Meeting the requirements of regulatory agencies is no small task, particularly within the pharmaceutical, agricultural, financial, and utility-based industries. Ultimately, there is a tradeoff in the actions taken in regards to regulatory agencies: either be highly compliant, leading to great inefficiencies in operation or be less compliant and risk not only violating regulations but also making the company susceptible to lawsuits as a result of being out of compliance. Thus, the central challenge for firms concerning regulation consists of two components: firstly, it is of the utmost importance that a firm is able to correctly identify the full extent of the risk to which the company will be subjected if they choose to be non-compliant. Then subsequently, the company will be able to accurately identify the optimum balance of regulation versus efficiency.
SPECIFIC ISSUES AND KNOWLEDGE NEEDED TO MAKE DECISIONS
- Agency regulations can differ across various global regions, which creates particular challenges for international firms that must be compliant in multiple areas.
- What are the various possibilities through which to assess possible risk?
- Will regulatory decisions influence our strategic position? If so, what are the benefits, and what are the drawbacks?
- What impact will changes in regulatory decisions have upon the organization as a whole?