Empowering Business Managers: The Crucial Role of Legal Knowledge

∙ By ∙ No Comments

Management expertise is often lauded as the cornerstone of success in the competitive business arena. However, an unsung hero is equally pivotal in steering companies towards prosperity: legal knowledge. Understanding the law is not just necessary for legal professionals; it’s a crucial asset for managers across all levels of a business organization.

Photo by Tingey Injury Law Firm on Unsplash

Why Legal Knowledge Matters for Managers

Management students might initially baulk at the idea of delving into legal studies. The dream of becoming a top-tier manager in a multinational company often doesn’t include grappling with legal jargon. Yet, the reality is starkly different. Legal acumen is not a luxury but a necessity, even more so in smaller organizations where a dedicated team of lawyers is a distant dream.

Costs, Profits, and Legal Implications

Photo by Scott Graham on Unsplash

For any profit-oriented enterprise, the bottom line is king. Legal considerations are integral to cost-cutting and profit-enhancing strategies. Without a basic understanding of the law, even the most business-savvy managers can find themselves at a disadvantage, unable to navigate the complexities of legal constraints and opportunities that directly impact financial outcomes. Not all organizations have the luxury of an in-house legal department. Smaller entities may lack the resources, while even medium-sized firms might find it impractical to maintain a legal team for every possible scenario. Given the multinational operations of most companies today, legal expenses significantly affect financial outcomes, making at least a foundational legal education not just a theoretical concept but a practical necessity for managers.

The Manager’s Role in Legal Decision-Making

Photo by Jason Goodman on Unsplash

As managers climb the corporate ladder, the expectation for legal literacy rises. Decisions made without considering their legal implications can lead to dire consequences for the organization. A manager’s ability to foresee and mitigate legal risks is desirable and expected. Managers at all levels are expected to comprehend the legal consequences of their actions, with higher-ranking individuals bearing a greater responsibility for legal awareness.

Legal Knowledge as a Decision-Making Framework

A solid grasp of legal concepts provides a framework for decision-making. It informs managers of the rights and protections available to the company and its stakeholders. In today’s globalized business environment, where companies operate across borders, understanding these legal rights is essential for making informed and strategic decisions.

The Broad Impact of Legal Understanding

Photo by Iñaki del Olmo on Unsplash

Comprehending corporate, consumer, and commercial law is essential for establishing standards in product quality, safety, operational procedures, and human resources and safeguarding the rights of the company, its customers, suppliers, and workforce. It’s a strategic tool for managers that can lead to better, more informed, and ultimately more profitable business decisions. As the business world becomes increasingly complex and interconnected, the value of legal understanding only grows. For aspiring managers, embracing legal studies is not just an academic exercise; it’s an investment in their future leadership potential.

This blog post highlights the importance of legal knowledge in business management. We offer a number of 100% online programmes with a focus on business law. Take a look and see if we have anything that interests you. Please feel free to chat LIVE on WhatsApp with one of our Education Advisors for more information.

Business Ethics – 4 steps to ethical decision making

∙ By ∙ 9 Comments

Cutting corners, that is what we as human beings do. Now, that by itself is not wrong, finding a more comfortable, simpler way to get a job done is smart. But the line that separates ethical behaviour from unethical behaviour is narrow, and if you are not careful in your search for the smartest way to work, you could just end up crossing that line!

Before proceeding with the blog, I would like to wish all our readers a very merry Christmas and a happy and healthy new year 2021!

Wishing everyone a very Merry Christmas and a happy New Year

What is ethics? 

It is merely the belief of what is right or wrong based on the individuals’ morals/values, which in turn might be dependent on the society or culture to which the individual belongs to. So, what does this mean? Simply put, ethics is very individualistic; what I believe to be right or wrong might be antithetical to what you believe to be right or wrong.

Having said that, as a society of human beings living in the 21st century, we generally have a consensus on what humanity considers ethical and unethical behaviour, as a result of which, laws are created to uphold and protect what we believe is ethical behaviour. Now, some of these laws might differ from region to region; however on the whole, most laws are put in place to protect the innocent and to uphold what society considers ethical.

Laws

Formal laws typically represent a consensus on ethical standards.

For companies and organisations, the laws and standards that are used to judge the ethics of an individual can be extended on a much grander and more detailed scale thus incorporating the ethics of society on a corporate level. So, if a company is known to follow the law, by implication, it is an ethical company. But that need not always be the case.  

Yes, laws can be looked on as a standard for companies to follow; however, they are just a basis for an ethical discussion. Because at the end of the day, the legal ethics will depend on whose eyes they are viewed from. For example, while stealing is considered illegal everywhere and therefore unethical, it is unfortunate and criminal that in some countries child labour is still legal and therefore ethical (at least from their point of view), even though a majority of the nations will consider it unethical (and in my personal opinion, it is).   

Ethical decisions

There are several factors, such as values, morals, culture, etc., that can have an impact on ethical decision making. For example, if you ask a group of individuals a precise and narrow ethical question, you might get as many answers as there are individuals answering the question because each person is influenced by their upbringing and life experiences.

There are also some circumstances when an otherwise unethical behaviour may be looked upon in a favourable light. For example, a town devastated and cut off from aid by a natural disaster might force some desperate people to contemplate unethical actions like breaking in and entering an abandoned home or store to scavenge items and materials required for survival. Is this behaviour ethical or acceptable? Maybe not. But until we are put in a situation like that, who are we to judge?!

The point is when we make a decision, all we can do is to make the best decision we can at that moment.

Ethical decisions in organisations

Most organisations today have a diverse and multicultural workforce. While this is undoubtedly beneficial, there are also a number of challenges to be overcome, especially when aligning decisions with ethics.  Not everyone is going to agree with the ethicality of a decision! Also, you don’t want an organisation where everyone thinks the same – “groupthink”.

So, how do organisations work towards overcoming these challenges? 

  1. Code of conduct/ethics – Organisations need to start a ‘written code of ethics or conduct’. It has to be a written, physical document that is easily accessible, prominently displayed (on notice boards, company intranet, etc.) in the organisation, widely circulated among employees, made a part of induction for new employees, and made a condition for employment. What a code of ethics does is outline what the organisation considers acceptable behaviour, giving a baseline of what is ‘okay’ and what is ‘not okay’. 
  2. Ethics programme – Set up training programmes for employees that will educate them on what the organisation considers ethically acceptable decisions. The best way to learn is by example, so ensure that most of the training is situation-based.  Show examples of decisions made in the past, the challenges the decisions makers faced while deliberating, their logical reasoning, and finally why they arrived at the decision they did. Make it into a case study to get an understanding of what the new employees think and the decisions they would have arrived at in the current work environment.
  3. Ethics hotline – Most organisations do not want unethical behaviour to go undetected for a long period of time. The longer unethical behaviour takes to come to light the greater the damage to the organisation. Most people do not want to be labelled a ‘snitch’; it is a good way to lose the trust of co-workers and get isolated within your organisation. It could also have an effect on your reputation, which will, in turn, have an impact on your promotions and future employment. But for the benefit of the organisation, unethical behaviour needs to be brought to light, and the sooner, the better. Setting up a hotline that guarantees anonymity, and gives protection to the whistleblower against retaliation will encourage reporting against unethical behaviour. However, the organisation also has a responsibility to investigate comprehensively and arrive at an independent conclusion to not only protect against false reporting but to protect all the parties involved.
  4. Leadership by example – We throw the term ‘work culture’ around quite often.   Work culture is corporate behaviour which is set or determined at the top and trickles down to the rest of the organisation, and ethics forms an integral part of this behaviour. Most people in any position of authority usually set an example of ‘do as I say, not as I do’, which clearly send the wrong message to their underlings, and this is what usually ends up being the norm that is followed. There are very few leaders that are able to set the right, positive and ethical example because of the temptation to bend ethics in favour of greater profits. Actions speak louder than words and leaders have to set the example at the top for the organisation to follow.

These are just a few guidelines an organisation can follow to develop and encourage ethical decision making. What are the steps followed by your organisation to encourage ethical decisions? Any instances that you know of where companies have cut corners in their search for easy profit, and what were the consequences? Comment below.

Our online master’s degree management programmes help you become a better leader, and business ethics forms an important part of it. Chat LIVE on WhatsApp with one of our education advisors for more information on all the programmes we offer, the application process, and for information on discounts we might be offering at this time. 

5 key skills and attributes for effective Legal Leadership

∙ By ∙ 6 Comments

Leadership is a subjective term. We see and hear about effective leaders leading a department, a company or a country. But it is difficult to really quantify or describe what leadership is. You can recognize good leadership examples when you see them but it’s difficult to define. Some leaders are ‘born leaders’, they are a natural, and excel at what they do, while others learn to become good leaders by cultivating attributes and skills, behaviours,  or sets of competencies, that are practiced and mastered to become an effective leader. 

I have talked in the past about Sustainable Leadership in our blog – what it is, and what its principles are. There could be several styles and types of leadership, and areas where leadership is required. One such areas is law and that is called legal leadership. Legal leadership particularly identifies how leaders behave, and how they govern others directly and indirectly, by controlling organizational structures and processes in a legal department or a law firm. 

Douglas B. Richardson says, “All great leaders do five things well, Imagine, Invent, Inspire, Inform, and Influence”. Though all leadership is fundamentally the same, legal leadership can take many forms, involve distinct roles and have different objectives. In a legal department, leadership has many faces: the chief legal officer (CLO), the managing attorneys, the servicing lawyers who work each day with the clients, and all of them should be leaders. Therefore, a legal leader is faced by a unique challenge of leading leaders as more often than not they end up leading other lawyers who are independent identities, individual contributors, pretty much people who do not follow anyone, do not like to be led, trust their own gut, and do not collaborate easily.  

Phew! Legal leaders have to be one hell of a leader!! 

Being a leader in a legal environment is challenging and may not be everyone’s cup of tea. So, what is required to be an effective legal leader? Law firms and corporate legal departments have identified some basic qualities and attributes that a leader should possess. Here are the five skills and attributes that are important for effective legal leadership: 

1. Collaborative skills 

Legal leaders usually find themselves managing large teams and complex cases. They usually have different and difficult sets of people at both ends of their stick. On one end are their own team members. And at the other end are the clients from diverse backgrounds, personalities, education levels, experience levels and requirements. The legal leader plays a key role in coordinating all the aspects, and people in bringing out the desired legal outcome. 

Exercise collaboration with effective communication.

A good legal leader should hit the ground running through effective and early communication amongst the team members, and letting everyone know their tasks after a brainstorming session. Follow up and make sure to listen to their colleagues’ ideas or the issues they are facing, and help them overcome their obstacles and provide the resources if required.  

A legal professional must weigh in everything, facts of the case, potential risks and their consequences

2. Good Judgement 

Success in any profession is highly dependent on good judgement, and this is especially true for the legal profession! It is one the most critical attributes that a legal leader must possess – to apply good judgement and make sound decisions. Legal professionals are faced by situations every day where they must make complex decisions by weighing in the facts of the case, evaluating potential risks and their consequences on the case and on the firm/organization.

Good judgement also requires excellent problem-solving skills. A good legal leader must be able to pre-empt the issues, and must have ideas and many solutions to a problem.  

However, the leaders must not isolate themselves or feel solely responsible for a decision. Though they are leaders, they are still a part of the team, and must seek input of their peers and other experienced legal professionals on critical matters.  

Self-awareness is an important quality of an effective legal leader

3. Self-awareness 

While most of the legal professionals, lawyers, and para-legals would call themselves lone-wolves and individual contributors, they are still part of a legal team. As they become leaders, most lawyers face a hurdle what’s called ‘expert identity trap’.  This means they identify themselves as subject matter experts but do not necessarily see themselves as a leader. Though several attributes are required to be a good legal leader, self-awareness is one of the key qualities of an effective one.  

All legal professionals are bound by the model rules of professional conduct

4. High ethical standards 

The legal profession is heavily based on trust, and each member’s ability to demonstrate highly ethical behaviour. Failure to do so will have many adverse outcomes such as not being able to gain the trust of their client and/or colleagues, and even more critical, being disbarred or legally charged and disciplined for misconduct. All legal professionals are bound by the model rules of professional conduct and they must understand their responsibility as the stakes involved are high! 

5. Diplomacy 

Diplomacy is one of the skills that a legal leader must have to climb the ladder of their legal career. A good leader must exercise diplomacy in handling clients, project the professional image of the firm, and must be respectful of their colleagues. The legal profession is an intensive and demanding career. It is critical for leaders therefore to keep calm and show virtues such as understanding, compassion, and integrity. Diplomacy is not something that one can learn overnight, it is a gradual, self-grooming process that can be effectively used to resolve any conflicts, and manage differences and disagreements. 

To be the best legal leader, it takes lot more than just being book-smart too; one needs to be street smart. Our 100% online master’s degree programme prepares you just for that by providing a deep understanding of the key concepts and theories of leadership and their application in a law-oriented organization. Talk to our advisors today to learn more about the programme. 

Corporate governance practices are important for companies. Here are 5 reasons why!

∙ By ∙ 3 Comments

Let me start with the basics.. 

What is corporate governance? Well, corporate governance can simply be defined as the systems by which companies are defined, directed and controlled. As the name suggests, it is the practice that governs the corporates to comply with legal, regulatory and risk requirements and meet the business demands. And it is mainly the responsibility of the Board of directors. It is important that the board takes on board (pun intended) the intertwined roles, relationships, and interests of the company’s various stakeholders.

A corporate has both internal and external stakeholders. The internal stakeholders include the company owners, management, executives, board of directors, shareholders, and employees. And the external governance stakeholders include the society and community, customers, suppliers, vendors, and debt holders.  
 

Because the corporates ( with the exception of s non-profit organizations) operate for profit, one of the main focus areas of corporate governance is to make the business leaders manage the finances in the most effective way, and in the best interest of their internal and external stakeholders. There are several laws and external regulations that monitor this aspect of corporate governance. However, many companies establish their own internal framework and regulations to ensure smooth and ethical operations of the organisation. 

Regardless of how big or small a company, it is important to have an established set of practices that dictates good corporate governance. It also looks good on the part of the company that their finances are well accounted for, and they have done some good deeds for society.

Now many argue that corporate governance does not affect the bottom line of the business and is not ‘necessary’ for running the business, as it does not affect the operational or financial performance of the company. It is difficult to put together and implement a customised corporate governance plan. The additional practices cost a lot of money and time going through the administrative procedures of organization’s bureaucracy.  

The other side of these arguments, however, stresses the importance of corporate governance practices and the impact they have on the successful running of a business in the long term.  

How corporate governance benefits a company 

Corporate governance is the foundational stone of any good business. There is a direct correlation between good corporate governance and enhanced shareholder value in the long term. It is an important tool in managing the business in an ethical way, and leading to its growth.  

Some of the key benefits of good corporate governance are as follows:

1. Power packed board of directors 

        As I mentioned above, the board of directors are responsible to oversee how the corporation runs. Good corporate governance focuses on establishing a strong board for the company, comprising of directors who are knowledgeable, competent, qualified, matter-expert and who hold strong ethical values. The board will then be able to provide strong and dedicated leadership, and vision to the company.  
 

Corporate Governance ensures the corporation has a strong Board of directors

2. Promoting ethical culture and corporate integrity 

     Good corporate governance practices lay much emphasis on integrity in all business dealings and ensuring the company is socially responsible. They ensure compliance with the law, and an ethical business code of conduct.  

3. Enhanced public image 

     In todays competitive business environment, having good corporate governance can prove to  be a differentiating factor working in favor of the company. Being socially responsible, contributing towards the environment, implementing sustainable practices, and other societal benefits, paints a good image for the company and builds confidence for both the internal and external stakeholders of the company.  

4. Boosts new investment 

     The venture capitalists and investors feel more confident in investing in a company with good corporate governance practices. They ensure good return on investment for the investor. Increased investments mean expansion of business, and create more employment opportunities.  

5. Effective risk management 

     A board of directors with a strategic vision is imperative in identifying potential risks faced by the company, such as industry specific risks, global markets, operational, legal, and financial risks. By evaluating risks, and implementing timely plans, good corporate governance practices can help mitigate risks for the company. 

RKC boasts a strong portfolio of online master’s programmes, offering online MBA, MSc and LL.M programmes. The students have a wide range of 18 MSc, 23 MBA and 3 LL.M programmes.

You can chat LIVE on WhatsApp with one of our Education Advisors for more information on the programme, the application process, and for information on discounts we might be offering at this time.