Changes in law happen often and, therefore, this means that the business environment is ever changing.
Inasmuch as many businesses may not appreciate it, changes in the law are an opportunity for a business to expand.
I would apply Darwin’s theory of survival for the fittest in the business environment. That is, enterprises should learn to adapt to changes in the law for growth but if they do not then they may eventually fizzle out.
While not every legislation may bring about a very drastic change in the life of a business, the pace at which it adjusts to external changes in law may be a vital strategy to adopt.
Today, I want to analyse how a business can adapt to external changes in law and achieve a competitive advantage over rivals that have not yet made these adjustments.
Supposing there is a material change in the legislation, for example, a new law is made or an existing law is scrapped out, how does your business adjust?
First, analyse if this law affects any part of your business for not every change may be relevant to your company or strategy. Such that a change in law for a sector you are not in, will not affect your business.
However, some do affect your business, for example, the Companies Act, 2015 which changed corporate governance for companies in Kenya.
If the change in law is deemed to affect your business, then a proper assessment will need to be done, with the help of a lawyer where necessary. Many businesses have in-house lawyers who are able to do this.
For those without, expert advice may be necessary to understand the impact of the law.
You will need to involve the relevant stakeholders when assessing the impact, for example, if it is a change in the labour laws, then your human resource department should be involved.
Businesses should adopt legal changes through policy formulation, that is, through use of organisational policies or amendments to existing ones as the case may be.
Such that, a significant change in labour laws would result in a change of the human resource policy.
Another important step to take is to have the new legislative change embraced in the organisational culture. The top management should embrace the change and encourage staff to do the same. If need be, staff can be trained on the new changes.
However, many businesses do not take advantage of changes in the law, yet they can create opportunities for growth.