Managing under regulation
Question: Compare, contrast and evaluate the advantages and disadvantages of different corporate strategies for compliance with regulation that is followed by firms in two differently regulated industries.
Follow these key guidelines for designing your essay:
i. Briefly define the standards you will use for your evaluation of the compliance strategies.
ii. Explain your selection of regulated industries and firms.
iii. Describe the companies’ strategic approach to compliance.
iv. Identify the advantages and disadvantages. Compare them (consider using a table to do so).
v. Explain why the companies chose those strategies.
vi. Examine the companies’ internal structures used to pursue that approach to compliance.
vii. Give an overall evaluation of the balance of advantages and disadvantages in the cases that you have examined.
Take care to consider the following advice while preparing for your essay:
viii. Select companies carefully. You may find examples in the readings, or in online case studies, or from reports on regulators’ web sites.
ix. Concisely set out the basis on which you have selected the industries for comparison.
x. Review the ways in which those strategies have responded to the different approaches taken by the regulatory authorities and their different powers over the companies.
xi. Consider whether those strategies were effective, given the responses of the regulatory bodies.
xii. Ensure that your answer demonstrates your learning from each part of the module.
Strategies
Some companies focus their compliance strategy of achieving minimal level compliance at the lowest cost. Some focus on achieving maximum competitive advantage by anticipating future regulation to steal a march on their rivals. Some focus their strategy on compliance in a manner which enhances their reputation, and so use it for publicity and branding as much as for legal duty. Some even behave so badly as only to comply in token ways, and just either hope not to get caught or else just set a budget for paying fines and regard them as a cost of doing business (and most regulators are usually astute to these companies). Some companies pursue hybrid strategies, trying to balance two or more of these types of approach.
