Governance And Corporate Social Responsibilities

2007-09-08 ContentsTOC o 1-3 h z u HYPERLINK l _Toc8 1 : call Agency Theory to analyze the organisation issues in this case . Discuss jump on responsibilities , board liberty , and executive director director compensation and shareholder interests . PAGEREF _Toc8 h 3HYPERLINK l _Toc9 2 . Use Robins (2006 ) Problem Analysis Framework covering Technical , semipolitical and Cultural categories to discuss the issues in this case . This framework depart be together with the case con . PAGEREF _Toc9 h 8HYPERLINK l _Toc0 3 . What exhibited more influence in making this club secure - Markets , Professions or Regulations PAGEREF _Toc0 h 14HYPERLINK l _Toc1 Bibliography PAGEREF _Toc1 h 16 1 : Use Agency Theory to analyze the governance issues in this case Discuss board responsibilities , board independence , and executive compensation and shareholder interestsTheoretic strategic management is frequently influenced by way theory which examines that theatre directors are not willing to maximize shareholder returns without strong legal implications within large watertights (Jensen and Meckling305 1976 . The relationship of the multinational firm s market environment , stakeholders , resources , and value to the development of strategic well-disposed planning and strategic social positioning determines serviceable roles (Husted and Allen 345 2007 Thus , the board of director s functional role is to mediate the relationship between the chair and executive officers , where shareholder interests are protected only when the CEO is not the board chairman and the CEO and shareholder interests are line up appropriately . At its most basic definition , way of life theory explains that the principals of a firm are the owners and agents are the managers , where agency loss betides when the principal owners maintain direct contain of the firm (Jensen and Meckling306 1976 .

Incentives for management as agents of the firm are financial rewards that occur when the shareholder s interests are exceeded , which allows financial interests of shareholders to be aligned with the manager s functionality (Jensen and Meckling307 1976In the case study of WMX Technologies , the management , as agents of the firm , were not meeting the needs of the shareholders interests . Stocks had plummeted , largely due to WMX s managerial decisions where They tarry to allocate resources as if they were still participating in a growth industry (WMX Case Study . This opportunistic behavior was at the expense of the shareholders , where stocks plummeted because the monitoring of management actions and resource parcelling was not aligned with the needs of the shareholdersThe board of directors has the responsibility to control managerial opportunism . Their responsibility is to monitor the manager s actions as an agent of the firm owners for the shareholders benefit . This means that the board of directors has a responsibility to be impartial and behave independent of executive management team . However , in the WMX case study , it may have been impossible for the board to behave altogether independent of executive management because of the 12 member board two were in force(p)-time insiders , three were former employees , three were machine-accessible due to consultancy arrangements , and four were...If you want to get a full essay, order it on our website: Orderessay

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