Introduction
Legal knowledge, especially company law and its integration into specialization areas such as procurement and supply chain management, is crucial in today’s business. The interlocking of Company Law and Procurement and Supply Chain Management (PSCM) is convoluted, owing to the diverse role that legal frameworks play in moulding various business operations. This essay explores Company Law’s relevance and sometimes perceived irrelevance in PSCM, emphasizing its effect via practical illustration.
Procurement and supply chain management best practices; the essence of company law.
The integration of Company Law in PSCM is pivotal. It provides a regulatory support system for due process in transactions, agreements and relationships. Company Law intersects with PSCM in numerous areas, and one key area is contract formation and enforcement. The legal structure provides grounds for developing enforceable laws that are helpful in procurement contracts (Gatari et al., 2022). Additionally, it specifies parties’ entitlements and responsibilities and facilitates equitable transactions with proper ethical practices. The other important element is the place of Company Law in mergers and acquisitions that are common within the supply chain sector. The company consolidations are all geared towards meeting statutory provisions to pander to stakeholders’ interests.
Procurement and Supply Chain Management is the field in Company law that deals with companies’ formation, operation, and dissolution. Procedurally, procurement is the securing of goods and services from external sources. At the same time, supply chain management involves materials, information and finances even as they pass from supplier to manufacturer to wholesaler retailer, and finally, to the consumer.
- Contract Management and Negotiations: Contracts constitute the foundation of procurement and supply chain activities. These contracts are dictated and overseen within the confines of company law. Procurement professionals must understand contract legal issues, such as liability, breach and remedies. Such understanding helps get better terms, restrictions and observance of such legal standards.
- Risk Management: Company law helps identify and control risks associated with procurement and supply chain-related obligations. For instance, understanding legal issues regarding mergers and acquisitions allows supply chain managers to anticipate and plan for a disruption in their supply chains.
- Regulatory Compliance: Rules and regulations of various third-party countries govern procurement and supply chain operations, which are often international. These regulations, including anti-corruption, import-export, and environmental laws, are cited in company law.
- Corporate Governance and Ethics: Procurement and supply chain managers have to follow governance structures and ethical regulations set in company law. This involves comprehending the fiduciary role of directors and officers and transparent and ethical procurement practices.
Perceived irrelevance of company law in PSCM.
However, in some cases, PSCM professionals may find Company Law not pertinent to their needs despite its significance. This perception is common when the law lacks connection with the supply chain operation, which is practical and dynamic. For instance, concern for certain logistical issues or efficient operations in the supply chain may need to be more straightforwardly addressed by Company Law (Tiedemann, 2020). This can leave PSCM practitioners needing help understanding the law and its operation in day-to-day operations disconnected from its applicability.
Introduction to Company Law Negotiations and Examples
- Contract Negotiations and Dispute Resolution: Company Law plays a critical role as it forms the basis of effective contract management, which is an integral part of PSCM. The legal structure also provides for the settlement of disputes and compensation if a supplier does not deliver goods as agreed; this is an example.
- Compliance and Ethical Standards: Company Law significantly provides the legal and ethical obligations in the suppensuresmakes certain that the procurement practices fit into legislation to avoid such ding threats as fraud and corruption.
Conclusion
Company Law is, therefore, an essential part of PSCM and grounds it on its legal basis. Its effects at specific practical dimensions may appear narrow, but it serves to direct and govern business practice in both explicit and implicit ways. Professionals in PSCM can ensure these through understanding and applying the principles of Company Law.
References
Gatari, C. N., Shale, N. I., & Osoro, A. O. (2022). Procurement Contract Management and Sustainable Performance of State Corporations in Kenya. International Journal of Supply Chain and Logistics, 6(2), 25-37. https://www.carijournals.org/journals/index.php/IJSCL/article/download/1073/1294
Tiedemann, F. (2020). Demand-driven supply chain operations management strategies–a literature review and conceptual model. Production & Manufacturing Research, 8(1), 427-485. https://www.tandfonline.com/doi/full/10.1080/21693277.2020.1856012
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