Navigating Compliance: Strategic Approaches Across Industries An Examination of Organizational Structures and Responses to Regulatory Changes

Abstract

This master's thesis explores the organization of compliance functions within six diverse case companies, analysing how they adapt to new regulations and manage their supply chains considering evolving compliance demands. Through detailed interviews, this study delves into the variances in compliance structures, ranging from centralized to decentralized models, and assesses their efficacy in meeting industry-specific regulatory standards. Central to this analysis is the impact of organizational structure on the strategic management of compliance. Companies with centralized compliance functions demonstrate a unified approach to managing changes, leveraging robust monitoring systems and legal departments to stay alert of regulatory developments. Conversely, companies which employ decentralized strategies rely on flexibility and sector-specific adaptations, showing a strong preference for using informal networks and cross-departmental collaborations to address compliance needs. Additionally, the thesis examines the dynamic interplay between compliance practices and supply chain management. It highlights the implementation of risk-based approaches aligned with ISO 31000 framework principles, where companies categorize suppliers by risk levels to streamline due diligence and enhance monitoring precision. This is particularly crucial as companies increasingly integrate digital tools like AI and cloud-based platforms to monitor compliance across their supply chains more effectively. Looking towards future challenges, the research discusses the strategic shifts necessary to accommodate new compliance landscapes, such as the CSDDD directive. Companies are not only optimizing their internal operations but also engaging with external stakeholders like policymakers and customers to forge compliant, resilient supply chains.