Question

What is the importance of understanding law to a business today?

Please answer the above question, it needs to be between 100 and 200 words max.

Answer 1

The rule of law to a business is important because it gives everyone a framework for how to act and operate. Law holds people, businesses and governments are accountable for their actions. Without predictable rules and patterns to follow, doing business would be chaos. You would never know how other parties would act in any given situation and it would be easy to taken advantage of. The rule of law provides much-needed stability and consistency. With the guidelines for universal acceptable behavior, it’s a lot easier to ensure that organizations act predictably and responsibly.

For example, suppose we want to open a shoe factory. We need to buy a piece of property and build a factory, which will be very expensive. Without established, the property laws that ensure that we are the legal owner of the land, we would be very reluctant to build the factory. There would always be some risk that someone else would come along and claim our property and factory as their own.

A better understanding of legal matters also provides the manager with the framework on which a decision can be made. Knowing the rights and the protection of the law can give vital managerial information to both an individual and a company. In today’s borderless business environment, the organization’s rights to its employees, clients, government, etc., will go a long way to making better, more informed, and profitable business decisions.