Legal Environment Management: Summary, Case Law Discussion, Theories, and Risk Management

This article provides a comprehensive summary of legal environment management, including theories, risk management, and case law discussions on the Australian wheat board, Volkswagen scandal, JJ Richards Contract, and oil spill scandal. It also covers stakeholder and institutional theories.

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Introduction
The subject concerns the legal regulatory framework required by organizations in their
day in day out activities. It entails various objectives such as how to apply the relevant legal
environment knowledge to arising situations, being aware of the existing legal issues and coming
up with strategies to effectively respond to the existing risks, (Boutilier & Thomson 2011).It
also, advocates for the promotion of research writing skills that can play an effective role
evaluating legal information and further looks into existing theories in relation to organizations.
Summary of lectures
In regards to the summary of the topics tackled, topic one concerned how to manage the
legal environment in which the definition was outlined, theories in regards to the regulating and
enforcing environmental laws were discussed and further research into the provisions of the law
looked into, (Magness 2008).
The 2nd topic looked into the theory of governance, its various structures and who bears
the responsibilities and liabilities, the opportunities available and threats that exist in it
The 3rd topic was in regards to how the various legal relationships should be managed,
which include: special contracts such as those of employment or agency and its associated risks
where factors vitiating a contract such as offer and those that can result to breach such as mistake
& misrepresentation were outlined with relevant case laws such as Carlill vs. Carbolic
Smokeball.

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Regarding the 4th week, various obligations arising from the legal environment were
discussed more so the obligation in regards to torts, issues around it and the implications it brings
about.
In the 5th week, a response of the organization towards various challenges was looked
into, such as global challenges i.e. those faced worldwide while local ones are those of a specific
state. In addition, possible risks were also looked into and further ways to come up with
strategies in response to the risks via decision making were discussed, (Ansell & Gash 2008).
Case law discussion
The Australian wheat board case (1999-2005)
The case concerned one of the white collar form of crimes i.e. bribery which was
reported as one of the biggest international case. The company transformed from being run as a
public corporation to a private entity following the occurrence of the events below: The
Company was the biggest supplier of humanitarian goods under OFFP which existed as from late
1996 -2003, (Rogers 2008). During the period it got over 2 billion US dollars from BNP account
through selling over 6m tones of wheat to Iraq in which it paid over $ 2m illegal fee to Iraq that
later become responsible for the inland transportation of its humanitarian goods but due to
privatization the terms had to be changed, (James & Wooten 2010). Following this, the major
trends were in regards to requests for tender by IGB including illegal fees, contracts between
IGB & AWB including illicit fees, requests for added fees outside of the OFFP & AWB
complying to pay the illicit fees. Based on the investigation it was apparent that AWB committed
unacceptable act of paying unlawful fees, thus making the corporation a motivated lawbreaker
and by signing the contracts it made itself a motivated wrongdoer and appropriate target, (Wang
& Pizam 2011).
The Volkswagen scandal
The case concerned an allegation that VW, Audi and Skoda took part in misleading and
deceptive conduct in Australia, where it was discovered that most Volkswagen cars sold in the us
were fitted with a particular software made to evade pollution controls and that almost one
hundred thousand Australians owned Volkswagen that had been affected by the software.

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Despite the existence of various emails and letters referred to by the legal representatives of the
Australian competition and consumer commission where Audi and VW companies had admitted
to the regulators and their customers that their emission software was not in line with the
Australian laws they still argued that they didn’t have a case to answer since the approval of
affected cars came from Europe before their exportation to Australia
JJ Richards Contract
The company is one of the biggest owned private waste management corporations in
Australia that provides sanitary, recycling and green collection of waste services. It was the first
case in which the ACCC enforced in regards to the new laws that were put in place to protect
small businesses form unfair contract terms. As per the consumer laws in Australia any terms
result to imbalance of power between the entities don’t serve to protect their interests and that
which can cause financial detriment to small business if relied on, are unfair and void. Therefore
in the case, the federal court found the eight terms of contract by JJ Richards Company, used in
transacting small businesses were unfair and therefore declared void.
Oil spill scandal
The case also known as the deep-water horizon oil spill or BP oil spill an industrial
disaster that began in the year 2010 in the gulf of Mexico after being brought forward by Sinaloa
Class Actions which is an entity made up of lawyers specialized in environmental matters,
according to them, during the occurrence of the disaster, oil reached shores of Mexico and
therefore interfering with hundreds of people in the surrounding that relied on fishing and
tourism for sustainment. Later it accepted to compensate the damage in us
Stakeholder’s Theory
In looking at this theory it’s important to consider the key definition of a ‘stakeholder’
which refers to any person or group who has impact or can be affected by the operation of an
organization. Such include: shareholders, employees, suppliers, customers and the community at
large. On the other hand, generally the theory idea entails what the organization should be and
how it should be conceptualized. Ackermann & Eden (2011) is of the idea that the entity should
be taken as a group of stakeholders whose role should be to manage their interests, needs and

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viewpoints, (Jones 2015). Further, the definition is always a subject of debate in literature which
has resulted to recent definitions such as; they are groups who play a significant role in the
continuity and success of the business
Further, the theory is looked at in various ways i.e. the normative way in literature, the
descriptive way and the instrumental stakeholder theory all concerning how managers should
conduct themselves and the company activities, (Jamal & Stronza 2009).
Institutional theory
The theory can be looked at as new & old theory of the institution, whereby the old
suggests that corporations are bodies that show the values of a society while new suggests that
bodies are reflected in corporations. Further, the theory in regards governance is influenced by
almost all theories concerning ethics because the expectations of a society are natured and styled
by governance. In conclusion therefore, what organizations take part in, how they are managed
and what is expected in response to regulation is majorly influenced by institutions.
Management of legal risks
Risks in the legal sphere arise due the various relationships that exist among the different
parties such as parties to a contract, employment and agency relationships. Therefore the legal
environment comes up with strategies that help in the regulation of such risks which include:
coming up with laws whose sources include the common law and legislations such as acts of
parliaments, (Cole 2016). Further, the management may be indirect vs direct or market and non-
market. Market involves interactions between corporations and other individuals usually
providers while the non-market involves the social, political & legal arrangements that enable
communications in conjunction with, markets and private entities, (Mitchel, Wood & Agle
2017). Issues for management include; protection of the environment, technological regulations,
safety & health international exchange policies, corporation responsibilities and ethics.
Further, there exist risk management standards that must be complied with through
adhering to the laid out laws, (Alkin, Christie & Vo 2012). Failure to manage the risks it might
result to reduction in reputation of the market, reduce market opportunity or result into loss of
value.

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Reflection
The topic and the learning outcomes are of much importance more so to organizations as
they help them be aware of the existing dangers they are exposed to and be able to develop
flexible strategies that can be able to address both global and local challenges.
The theory of agency
The agency theory involves two main parties i.e. the principal and his agent where the
agent acts on behave of the principal and therefore resulting to liability on the principal as he is
bound by the actions of the agent done in course of duty or under the principal’s instructions,
(Lan & Heracleous 2010). Further the agent-principal authority arises under any of the
following: express where the agent is instructed to act in a certain way; implied authority which
can be construed from their conduct; ostensible; ratified and by necessity

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References
Ackermann, F., & Eden, C. (2011). Strategic management of stakeholders: Theory and
practice. Long range planning, 44(3), 179-196.
Retrieved from https://espace.curtin.edu.au/handle/20.500.11937/19746
Alkin, M. C., Christie, C. A., & Vo, A. T. (2012). Evaluation theory. Evaluation roots: A wider
perspective of theorists’ views and influences, 386.
Retrieved from journals.sfu.ca/jmde/index.php/jmde_1/article/download/348/34
Ansell, C., & Gash, A. (2008). Collaborative governance in theory and practice. Journal of
public administration research and theory, 18(4), 543-571.
Retrieved from https://academic.oup.com/jpart/article-abstract/18/4/543/1090370
Boutilier, R. G., & Thomson, I. (2011). Modelling and measuring the social license to operate:
fruits of a dialogue between theory and practice. Social Licence, 1779-96.
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%20SLO.pdf
Cole, T.R. (2016). “Report of the inquiry into certain Australian companies in relation to the UN
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Jamal, T., & Stronza, A. (2009). Collaboration theory and tourism practice in protected areas:
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Jones, T.M. (2015). ‘Instrumental Stakeholders Theory: A Synthesis of Ethics and Economics.’
Academy of management review

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