Influence: Legal regulations Flashcards
What are legal regulations?
This external influence includes a range of laws with which a business must comply with. Operations management has particular laws that influence how practices and processes are conducted, particularly around labour, technology, finance, machinery and energy and include the following;
Other legal regulations relate to: ● Labour laws (minimum wage, NES, employment contracts, compensation, work health and safety) E.g. under Work Health and Safety Act (2011) employers must diligently prepare an O,H&S report of the business to ensure that employees are provided with a work environment that is physically and mentally safe, including safe worksite, machinery, systems, information & training and suitable working environment.
environmental and public health laws (against dumping, pollution and disposal of waste) licensing laws (training or certification, zoning, restricted working hours, disclosure restrictions) taxation (levies and duties, taxes on profit, superannuation) trade practices (issues of market power, misleading conduct, competition and product safety) migration and rules re: offshore labour (minimum standards re: labour brought in from offshore) intellectual property (copyright, patents, trademarks, designs etc.); financial and corporations law (standardised methods of financial records) human rights (anti-discrimination) The range of laws with which a business must comply are collectively termed compliance. The expenses associated with meeting the requirements of legal regulations are termed compliance costs.
What is the IKEA case study?
As IKEA sells products globally, the operations manager must ensure each product meets global product safety regulations. For example, in the series INSIDE IKEA, the operations manager had difficulty in meeting the Federal Flammable Fabrics (FFF) Act of the United States. Therefore, IKEA had to alter their inputs (materials) to meet this legislation. In 2013 the EU introduced the EU Regulation 995/2010 banning illegally sourced timber to be used within the EU. Working with Forest Stewardship Council (FSC) certified timber plantations (IKEA aims to use 100% FSC certified timber by 2020) is one way IKEA are ensuring they adhere to this regulation.
