An action research in improving regulatory compliance in the purchase of equipment

• Main Author: Arilla, Bien Reinhard D.
• Format: text
• Language: English
• Published: Animo Repository 2019
• Subjects: Purchasing—Philippines; Compliance auditing—Philippines; Tax incentives—Philippines; Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6432; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/13478/viewcontent/An_Action_Research_in_Improving_Regulatory_Compliance2.pdf
• Institution: De La Salle University

This action research proposal is aimed to address the low compliance rate of a BPO Company in securing regulatory permits in its purchases of equipment. The regulatory permits are vital for the Company’s entitlement to tax incentives. Because of the development of government policies and procedures for IT export enterprises, more so being regulated by special laws, securing regulatory permits becomes stricter that the related compliance has become significantly demanding and complex. In this regulated environment, the Company should have defined structure, policies, and guidelines to comply effectively with the rules and regulations to avoid penalties. Noncompliance has been one of the significant issues of the Company because of the material impact on the business, one of which is potential impairment of operational cash flows. In using the action research methodology, the underlying issues on the existing compliance practices were identified. By employing methods of inquiry, journal keeping, dealing with role duality and managing organizational politics through force field analysis, proposed changes and improvements to the compliance practices and behavior were introduced and implemented. This action research also showed how the existing relationship between the Tax Team and the support departments were developed through providing synergy for mutual understanding for accomplishment of shared goals. The improved collaboration between these groups resulted to a more efficient procurement of equipment process being able to meet operational requirements within the prescribed timeline, which lead to customer satisfaction – one of the Company’s primary goals. Of the different approaches in effectively communicating the compliance guidelines, the orientation and continuous communication using compliance gaining strategies proved to be most effective in affecting the stakeholders’ behavior in consistently complying with the requirements. The aforementioned approach affected the learning and behavior of the stakeholders towards the regulatory requirement. Consequently, it was identified that there was a need to establish internal controls to serve as a deterrent to minimize violations of the stakeholders. The effectiveness of these approaches were validated through this action research project. The interventions focused on learner’s acquisition of knowledge for them to be able to understand the regulatory environment of the Company, the importance of the regulatory permits, and the consequences of violations. This action research allowed them to systematically and intuitively consider such requirements and consistently comply with minimal interventions. The findings of this study also offered new insights for scholars and practitioners involved in handling regulatory compliance particularly IT enterprises registered with the Philippine Economic Zone Authority.