The Ethics of Compliance Management and How it Works
Compliance is an essential tool of management in any given organization. Early in the 1990’s, the thriving economy of Japan went in to a recession and this influenced many in Japan. This terrible blow affected Japanese organizations and companies in key industries such as the food, finance, and nuclear power industries. These organizations did however brace themselves for the hard fall and used phrases like "social responsibility", "business ethics" and "compliance" to help deal with such arising situations.
What is Compliance?
When Japanese people first heard the word "compliance", the following phrases came to mind, "following related rules and regulations" and "compliance with the rules". However, with time the phrase compliance has come to mean many things. While rules and regulations still define compliance, issues like what strata of society, good sense and, above all, the intention behind the rule are also included as part and parcel of the definition. It is perceived as the reacting or rather responding to social needs.
Reasons for Increased Demand in Compliance, Management, Ethics
Regulations pertaining to government enterprises have been amended immensely following the decisions made in the 2000’s outline of administrative reform. The degree of freedom for competition has been raised to a higher level and severe punishment has been laid down for trouble makers. Companies are required to be responsible and liable for their actions and it is compulsory for them to provide information to the public.
There is a state of inequality in the laws of supply and demand. Due to changing customer needs and preferences, one realizes there is always an excess supply in the market. The same concept of customer preference applies to organizations, and if customers do not prefer the organization then its existence is at stake. In these times of business, customers use different methods and criteria to select what they want. Companies should realize that for them to gain customer loyalty, they have to come up with perfect product brands and value that will attract and catch the eye of the consumer.
It is important that companies consider utmost disclosure of vital procedures and information required by customers. For instance, in Japan, traditional restaurants risk to lose customers and consequently fall out of business if they lie about their ingredients and procedures. In the event where the head office of a restaurant chain is found to be deceptive it is likely to cause a boycott that will incur large losses for the business. However, non-disclosure of vital information does not impact the consumer, quality or customer service; instead, it is an indication of the betrayal of customer trust.
Compliance, Management, and Ethics Measures Attract Organizations
Measures of compliance, management, and ethics have become important not only to the food industry but to organizations in all industries. These measures ensure an organization’s continued existence in the industry. Following compliance measures to the letter ensures that organizations will attract investors and customers to their business. This will help to create a large customer base and increase the amount of investment in the organization, which will help secure their brand image and the company’s value.
Additionally, organizations will attract excellent and talented minds that will bring innovation and creativity to the organization. These creative minds will be agents of change and this helps to develop a range of perfect products and services that are unique. All in all, compliance is a tool for innovation and risk reduction that helps increase the value of the organization.
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