Finally, utilizing executive compensation as a method for proper governance which is many times set by a board of trustees or directors also proves beneficial in some circumstances. This allows top executives to be compensated for their influence within organizational decision making. These last two prove to be weaker than bearing weight on the stock holders, for they only allow a few voices to be heard.
3) Briefly describe how the external corporate governance mechanism "the market for corporate control" acts as a restraint on top-level managers' strategic decisions. Also, while corporate governance should foster ethical strategic decisions, what are at least two crucial factors that can negate this?
As much as organizations would like to control every situation in the business environment, this has never been the case. In terms of external market factors, managers and executives are limited by the nature of the market along with changing staff and supplies of products. They limit the ability for managers to effectively control entire situations and allow for potential external threats which can hinder development strategies and stop implemented strategies from producing...
Pick a company that you've heard about and/or know something about in either the video, auto, or computer software industry and describe the likely and/or desirable short- and long-term outcomes of the firm taking either a (1) downsizing or (2) down-scoping restructuring approach.
Many of the American owned auto companies have recently found themselves in serious financial trouble. The world of multi-million dollar advertising and hundreds of locations across the nation can no longer be sustained by corporations such as the GM Corporation which produces some of the most popular American made vehicles on the road today. Essentially turning to a downsizing move in order save much needed cash and expenses would prove one of the only truly viable options for the former powerhouse.
References
MSN Money. (2009). Walmart Stores Inc.: financial statement. Retrieved May 29, 2009 at http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=WMT
