Corporate Regulations a Legal Study

Corporate Regulations: A Legal Study

The retail industry like other industries is interconnected through the distribution of consumer products. Granted, distribution is an industry in and of itself, as are consumer products, but for the sake of this report I will keep all three as one, with focus on each area. Stakeholders exist in each of these areas, both external and internal; this report will look at the impacts on stockholders and ask three questions. How does the safety environment impact these stakeholders? How does deceptive advertising affect the stakeholders? And How do unethical accounting practices affect stakeholders?

First we will distinguish an internal stakeholder from an external stakeholder. External stakeholders typically are customers, however one could include any person or entity that is not directly involved with the business and that really has no say in the matter of what happens, with the exception of legal actions. Internal stakeholders include employees, but should not be limited to them, as owners and stockholders are stakeholders as are companies that rely on the said business for their survival.

The retail industry is interesting because the system is rather complex. Wal-Mart is a huge retailer, and their distribution system is highly organized to meet constant supply and demand needs. Within this Wal-Mart must ensure that both the distribution and products are safe as are all the stakeholders.

Occupational Safety and Health Administration (OSHA) is a federal administration that oversees the safety of all employees. "Under the OSH Act, employers are responsible for providing a safe and healthful workplace. OSHA's mission is to assure safe and healthful workplaces by setting and enforcing standards, and by providing training, outreach, education and assistance. Employers must comply with all applicable OSHA standards. Employers must also comply with the General Duty Clause of the OSH Act, which requires employers to keep their workplace free of serious recognized hazards." (OSHA, 2012) Basically this gives employers some lee-way to perform the functions of their business while maintaining the safety of their employees. But how much lee-way? First we will look at some stakeholders. Clearly, employees need to have a work space that is free of possible hazards, anywhere from messy floors with trip hazards or being asked to lift heavy packages beyond a certain weight limit. In the retail environment ladders are often used and it is to be expected that an employer should not have employees doing anything on a ladder that could have them get hurt, ie fall off. These are just two examples out of hundreds of rules that employers must abide by. The impacts of not doing so, are fines and shut downs. How do these rules apply to external stakeholders?

The cost of a product, beyond the purchase cost includes many things, such as administration fees. If a business sold widgets for $1.00 above the cost paid, and 1 million were sold, then we would theoretically have $1million in profit, but once we start to pick off the indirect costs, like rent, energy,