CORPORATE LEGAL STRATEGY: THE ESSENCE, TYPES, AND PECULIARITIES OF IMPLEMENTATION
Journal Title: Економічна теорія та право - Year 2019, Vol 1, Issue 36
Abstract
Problem setting. Development of the contemporary business occurs in the sufficiently dynamic legal environment. Legal illiteracy of managers or candid neglecting legislation becomes one of reasons for bankruptcies of business entities. Under such conditions, forming legal strategies for business entities and applying juridical resources of firms for creating competitive advantages are of great importance. Recent research and publication analysis. An issue concerned with growing of importance of law in contemporary management is mostly examined by foreign scientists. The main directions of their research are as follows: a) developing a conception of proactive law (G. Siedel, Н. Haapio); b) substantiating the necessity for development of special legal strategies for business entities, analysing their role in enhancing competitiveness of the business (A. Masson and M. J. Shariff, H. Bouthinon-Dumas, G. Siedel, R. C. Bird, and С. Roquilly); c) determining peculiarities of the interaction between managers and lawyers at a firm (C. E. Bagley, G. Siedel, D. W. Savage, R. C. Bird, P. Borochin, and J. Knopf). Paper objective. The article objective is to disclose the essence of a conception of finding a right legal strategy for the business and to analyse opportunities for its practical implementation in Ukraine. Paper main body. Developing corporate legal strategies is the most important component of contemporary legal management of business entities. A corporate legal strategy leans on prospective prognostication and planning, revealing long-term trends of development of an entity, awareness of goals and objectives, opportunities and restrictions of activity. In the practical context, it is an algorithm for making legally significant decisions at each level of development of a firm basing on determining prospects of licit earning income and mechanisms for protecting the business in case of emergence of: а) economic (entrepreneurial) risks and their possible legal implications; b) legal risks and their possible economic implications. The article analyses scientific approaches of scientists to determining the essence and systematization of legal risks of business entities. Foreign researchers such as R. C. Bird and D. Orozco argue that business entities tend to use one of the five legal strategies: a) avoiding or neglecting law; b) adhering to law; c) averting or preventing violations; d) the growth of importance and value of the business and e) transformation. Using an example of adhering to norms of labour law, particularly legalization of employment, the author analyses reasons for choosing and undertaking each of legal strategies in Ukraine. The author points out that a majority of Ukrainian firms operate within a paradigm of managing risks, namely the strategies of adhering law and prevention. Simultaneously, the author takes into consideration transaction costs of adherence or non-adherence to norms of legislation being called the «price obeying the law» and «price of illegality» by H. de Soto. To avert emergence of particular legal risks and to minimize or overcome their implications, Ukrainian firms begins to apply special tools for implementing a legal strategy, particularly due diligence, compliance, and forensic. The strategy of the growth of importance and value of the business, as well as the strategy of transformation means that firms actively use law for development of a business. Foreign firms create a position of a chief legal strategist while a corporate legal strategy integrates into a business model and business ecosystem of a firm. Practices of investor relations and government relations are the main instruments for implementing such strategies. Conclusion of the research. Choosing and undertaking an effective corporate legal strategy is a component of contemporary strategic legal management. Development of such strategy requires analysing internal and external factors of influence, needs essential resources, appropriate knowledge and managerial experience, and, in many cases, consultancy of specialists. Short Abstract for an article Abstract. The author generalizes scientific approaches of foreign scientists to the content of proactive law, developing and implementing corporate legal strategies. The author has analysed the main types of legal strategies. The author has paid special attention to problems of implementing corporate legal strategies in Ukraine and substantiating effective instruments for undertaking these strategies. The author has proven that a majority of Ukrainian business entities orient towards managerial risks in their activities. However, more and more firms transit to a model of managing development.
Authors and Affiliations
Людмила Степанівна Шевченко
Keywords
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- EP ID EP574735
- DOI 10.31359/2411-5584-2019-36-1-104
- Views 99
- Downloads 0
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