. Such an environment would be

counter-productive, not allowing the business to achieve its goals. In fact, such a work

environment may be considered as illegal based on business law. A hostile working environment

is characterized by such issues as harassment or disparate treatment based on race, color, origin,

sex, age, and religion among other classes (Parker & Nielsen, 2011).

Businesses and business law are dynamic processes that change with time and conditions.

There are laws, regulatory requirements and regulations that evolve with time, with introduction

of others. For instance, the current new normal has brought about quite new conditions that

demand improvement in compliance (Benedek, 2012). There is great need for incorporation of

compliance into the normal as a management mechanism that further ensures reinforcement of

the compliance system. Effective business management conforms to business law, and hence

shall have less or no compliance issues. This would ensure a firm position for such a business in

the market. Indeed, compliance is a major business law challenge for many stakeholders.
 6

References

Benedek, P. (2012). Compliance management–A new response to legal and business

challenges. Acta Polytechnica Hungarica, 9(3), 135-148.

Parker, C., & Nielsen, V. L. (Eds.). (2011). Explaining compliance: Business responses to

regulation. Edward Elgar Publishing.

Peterson, E. A. (2013). Compliance and ethics programs: Competitive advantage through the

law. Journal of management & governance, 17(4), 1027-1045.