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Legal Context
One of the facets in the context of the organization

Every organization must navigate its unique context, which will vary depending on several factors, including:
  • The type of organization (eg. services and/or products)
  • The sector in which the organization operates (eg. MUSH sector, industrial, residential, etc)
  • The geographical location in which the organization is situated
  • The jurisdiction in which the organization is located


Purpose
An understanding of the legal context is necessary for the organization to determine value and establish appropriate:


Elements of the Legal Context

       External Political Factor

  • Labour/Employment laws
  • Discrimination laws
  • Environmental laws
  • Health & safety laws
  • Consumer Protection laws
  • etcetera…
      Internal Politicial Factors
  • Contracts with 3rd parties
  • Lease agreements
  • Right of way agreements
  • Easement agreements
  • Bylaws, rules and regulations
  • Active warranties on assets
  • etcetera…


Examples of "Knots" in the Legal Context
Listed below are some examples of problems in the legal context of an organization:
  • Unsafe site conditions
  • Unidentified risks
  • Unfavourable contract terms
  • Escalating lawsuits
  • Misaligned policies


Process and Analysis of the Legal Context
An understanding of the legal context of an organization is derived from:
A PESTLE analysis can sometimes be supplemented with a SWOT Analysis. The following table provides an example of a correlation of the organization’s strengths, weaknesses, opportunities and threats.

 

Amiable Housing Society (AHS)

 

Strengths

Weaknesses

Opportunities

Threats

Political

 

  AHS has a poor reputation in the community from an incident that occurred a few years ago

 

  Four new developments under construction on neighbouring properties

Economic

   The AHS team is well educated and trained

  The reserve fund is low and not adequate for some upcoming projects

  High energy consumption of some assets

   Staff efficiencies/ productivity can be improved

   New energy efficient equipment can be installed to lower gas and electricity costs

  Large capital projects need to be funded over the next few years

  Increased fuel costs are hard on the operating budget

Social

   AHS has well defined job descriptions

  Low motivation of some staff

   Hire a 2nd maintenance manager

  Ageing workforce

Technological

   High speed internet access

  Not all staff is computer savvy

   Direct digital controls on HVAC equipment can be enhanced to reduce operating costs

 

Legal

 

  Not all assets covered under service contracts

 

 

Environmental



  On site streams and catch basins are not protected

 

  Neighbouring industry is causing pollutants

 

3

7

4

4

In the preceding table, the organization has identified three (3) strengths, seven (7) weaknesses, four (4) opportunities and four (4) threats. These need to be converted into a series of goals and policies. The following table provides an example of the relationships between certain goals and policies.

 

Amiable Housing Society (AHS)

 

Goals

Policies

Political

To enhance the organization’s reputation in the local community.

All contracts shall be reviewed by senior management staff

Economic

To maximize interest income in the organization’s reserve fund and to ensure adequate cash flow by purchasing the appropriate investment vehicles

All savings shall be deposited into Guaranteed Investment Certificates (GICs) with maturity timeframes that match the remaining useful life of the assets identified in the capital plan.

Social

To develop a succession plan for senior members of staff who may retire over the next five years.”

All new hires shall undergo the safety training program

Technological

To equip all staff with appropriate technology supported by a central database of all the organization’s asset records

 

Legal

To ensure that the organization is not exposed to undue risk and complies with all regulatory authorities

The organization shall only hire suitably qualified maintenance contractors who have been pre-qualified to demonstrate their competence

Environmental

To protect all onsite water sources from pollution from resident’s vehicles.

All catch basins shall be inspected annually




Legal Goals
These types of goals relate to external factors, such as labour laws and internal factors such as active warranties on some of the assets (eg. new roof with 5-year labour warranty).


Tools for the Legal Context
Listed below are some of the tools to assist the asset management team with the management of the legal context:
Legal "knots" are insidious and reveal themselves suddenly to the organization
Fig. Some examples of insidious legal "knots" in the context of the organization.



Every organization is influenced by a multi-faceted context. These facets should be recognized as landmarks that will orient the organization ast it navigates a path along the asset management journey
Fig.  Every organization is influenced by a multi-faceted context. These facets should be recognized as landmarks that will orient the organization ast it navigates a path along the asset management journey.


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Fig. Organizational "knots" (problems) require patience and finesse to untangle them -- or they will get even tighter.  Do you know how to untangle the knots in your organization?


The various sectors of industry and real estate that are contemplating ISO 55001 conformity
Fig. All sectors of the economy present varied contexts in which organizations operate. The primary sector (extraction), secondary sector (production), tertiary sector (service-based) and the quaternary sector (knowledge-based).

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