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Company Background

Riordan is an industry beater in the supply of plastic equipment. Quality is a hallmark of this company that has worldwide acclaim for its products. The company makes sure that its goods have a high level of precision. The company has many branches worldwide. This has enabled it to have an extensive pool of customers that includes beverage manufacturers, aircraft manufacturers and the department of defense. Its headquarters are at San Jose, where all its research activities take place.

Purpose

As it is indicated above, the customers of Riordan companies are high-end customers. The projects of these customers involve large sums of money. It is vital for Riordan companies to avoid litigation from these customers in case they supply low quality goods. The company has a commitment of observing a high degree of ethical, legal and moral standards. The management should lead the employees in showing their commitment to the community. It is achieved by observing a strict adherence to rules.

Compliance is defined as keeping or observing the set standards within and outside the organization. The management of this company has made a plan to shift its china operations for strategic purposes. This shift in operations has some legal ramifications that the management should understand. This paper summarizes the legal environment this company faces due to the change. This is in reference to its liability, international law and overall risk governance (Baihaki, 2009).

Legal Environment

Because of the shift in operations, many employees are likely to lose their jobs. Some of these employees will sue the company for early employment termination. The company should seek the best possible legal assistance to appease the employees. The company is a manufacturing company, meaning that accidents are likely to happen during its daily operations. Injured employees are entitled to a huge compensation. In case these employees ask for the compensation, it is advisable for the management to seek legal counsel.

In other situations, its customers may sue the company. This happens in case it supplies substandard or faulty goods. In such a scenario, the company should also seek legal counsel. The fact that the company is shifting its operations internationally means it has to observe international business laws. The movement may force the company to move its labor force. In such a case, the company should be aware of the taxation regulations in both countries. The movement will drain China sufficient source of taxation income, while at the same time benefiting the mother country. Moving employees should move with the right documentation, at the advice of a legal counsel (Baihaki, 2009).

Enterprise Liability

If any other organizations share the enterprise, the organization is jointly liable for the workers’ compensation. The company is jointly liable according to enterprise liability doctrines.

Governance Principles of Regulatory Compliance Requirements

In order for the company to shift China operations, the organization must adhere to certain federal government regulations. The regulations are the compliance requirements. One of the compliance requirements is the equal distribution of the organization’s real and intellectual property. All the plays should be satisfied with the organization’s decisions.

Risk Management

Committee of Sponsoring Organizations of the Treadway Commission (COSO) gives some guidelines on risk management. The organization has an outline of eight maxims. The management should understand its internal environment and set its objectives. Next, the company should align its objectives with the risks it faces. Riordan should identify events that affect the achievement of its objectives. Then the company does a risk assessment and determines how to manage the risks. The management then comes up with a way of responding to the risk in line with the company’s risk tolerance. Taking of a corrective action follows. While all this is happening, passing, communication of information should be up to scratch. The final step involves monitoring of the company’s risk management program.

Conclusion

Companies face many threats from within and from without. The management should be prepared to handle the legal ramifications of all its actions by seeking legal counsel. The company should avoid expensive litigations at all cost. Risk management is necessary for all companies including Riordan. The success of the risk management process largely determines the company’s success.

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