Question

To ensure compliance with the law and regulations, health care providers need to implement and maintain an effective corporate compliance plan. What are the advantages and disadvantages of creating and effective corporate compliance plan?

Answer 1

An effective corporate compliance plan is very vital in any type of business organization whether it is a profit making organization or non-profit organization because every type of organization have to follow certain corporate rules & regulations.

So let’s discuss some advantages & disadvantages of an effective corporate compliance plan.

Advantages of an effective corporate compliance plan;

1. It helps in improving quality inside the organization because with the help of an effetive corporate compliance plan a firm can ensure about the meeting of some basic standards so that overall quality can be maintained.

2. It helps in improving the overall efficiency of the firm because whenever a firm adopt an effective corporate compliance plan then most of the work will be performed efficiently.

3. It helps in improving trust level amongst the customers because as customers know that all corporate regulations are being meet time to time then more and more trust of customers will be there.

4. It will also help in managing all types of business risk effectively and we know that every type of organization got affected by various type of business risk hence management of these risks are very vital thus we can say that an effetive corporate compliance plan helps in minimising these risks.

Disadvantages of an effective corporate compliance plan;

1. Main disadvantage of an effective corporate compliance plan is that it create more costs burden on the firm because everytype of plan and its implementation requires some trained employees and finance as well. That is why it is true that it will lead to some extra costs to the firm.

2. Sometime it is seen that management does not support for such effective corporate compliance plan because management want to take some undue advantages that is why management becomes inactive in adopting such effective corporate compliance plan.

3. An effective corporate compliance plan may lead to more formal relationship between the employees of the firm that is why a firm can not take advantage of informal communication and informal relationship between the employees. Thus we can say that more focus on formal structure sometime lead to some disadvantages also.

4. More and more reporting burden is also an disadvantage of effective corporate compliance plan because due to adoption of such corporate compliance plan a firm have to maintain a proper formal reporting system.

5. It may lead to rigidity and we know that flexibility is required sometime for getting desired goals but in case of corporate compliance plan, a firm may loose its flexibility.