Impact of Legal Regulations on Woolworths Retail Business Operations

This report examines the influence of legal regulations on Woolworths, a major Australian retail organization. It explores the legal environment, including share trading laws, Australian standards, and the Competition and Consumer Act. A PESTLE analysis is conducted to assess the impact of political, economic, social, technological, legal, and environmental factors. The report highlights specific regulations governing retail operations, such as trade measurement laws, and identifies areas of high legal risk for Woolworths. It further discusses the short-term and long-term implications of these risks, as well as strategic options for risk management. Recommendations are provided for selecting the most appropriate strategies, considering both benefits and costs. The analysis covers the company's history, operations, and its expansion into the South Asian market, offering a comprehensive overview of the legal and business challenges faced by Woolworths. The report also mentions the company's ethical and social practices, and its response to cultural and international influences.

Running Head: Effects of Legal regulations of a country on the retail organizations
Effects of Legal regulations of a country on the retail organizations
Executive Summary
The following study has included the details about the legal procedures and regulations that must
be followed by any retail organization in order to conduct its business related operations in a
proper and legalized manner. The legal factors have been included along with some other factors
like political, economic, social/cultural, international and ethical factors for the company. Some
of the specific rules and regulations that govern the considered organization have been described
along with the areas that are under high risk. The major risk factors associated with the
operations and legal aspects of Woolworths Company have been mentioned along with the
strategic options that can be chosen in order to mitigate or minimize the consequences of those
risk factors. The study also includes some recommendations to choose the right options among
the available ones so that the company can receive necessary benefits without involving much
input cost in the operations.

Effects of Legal regulations of a country on the retail organizations
Table of Contents
Introduction......................................................................................................................................4
Overview of the organization..........................................................................................................4
Understanding the legal and regulatory environment along with other factors that influence any
business............................................................................................................................................5
Pestle Analysis.............................................................................................................................5
Some specific regulations that govern the public sector retail organizations..................................8
Areas of high legal risk for the company.........................................................................................9
Short term and long term effects of implications of the legal risk for the company.....................10
Short term effects.......................................................................................................................11
Long term effects.......................................................................................................................11
Strategic options for management of the legal risk and evaluation of the options available to the
company in terms of benefit and overall cost of the organization.................................................12
Recommendations for choosing the most appropriate option along with the rationale................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Effects of Legal regulations of a country on the retail organizations
Introduction
An organization has to perform at its best in order to remain as a strong Contender in the market
and ensure it success in the upcoming future. The senior executive departments and managers of
the organizations therefore ensure that every aspect is followed which will ultimately help the
company developed and expand in a better way and stay ahead of its competitors. However, it is
also very important that no violation of rules is made by any individual of any hierarchy and the
legal regulations are strictly followed to avoid any unnecessary consequences to the company.
The following study has considered an Australian based public sector retail organization that is
operating since a very long time and is excellent very well in its domain of operation. The study
has mentioned the different legal factors that have influenced the operations of the company and
has described some legal regulation mentioned by the Australian government. The legal factors
have been included along with some other factors like political, economic, social/cultural,
international and ethical factors for the company. Some of the specific rules and regulations that
govern the considered organization have been described along with the areas that are under high
risk. The short term and long term impacts of these different risk factors have been stated in the
study along with some of the strategic options that the company can opt for considering the
benefits and the costs involved in implementing those options.
Overview of the organization
The Woolworth Company is a public retail organization located in Australia which provides
supermarkets and grocery services to the Australian customers since 1924 when it was founded
by Percy Christmas, Stanley Chatterton, George Creed, Earnest William, and Cecil Scott Waine.
The headquarters of this company is located at New South Wales Australia and it operates
mainly in Australia and New Zealand. However, the company is slowly expanding its operations
in South Asian countries like India. The existing chairman of this company is Gordon Cairns
who handles the operations of the company along with the chief executive officer Brad
Banducci. The company employs 328,511 employees all over the world as per the records of
2015 who contribute towards average annual retail revenue of over 100 billion Australian
dollars. The Woolworth Company operates 2,022 supermarket and grocery stores in almost every
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Effects of Legal regulations of a country on the retail organizations
major city of Australia. The company also recorded an almost 4% annual growth in the grocery
and supermarket segment business between the year 2011 and 2016.
Understanding the legal and regulatory environment along with other factors
that influence any business
There are many legal procedures that are required to be considered before initiating any business
in any country. These legal regulations vary from one country to other depending on the
regulatory environment of different nations. In case of Australia, There are several laws that are
to be followed by businessmen both from private and public sector domain in order to run their
respective companies without violating any of the legal procedures or regulations. The share
trading laws are the most crucial aspects that an organization needs to considered before
initiating any business and operating the pain after initiating it (Geppert, Williams & Wortmann,
2015). The most important regulations include the Australian share trading laws, Australian
standards, and codes of practices, complying with the competition and consumer act, and the
Australian consumer law. In addition to this, every organization especially those belonging to
retail sector need to sell their products by following the necessary legal procedures like pricing
regulations, product labelling, providing refunds and warranties on goods and services depending
on its nature, displaying the prices, and adhering to the Australian trade measurement laws.
The fair trading laws include the most prominent federal law which is the Competition and
Consumer Act also known as the CCA that was enacted in 2010 in the Australian parliament.
According to this act, every organization needs to be transparent while conducting any
negotiation or deal with the stakeholders of the business that might include wholesalers,
suppliers, retailers, competitors, and most importantly with the customers. The main governing
authority that administers the Competition and Consumer Act is the Australian Competition and
Consumer Commission or the ACCC. This particular commission provides supports to any
individual or organization that has been victimized because of any fraud conducted by any other
person or company. This particular act of the Australian fair trading laws specifically mentions
that every stakeholder involved in the shipping, transportation, manufacturing, retailing,
wholesaling, storing, and selling of the products must keep the operations transparent and
register to the tax laws followed in Australia.
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Effects of Legal regulations of a country on the retail organizations
Pestle Analysis
The operations of Woolworths company in Australia is also affected by various other factors like
economic, ethical, social, cultural, political, and international factors. The economic stability is
very important for proper operation and expansion of any organization because it will ensure a
safe future for the organization (Crosbie et al. 2018). Moreover, the social and cultural aspect is
also very important because the products which are sold are the services that are delivered by the
company must be in sync with the demands of the people based on their social and cultural
preferences of products and services. The political scenarios do not matter very much in case of
public companies but they too have an impact on the overall functioning of an organization.
Following are the major impacts of these factors on the operations of Woolworths Company.
Figure 1: Pestle Analysis
(Source: Crosbie et al. 2018)
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Effects of Legal regulations of a country on the retail organizations
Economic: The Woolworth Company has average annual revenue of more than 100 million
Australian dollars which makes it an economically stable organization and makes it capable of
doing new investments in different regions and domains of business. The company has been able
to expand its area of operation in to the South Asian region in developing countries like India
where it has identified a huge market.
Ethical: The ethical factors constitute the intentions of any organization in conducting the
operations in a fair and unbiased manner. The production and packaging of every item must be
done probably according to the necessary standard. The companies also need to ensure a
desirable level of hygiene while packaging and processing of the food products (Stubbs &
Higgins, 2018). The Woolworth Company has been able to deliver a superior level of ethical
operations in delivering its services.
Social: The social factors like providing the necessary products that are demanded by the
customers and delivering proper customer service are some of the crucial aspects of retail
business sector (Greenlan, Johnson & Seifi, 2016). The Woolworths company has been able to
deliver the right kind of service as per the customers’ expectations and therefore it is excelling in
the Australian retail sector market at a considerable rate as it has expanded its operations by 4%
in 5 years.
Cultural: Any organization must ensure that the products and services that are being provided to
the customers are properly linked to the cultural preferences. This is a very important aspect in
terms of fashion marketing and food preferences because the fashion of clothing is likely to vary
with culture and hence the organizations must be careful about the clothing accessories that are
being sold (Bernzen & Braun, 2014). The Woolworth Company primarily focuses on the items
which are preferred by the customers from the cultural perspective and it also introduces some
unique collection of decorative accessories during different festivals and seasons.
Political: The political perspective is not very harmful for the public sector organizations
because the laws are not changed very frequently and the government is generally done by the
individual that has been appointed as the chairman of the CEO of the company (Soh & Martinov-
Bennie, 2015). The political scenario of Australia is very much in favour of Woolworth
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Effects of Legal regulations of a country on the retail organizations
Company and hence the organization has experienced no adverse impact of political changes
taking place in the country.
International: The international factors like manufacturing of different items and providing
them to international destinations act as decisive factors whenever there is international trade
businesses involved in the overall operation (Nossar et al. 2015). Since the Woolworths
Company mainly deals with supermarkets and grocery related items which consist of products
and services of daily household uses, the international factor has very less impact on this
company. However, the company has recently started its operations in India where it has to
compete with various other Supermarket giant like Big Bazaar. Therefore, the amounts of
investments that are done in the different sectors have an impact on the overall operations of
Woolworths Company.
Some specific regulations that govern the public sector retail organizations
There are various regulations that govern the public sector organizations. However, the
Australian trade measurement laws are among the most significant legal aspects which must be
covered while conducting any retail trade related operations. The National measurement act
which was enacted in 1960 in Australia has specified the legal measures that the retail sector
organizations belonging to both private and public sectors must follow properly. Following are
the different aspects of regulations which are covered under the trade measurement law.
Defining legal measurement units: The organization must properly define the legal
measurement units which are being used during the entire retailing operation. This means that
the products which are being sold by retail companies must be measured according to some legal
measurement units like kilograms for solid products which are being sold in small quantity and
quintals for those solid products which are being sold in large quantity (Magnusson & Reeve,
2015). Similarly, the liquid items which are being sold by any retail company must have a proper
measurement unit like liters or gallons. The Woolworth strictly follows the standards of legal
measurement units and ensures that every item is either equal or more than the weight value
specified on the packaging. The measurements of some unique items that require measuring the
length and other dimensions must also be measured properly by using the legal measurement
units like meters or foot.
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Effects of Legal regulations of a country on the retail organizations
Use of proper measuring instruments for trade: The companies must ensure that the
instruments and devices which are being used for measuring are properly calibrated and tested
before implementing them in the operations (Bernzen & Braun, 2014). It is a better choice for the
companies to use licensed and branded products for measuring like weighing machines. This is
very important in case of groceries because the companies that sell grocery related items are
likely to face some issues while measuring the items. Hence, the measuring instruments must be
proper without any error so that no customer is cheated deliberately or unintentionally.
Proper testing and verification of the instruments: The instruments which are used in
measuring the items at every stage of the entire retail business must be calibrated properly and
regularly to check the degree of accuracy and precision of those items (Mossialos et al. 2015).
The normal time of testing and verification of the instruments is of 6 months interval. However,
the electronic devices must be tested at least once in a year so that the necessary amount of
precision could be maintained. In case of an internal damage of the sensor or spring of weighing
machines, the necessary component must be replaced immediately with a healthy component so
that the functioning of the device or instrument is not compromised in any manner. It has been
observed that the reading of a malfunctioning machine shows a different value than the actual
value. In case the displayed value is more than the actual value, it will be a loss to the company.
However, if the case is vice versa, the customers will be at the losing and visual create an ethical
related issue with the company.
Licensing public weighbridges: The public weighbridges which are used to weigh the heavy
items like trucks and transport vehicles must be licensed by the government authority. It is
necessary for the users who are generally the transportation and logistics operators to ensure that
the weighbridges operators are licensed by the government and have been provided a unique
license number (Reinecke & Donaghey, 2015). This ensures that the overall operations of the
company are conducted without any deliberate or unintentional fraud. The Woolworth Company
is very strict about the measurement of its items in terms of weight at every location starting
from public weighbridges where heavily loaded trucks are weighed to the end point where the
customers are delivered the groceries packages after properly measuring their weights.
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Effects of Legal regulations of a country on the retail organizations
Areas of high legal risk for the company
Although there are not many areas of high risk for Woolworths Company because every Legal
procedure and regulation is followed by the organization, there are some areas where the
company might have to face some risk factors because of the possibility of unintentional human
errors. It is necessary that every Legal procedure is followed without any failure and an
awareness of any law does not counts as an excuse to break the same in most of the countries
including Australia. Therefore, the most prominent area where there might be a high legal risk
for the company is the conduct of operations by and untrained professional where the individual
has unintentionally broken a law. The most common area of this error is the weight measurement
of items that are sold to the customers.
According to the trade measurement laws that have been enacted in Australian parliament during
the introduction of national measurement act 1960, a company must ensure that the weight of
any item during the time of sale is either equal or more than what is mentioned on the packaging.
Hence, it is necessary that the company must be very careful about eatables or food items that
tend to shrink after sometime (Kruisbergen et al. 2015). The processed food products like bakery
items including bread and cheese are process with the help of yeast and some bacteria.
Therefore, the item which has been packed at a weight of 1 kilogram might shrink by some
percentage during the time of sale. Hence, it is necessary for the company to ensure that the right
amount of material or food item is packaged so that the weight of that item is equivalent or more
than the mentioned weight on the external packaging. However, the company must also mention
the packaging and storage condition so that the bacteria and yeast do not result into some internal
chemical or composition changes to shrink the entire food item. Therefore, most of the
companies including Woolworth mention the specific condition under which the item must be
stored in order to avoid any shrinking (Gartner & Hall, 2015). It is also very important to
mention that the companies must specifically mention the weight by including a statement telling
the weight during the time of packaging. This means that any food item which is based and is
likely to shrink after few hours will have a statement in bracket telling that the weight of the item
is during the time when it was packed just after the specified weight.
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Effects of Legal regulations of a country on the retail organizations
Short term and long term effects of implications of the legal risk for the
company
There are various short term and long term effects of the implications of the legal risk that have
been mentioned above with regards to various retail sector organization that deals in food and
grocery products along with the Woolworth Company. The most prominent short term effect will
be an argument with the customer who successfully finds out the difference in the weight of any
item. The Woolworths Company stores and supermarkets sell millions of products everyday and
the probability of such an outcome is very low. However, the overall short term impact could be
significantly high if multiple customer report with the same issue in a short duration (Nossar et
al. 2015). The short term effect might also include some minor loss to the company due to some
errors displayed in the weighing machines. The long term effects however might include no
compromise with the brand image of the company. Following are the details associated with
short term and long term effects of implications of these days for the company.
Short term effects
The short term effects of the risk that has been discussed about include the temporary argument
of any sales executive or manager of a Supermarket store with the customer (Kumarasiri & Jubb,
2016). The customer can report about an issue regarding the weight of an item if the overall
weight of any food product is found lesser than the mentioned figure on the package. This
argument can be easily handled by the managers by having a discussion with the customer and
providing an assurance of better service in the future. Similarly, if this particular issue is faced by
multiple customers at the same time, the managers might have to temporarily stop the operations
associated with the product and order for an investigation in order to find out the perpetrators
behind the matter. This can be caused due to some human error or due to some machine error
and hence can cause some temporary impact on the overall operation. It is very important for any
manager to investigate the matter within a limited time and restart the operation so that the
inconvenience caused to any customer can be minimized (Nica, 2015). The short term effects are
likely to cause some minor monetary losses to the company because might they need to pay
some customer depending on the issues faced by the latter and the legal regulations specified in
the Australian trading, marketing and business laws.
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Effects of Legal regulations of a country on the retail organizations
Long term effects
The long term benefits associated with the risk discussed in the above section might be a huge
loss of monetary assets to the company. Any individual public weighbridge can result into some
heavy legal consequences for every stakeholders involved in the business (Waye & Morabito,
2016). For example, if any public weighbridge operator fails to identify an error within the
internal machinery and components, the weighbridge display system is likely to display a
different value of weight then the actual value. In case the displayed value is higher than the
actual value, the company will reduce the extra amount of weight from the vehicles which will
ultimately affect the customers who are at the receiving end of those products. However, in case
the displayed value is lower than the actual value of items present in the vehicle, the company
will add some extra items which will cost extra money resulting into some unnecessary losses of
money and time to the company. The error can be detected at later stages and this will compel
the organization to take necessary steps to adjust the previous figures which further might invite
some unnecessary scopes of human or machine errors (Turner & Nugent, 2015). The long term
effects of this operation might also leads to some highly critical impact like adverse effects on
the company reputation among the public or customers.
Strategic options for management of the legal risk and evaluation of the
options available to the company in terms of benefit and overall cost of the
organization
In order to reduce the possibility of unfavourable consequences because of the legal risks
associated with the scopes of error described in the above portions of the study, the company
must ensure that all the regulations are followed without any compromise. The company must
take proper measures to conduct its services in accordance to the government and legal
procedure and regulations. Following are the different strategic options that the senior level
management and executive officers of Woolworths Company can choose in order to reduce the
legal risk.
Training the workforce: The Woolworths Company must train the workforce in almost every
aspect so that the basic details of every aspect including the technical aspect are known to every
individual working with the company. The proper training and practice of employees in technical
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Effects of Legal regulations of a country on the retail organizations
sector ensures that there are multiple alternative available for the organization to handle any
situation due to the availability of a larger workforce equipped with technical knowledge
(Herteleer et al. 2018). The company must also cover all the basic and preliminary stages of
Technical training associated with the devices and instruments used for weight measurement of
different items sold by the company. This must include covering the syllabus of different types
of Technical instruments used for vein the products along with their minimum value and overall
range.
Benefit and cost evaluation: The conduct of training of the employees in technical aspects will
cost a significant amount of money to the Woolworths Company. Therefore, the managers must
find out a profit schedules in order to train the employees so that the mainstream work of the
company is not stagnated. The training of employees during an ongoing company operation must
be given in multiple batches in order to avoid any form of compromise with the mainstream
operation of the company (Uddin, 2017). This is very helpful to manage the training cost and
profit earned by the company. Moreover, the benefit of training is also gain without involving
much into the off stream operations like extra training.
Proper maintenance and calibration of the Machines: The machines must be calibrated on a
regular interval and maintained properly to ensure their proper functioning. The company needs
to employ is separate department in order to maintain and calibrate the machine. The
maintenance team will look for proper lubrication and cleaning of the machines. The team will
also look after the Machines in the storage locations to ensure that the machines are kept under
the right conditions. The maintenance teams will also keep a record of the calibration dates of the
machines and test the same to identify the errors in terms of deviations and magnitude.
Benefit and cost evaluation: The maintenance and calibration of the machines are very
important and effective methods of ensuring the protection and immunity for the company from
any legal risk. The overall cost will be quite higher than other methods but the benefits will be
even higher. Therefore, this option will be very beneficial for the company for long term benefits
as it will save the company from losing the monetary assets due to the main functioning of the
machine as well as from some legal consequences in the future.
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Effects of Legal regulations of a country on the retail organizations
Replacing faulty machines: Replacing the faulty or malfunctioning machines can be considered
as the best and the most appropriate option from the perspective of operational quality. This is
because any machine after the usage of several years is likely to show some malfunctioning or
unusual outcomes (Gibson & Warren, 2016). However, it includes a huge amount of cost that
needs to be invested in purchasing new machines. This stem is likely to reduce the score of errors
by a significant level and enhance the quality of operations by a considerable degree. The
economic conditions of Woolworths Company do not form any kind of barrier in taking this step
and the machines that are malfunctioning can be easily replaced.
Benefit and Cost evaluation: The overall cost of replacing every machine that is
malfunctioning is likely to be very high and will result into a huge burden on the company
management. However, the benefit of taking this step is very productive as the scopes of
machine error will significantly reduced as well as time and cost can be saved from being wasted
due to maintenance and repair options. The cost of replacing smaller machine will be very less
and hence this operation will be very cost effective and highly beneficial in terms of smaller
weighing machines. However, the weighing machines mounted in stores of the company will
cost a happy amount to the organization if they are replaced. Therefore, the cost factors will be
very high compared to the benefit parameter in case of heavy duty weighing machines that have
started malfunctioning.
Repairing machine components: The repair of the Machines by replacing a minor part of the
same is a very economic and feasible option for every organization. However, the option needs
to be chosen on the basis of various factors. The machine components can be replaced if they are
not too expensive compared to the overall cost of the machine and if the company can issue a
better functioning for a longer duration. However, in case the components that are to be replaced
in the machine are very expensive and are likely to show the same malfunctioning in the near
future, repairing is not a good option (Friel et al. 2016). The small sized weighing machines are
better for replacement option whereas the big sized weighing machines used in stores to measure
the weight of heavy loads are good for being repaired.
Benefit and Cost evaluation: The overall cost that is likely to we spent by the company during
repair is generally lower than the cost used to replace the entire machine. Therefore, the repair
option for a big sized machine is very cost effective for the company apart from being very
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Effects of Legal regulations of a country on the retail organizations
beneficial. However, repairing the components inside the smaller machines that are used for vein
smaller items at the counter is not a cost effective option.
Recommendations for choosing the most appropriate option along with the
rationale
There are no specific options available for the company that can be chosen alone to deal with the
legal consequences and risks in the operations. However, the organization can choose multiple
options in a balance way to get the most favorable outcome. Following are the options that the
company can choose in order to deliver the best result from the customers’ and company’s
perspectives.
 Maintaining and repairing the heavy duty machine: Carrying out the maintenance and
repair for heavy duty machines will save a huge amount of cost because the replacement
of the entire machine will cost a happy amount. Moreover, the maintenance and repair
will also produce and display accurate outcomes that will be beneficial for the company
and the customers.
 Replacement of light weight machine if found malfunctioning: The light weight
machine consists of some components that are quite expensive and even cost around 60
to 70% of the cost of entire machine. Hence, it is a better option to replace the light
weight machines in case they start malfunctioning.
 Training the staff in small batches: The working staff must be trained in small groups
and batches so that the mainstream operations are not affected by the training. This is also
very important because the trainers will be able to provide adequate training, guidance,
and assessment to the trainees if present in small batches.
Conclusion
The above study has explicitly defined the legal aspects which must be considered in order to
carry out any retail business successfully. The short term and long term impact of legal
procedures and regulations present in the Australian business system have been included in the
study along with the overall benefit of the same. The overall impacts of various other factors like
ethical considerations, international factors, economic factors, social, and cultural aspect are
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Effects of Legal regulations of a country on the retail organizations
stated in the study. The organization chosen for conducting this research was Woolworths
Company which is located in Australia and serves in every major and suburban city of the
country. Apart from that this company has also initiated its operations in India apart from New
Zealand where it is already serving from a long time. The major risk factors associated with the
operations and legal aspects of Woolworths Company have been mentioned along with the
strategic options that can be chosen in order to mitigate or minimize the consequences of those
risk factors.
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Effects of Legal regulations of a country on the retail organizations
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