organizational laws

organizational laws

Laws that Govern Organizations to be Sustainable


In most cases, sustainability of organizations is commonly misunderstood by most individuals and groups to mean financial sustainability. The misconception usually arises because when a firm becomes unsustainable, the symptoms or effects of the problem mainly show in the finances of the organization. However, the concept of organizational sustainability or the survival of an organization depends on various issues and concerns apart from managing the finances of the company or organization. There are various dynamic and complex dimensions that an organization should ensure their sustainability for the survival and well-being of the firm. Furthermore, in an organization, there are the major dimensions that if well managed can contribute to the success or sustainability of the organization. Buchanan, Fitzgerald, and Ketley (2007) postulate that adherence to the organizational laws contributes greatly in ensuring the survival of an organization. The law enhances well caring of the human resource in an organization and the sustainability of all the operations that are carried out in the organization. The aim of this study is to focus on various laws that can contribute to the well-being or sustainability of organizations.

Laws governing organizational sustainability

There are various organizational laws that if well adhered to contribute directly or indirectly to the survival of an organization. According to Dunphy, Griffiths, and Benn (2007), most organizations across the globe fail to adhere to some of the laws and have been the major cause for the failure of most companies. An organization should take compliance to the laws governing its operation seriously. In addition, it is essential to continuously investigate the laws that an organization is expected to comply with and revisiting its operational controls with an aim of ensuring sustainability in the operation and well-being of the firm. The code of conduct of business should be involved in setting expectations and target that all the workforce in that organization are expected to follow and the rules that govern the behavior of the company. Pascale, Millemann and Gioja (2000) perceptively state that compliance with the set law, rules, and regulations by an organization has been a major contributor in the survival of most companies. In Australia, nestle company has been working to ensure the compliance with the laws by its workforce and has played a major role in ensuring its sustainability.

Nestle company in Australia enhance communication among employees where in the case of the business code of conduct the employees report the information up to the senior management of the organization and shared with directors and executive committee as need be. This has contributed to the success of the organization in comparison to other companies operating in the same industry. Turning to the work of Buchanan et al., (2007), it is clear that most breaches that affect the sustainability of an organization are commonly subject to legal, confidentiality, privacy and other restrictions. The organizations should ensure that criteria of public disclosure are met that help in facilitating the claims of product liability and lawsuits covering safety and health care of customers and the fines and corrective actions taken in case of failure of compliance with the laws.

Competition and antitrust laws

For an organization to be sustainable, it must ensure that competition and antitrust laws are complied with by the employees from all the departments. According to Pascale et al., (2000), it is important for the employees of a given organization to comply with all rules of operation in the home country and the foreign countries where the organization operate to ensure support and protection by the local government or industry. Protection of an organization facilitates its survival. Most Australian organizations have been surviving in the industry and market as a result of their management team that has been actively involved in making sure that the employees comply with competition and antitrust laws in the regions where the companies operate. For example, Nestle Company have been involved in ensuring that its workers comply with the competition and antitrust laws of every state that the company operates in. Dunphy et al., (2007) state that employees may fail to engage in the anti-competitive conducts or fail to be given permission to take unfair disadvantage over the buyers or customers, competitors, suppliers and distributors through concealment, manipulation, misrepresentation of facts among other unfair dealings. Compliance with these laws has a great impact on the operation and sustainability of organizations across the world (Pascale et al., 2000).

Environmental regulations and laws

Research by Peppers and Rogers (2008) show that the survival of an organization is influenced by its ability to understand and comply with the environmental laws and regulations in the industry or country of operation. Nestle company as an example is committed to conducting its business in a manner that is environmentally sound. In addition to conducting its wide range of business because the company has been dealing with a range of products, the organization is active in initiating all its workforce in all the outlets to be well aware or equipped with knowledge concerning environmental regulations and laws that are relevant to the employment of people in the organization, responsibilities and compliance with the established laws. Wood (2014) states that awareness and compliance with the environmental laws and regulations contribute positively to the sustainability and well-being of the organization.

Compliance with the health law

An organization should ensure compliance with the laws that concern the health aspects of the company and the customers (Dunphy, 2007). It is essential to ensure approval of the organization by the health department of a state in order to ensure that the company or organization is living according to standards set. The organization should ensure that the suppliers of its raw materials are also involved in complying with the healthy issues in supplying the products. Health is detrimental to the survival of an organization. The managing director of nestle company, for example, argues that there is no aspect of the organization is highly subject to the regulation of the government than the manufacturers, approval, development and marketing and selling of healthy and safe products. The organization ensures that all the employees are aware of the health issues and adhere to them in their operation. Research by Peppers and Rogers (2008) indicate that legal necessities concerning compliance to health care are contained in the integrity guide and the availability of the guide among the employees help them in maintaining healthy concerns of an organization and therefore contributing to the sustainability of the organization. Failure to adhere to the health laws can be a major contributor to the down falling of an organization. Dealing with corruption also contributes to the sustainability of an organization. Orocobre Company in Australia has been operating through certification given by the senior management in adherence to the anticorruption procedures and policies of the company.

Labor and employment law  

Dunphy et al., (2007) record that any organization should be highly involved in caring for its employees. The organization should comply with the policies and applicable laws and regulations including the ones that concern the working hours, human rights, compensation, opportunity and the conditions in the working areas (Peppers & Rogers, 2008). Failure to comply with the employment and labor laws can have adverse effects on the sustainability of the organization because the employees can end up losing their attitude toward the firm as a result of poor motivations. BlueScope Company in Australia has been surviving in the industry by ensuring or prohibiting exploitation, harassment, and discrimination of employees because of either race, disability, sexual orientation among others. Compliance with the law motivates the employees who work to ensure the success and survival of the organization.

Security laws

Wood (2014) records that security laws play a great role in ensuring the survival of organizations. Compliance with the security laws of a country by a company helps in attaining the goals and objectives of the firm with ease and therefore enhancing the success in comparison to other firms in the industry. Nestle company in Australia is often required by the security of the state to give to the citizens of the country the necessary information that concerns the organization. The disclosures and the public communications should be accurate, full, fair, understandable, accurate and timely. An employee of an organization who knows information that has not been disclosed to others should keep it confidential.

Respect for confidential information and trade secrets

The sustainability of an organization also depends on the ability of the company to respect and comply with the secrets of the trade and the proprietary information by other people. Peppers and Rogers (2008) postulate that though organizations consider the information gathered from the public as a legitimate source, of information, a trade secret that can be gathered from improper or illegal means is not. Nestle company has a hotline that is used by the workers from all the outlets of the organization that they can access through phones or by use of online means. The non-employees, vendors, and customers of the company can also access the hotline of the organization. The application of confidential hotlines by organizations have been important in ensuring that information and the reports of the company are only accessible to specific people who the company recognizes. Respect or compliance to the secrets of the trade and information confidentiality contributes directly to the sustainability of organizations in their industries of operation (Dunphy et al., 2007).

Anti-corruption law

For the well-being of organizations, the firms should ensure compliance with the state laws of different countries that they operate in. The laws include anti-bribery regulation and laws.


The sustainability of organization in an economy is influenced by various factors. Different dynamics contribute directly or indirectly to the survival or failure of an organization. Compliance with various organizational laws includes employment laws and safety laws and regulations contribute to the sustainability of the firms. The organizations should be actively involved in training their employees on the laws governing their operations to facilitate their compliance and therefore the success of the companies.  In addition, the organization should show particular concerns to the needs of various stakeholders including their employees because the stakeholders can contribute to the success or failure of the company. Furthermore, compliance with state laws provides protection of organizations in the industry and market and therefore contributing to their survival.


Buchanan, D. A., Fitzgerald, L., & Ketley, D. (2007). The sustainability and spread of organizational change: Modernizing healthcare. London: Routledge.

Dunphy, D. C., Griffiths, A., & Benn, S. (2007). Organizational change for corporate sustainability: A guide for leaders and change agents of the future. London: Routledge.

Pascale, R. T., Millemann, M., & Gioja, L. (2000). Surfing the edge of chaos: The laws of nature and the new laws of business. New York: Crown Business.

Peppers, D., & Rogers, M. (2008). Rules to break and laws to follow: How your business can beat the crisis of short-termism. Hoboken, NJ: John Wiley & Sons.

Wood, J. D. (2014). Role of legal compliance in sustainable supply chains, operations, and marketing.


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