As it is important for IBM Canada, to: identify different types of legal liabilities and their possible consequences on a regular basis. Some of the main legal risks being faced by the company include: employee lawsuits, cyber issues, product liability, patent / licensing and criminal investigations / compliance.
An employee lawsuit is a legal issue of paramount importance for IBM Canada. Discontent employees can file a claim against the company for: sex / age discrimination, pregnancy, race, gender, disability, wrongful termination and other injuries. Matters related to salary deductions, payments, and other dues; if not properly dealt with, can also bring litigation for the company.
The operation of IBM Canada mostly includes the use of: technology, internet communications and resources. As cyber legal issues pose a significant threat for the company. The instances of data theft due to: unauthorized access and hacking can bring huge financial penalties for the company.
Product Liability Issues
Liability issues are arising from any damage occurring to: a client or customer (due to a software / hardware product issue). If any software is released that results in loss of: data or damage to the hardware. This can invite heavy penalties and sanctions for the company. Similarly, a faulty hardware component that causes any financial loss or other problems to the customer can bring a financial penalty to IBM. As any delay in the delivery of a hardware or software product, can result in financial loss to the clients of IBM Canada. (Marjorie, 2011)
Patent and Licensing Issues
Use of third-party software and patents of new products is a significant legal issue for the company. Any violation of license agreements or copyrights can result in huge financial penalties for IBM.
Criminal Investigation and Compliance Default Risk
There are numerous law enforcement agencies and departments that regulate the it industry. As a result, there might be incidents when the company or its executives are targeted for: investigation and prosecution after bogus complaints. There might also be cases of negligence from: a department or a specific provision of law. Non-compliance to guidelines of regulating authorities can bring: criminal liabilities or legal action against the company. ("Corporate Legal Risk - Management and Mitigation,"2007)
Step 2: Evaluating the Legal Risks for IBM Canada
When we evaluate the legal risks for IBM Canada, we can categorize them into different groups depending on their severity such as: critical risks, important risks and least important risks. All these events that may cause heavy financial losses to a company and can be brought under critical risks. These may include: product liability and cyber risks. Similarly, other liabilities can be categorized into different areas based on their severity.
Step 3: Devising a Risk Management Plan
IBM Canada can manage employee litigation risks by: implementing clear and detailed employee policies in the workplace. These can serve as the first line of defense, against the threats of employee lawsuits. Developing an employee manual would help greatly in this matter. as, all managers can be given instructions to treat subordinates with respect and equality. To militate against these possible risks, an employment lawyer can be consulted regularly to: review the policies and bring about necessary changes in it.
IBM Canada can deal with cyber issues and risk by implementing explicit policies related to computer usage of the employees as well as access. The policies can be reviewed and revised from time to time when required.
They can deal with the product liability issues, with the help of an end-user licensing agreement. Individuals will need to accept the agreement before installing any piece of software on their computer. The legal viability of these agreements may be questioned sometimes, however, there are numerous instances when courts upheld the terms of them. IBM Canada can also minimize the product liability risks by outsourcing the work (i.e. computer parts / manufacturing) to subcontractors. The risks associated with the performance or functioning of final products can be moved to subcontractors. A subcontractor can be made legally responsible to any loss due to errors and defects in the final product or a specific part. For timely delivery of the products, project timelines need to be planned and implemented in an effective manner. Patent and licensing issues can be dealt with, by ensuring that the technical teams do not infringe on any patents during development work of software or hardware.
IBM Canada can deal with criminal investigations and non-compliance risks by: adopting the policy to cooperate with all government agencies. This would help to insulate the company and the employees, from any risks in cases arising from a violation of various regulations. (Marjorie, 2011)
Step 4: Implementing the Plan
IBM Canada needs to implement the risk management plan at all levels of the organization to minimize these effects. Educating and training its employees about the procedures would help greatly in reducing the risk. as, a system can be devised to: deal with these issues. For legal compliance situations, an auditing team can be created that would help in ensuring that legal challenges are met by different departments of the company. It would also help in taking corrective measures for non-compliance to: rules and policies (by any department). For timely delivery of software or hardware products, project timelines should be planned and implemented by the managers, so that they are provided to the clients before the deadlines.
Identify the key legal issues faced by your organization. Explain how your organization can use the law for its benefit.
Like what was stated previously, the biggest risks facing IBM Canada include: employee lawsuits, cyber issues, product liability, patent / licensing and criminal investigation / compliance. These are important, because they are showing how the company is facing a variety of liabilities as part of their daily activities. The law can help to provide a foundation, for addressing these risks. In this case, it can be used as a way to create the basic provisions that: employees and staff members will follow. As the company can use the law to establish procedures for: dealing with a host of challenges. At which point, these standards can be improved upon, to provide even more protection against these kinds of risks. This is important, because it shows how the law can help IBM Canada to mitigate liabilities, by establishing a basic foundation for addressing these issues. Over the course of time, this means that the company can effectively adapt to the challenges that it is facing from the increased amount of risk. This is when the overall liabilities and potential claims will decline.
Clearly, IBM Canada is facing a number of possible risks to include: employee lawsuits, cyber issues, product liability, patent / licensing and criminal investigation / compliance. These different elements are important, because they are highlighting the overall challenges that they are constantly facing. As the shifts in the economy, changes in the law and new criminal techniques are having an impact upon the overall challenges they are wrestling with. Once this occurs, it means that the overall liabilities will continue to increase dramatically.
At the same time, the liabilities that company is dealing with are evolving. A few of the most notable include: injuries from an employee of IBM Canada, injuries to non-employees, product liability issues, a delay in the different products / services and data theft. This is significant, because it shows how these challenges are constantly shifting. As a result, managers need to be able to understand these risks and how they could affect the overall bottom line of the company.
One strategy that could be used to possibly mitigate these different challenges is: to utilize the law as a legal standard that the company can embrace. This is important, because establishing these basic provisions will ensure that all employees are following the best strategies to mitigate these effects. Once this occurs, it means that IBM can begin augmenting their different policies and procedures to go above what these requirements are. Over the course of time, these standards will reduce the possibility that the company could be exposed to litigation from these issues. As this strategy will help to prevent this from occurring, while giving managers an effective tool they can embrace to limit these risks. This increases productivity and it reduces the overall challenges that the company is facing. At which point, the overall liabilities will begin to significantly decline.
Alternate Service Delivery (2006). (ASD) Project Summary. Retrieved from: http://www.lcs.gov.bc.ca/asd/docs/PCHS_Project_Summary.pdf
Marjorie J. (2011). Business Law Savvy - Protect Your Company From 5 Common Legal Risks. Ezine Articles. Retrieved from: http://ezinearticles.com/?Business-Law-Savvy-Protect-Your-Company-From-5-Common-Legal-Risks&id=1671674