Strategic Management Identify a Public

Strategic Management

Identify a public company that is of interest to you and perform an analysis using commonly used ratios based upon their financial report. Based on changes over time and a comparison with industry norms, evaluate the firm's strengths and weaknesses in terms of its financial position.

Wal-mart is one of the leading retail vendors in the nation. The original owner began his business making only an 8 cent profit on every dollar made by the company. This diligence and vision towards future growth ensured a place for Wal-mart in today's top businesses. In 2008, the company earned total revenues at around $378,476,000, showing growth from the previous few years, (MAS Money 2009). The slow growth of the profit margin for each year has gotten Wal-mart executives pumped for a strong chance of further growth with the 2009 revenue numbers.

Explain how the three primary internal governance mechanisms (ownership concentration, the board of directors, and executive compensation) are used to monitor and control managerial decisions. Which of these do you believe has had the least effect in both, monitoring and controlling, and why? Use an example from your current business reading to support your position.

In "making sure that the governance devices used to over-see firms are appropriately applied is an increasingly important part of the strategic management process," (276). Thus, it is important for an organization to choose wisely which governance organizational style is best in terms of their current position and status. Ownership concentration focuses directly on the shareholders -- leaving major decisions up to the larger body of people with separate stakes involved in such decision making. One share holder might have more of a say in organizational governance than another, leaving open room for advantages and disadvantages based on the total stock each individual within the organization holds, but also allows for the majority's voice to be properly heard. This leaves this style of governance to better serve the company as a whole and therefore proves a more robust method of governance. However, the use of a managerial style which involves a broad of directors proves much different. In this, certain elite parties all have a joint stake in the decision making governance. This then allows equal weight to be pulled in various decisions. 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 any sort of real results within the internal world of executive governance.