This week we are returning and focusing on learning objectives 1 & 2. Our readings and subsequent discussions this week will be on two key elements of Strategic Management: Structure and Control. Let’s proceed….
We focus on the need for both shareholders (the owners of the corporation) and their elected representatives – the board of directors – to actively ensure that management fulfills its overriding purpose: increasing long-term shareholder value.
As noted by Robert Monks and Nell Minow, two of the leading scholars in corporate governance, the primary participants in corporate governance are:
The shareholders,
The management (led by the Chief Executive Officer), and
The board of directors
So what is “corporate governance?”
Well I’m glad you asked…..
Corporate governance can be defined as the relationship between the various participants in determining the direction and performance of the corporation.
There are several internal and external mechanisms that can serve to align managerial interests and shareholder interests.
INTERNAL MECHANISMS EXTERNAL MECHANISMS
A committed and involved board of directors Banks and analysts
Shared holder activism Regulators
Effective managerial incentives and awards The media
Public activists
FORUM ASSIGNMENT
Review the week six lesson: Strategic Development/Organizational Structure, located in the Content area of the classroom.
Read chapter 12, Strategy Development Processes and chapter 13, Organizing for Success.
After viewing the lesson and reading this week’s material, read one of the following Illustrations below to answer. Use your own words and do not copy or quote from the book.
A-G, read illustration 12.3, “An incrementalist view”. Discuss the two questions at the end of the illustration in your forum.
THE BOOK:
Johnson, G. (2013). Exploring Strategy Text & Cases: Vol. 10th edition. Pearson.
I CAN’T FIND AN EBOOK FOR IT.
