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Considering how extensive they are, it’s difficult to know the ins and outs of all the laws pertaining to managing and operating a business.

However, effective and well-planned legal strategies are the key to maximizing success in the corporate world. The law can often be limiting and restrictive, but when used to one’s advantage, it’s incredibly rewarding.

It’s not enough to treat local and international legal policies as mere parameters within which business is conducted. These days, law firms are facing intense competition as corporations invest in internal legal teams and strategists. These experts are hired by companies who are looking to seize and maintain a long-term competitive advantage.

According to researchers, there are five legal pathways that companies can take when it comes to shaping their policies. They are:

(1) avoidance—wherein companies avoid paying heed to the law and the consequences of their decisions

(2) compliance—this approach leads to companies working within the limits of the law, which is considered unwelcome and restrictive, but also necessary

(3) prevention—here, the law is viewed as guidance, with companies and executives actively seeking legal counsel. MIT Sloan refers to this as a “proactive instead of reactive” approach to law

(4) value—the law in this pathway is essential when trying to add value to a company’s products or services. That is to say, the company’s legal teams work to maximize return on investments through the use of law, factoring in important stakeholders—both internal and external. In fact, the legal team itself becomes a stakeholder in this approach

(5) transformation—this is when companies successfully integrate legal frameworks into their corporate strategies and business models. It can be a tricky transition to make, especially for companies that have operated for a while without following this model, or have no resources to do so.

It’s about figuring out your company and its executives’ understanding of legal models and frameworks to see which pathway suits your organization more. To learn more about what legal strategy works for you, get in touch with me through my website.

Fiscal policies refer to how governments spend and employ taxation to influence economic conditions, such as demand for employment, goods and services, economic growth, and inflation. The government’s decisions are aimed at regulating business cycles and balancing the economy in a way that allows them to create favorable conditions that align with their overall policies and goals.

When a government uses fiscal policy to increase economic growth, it’s known as an expansionary fiscal policy. In such cases, the government runs on a deficit, meaning their spending is greater than their revenue. This is done by giving consumers and business owners tax cuts, hence encouraging them to make investments and spend more.

On the other hand, a contractionary fiscal policy involves the government decreasing spending and increasing taxes to slow economic growth and control inflation.

What does any of this have to do with me?

Fiscal policies that are made at federal levels have an impact on the decisions and day to day lives of everyone in the economy—from ordinary people to large corporations and, of course, the state itself. All economic endeavors depend on such policies, making them incredibly relevant to all stakeholders.

Fiscal policy has an effect on share markets because it impacts rates of interest, taxes on income and investment, and given the nature of fiscal policies, the decision to invest may be inhibited or encouraged. Be aware of the current government’s policies before buying shares since your personal interests may not align with the federal policy.

As investors, it’s helpful to know what your government’s current policies are in order to make decisions that could end up either making you a lot of money, or costing you heavily.

Learn more about how financial decisions are made by reading our other blogs and articles.