By the end of this unit you should understand: • The range of different businesses and their ownership. • How businesses are organised to achieve their purposes. • The impact of the economic environment on business. • How political, legal and social factors impact on a business. Scenario A bank wants to put together an information pack to help students understand the business world and have asked you to put certain parts of the pack together.
The corporation’s money magically becomes the stockholders’ money” (Denning). What the author failed to realize is that the shareholders bought into the company, and are now owners of the company. That is how the corporation’s money somehow became the shareholder’s money. Making money will always be a corporation’s primary goal whether they want to admit it or not. But that does not necessarily mean they will ignore their social responsibility.
Barclay’s ownership is a PLC company that this means that it is not owned by just one person as in a PLC organisation people can buy shares and this means that people own parts of the business. Therefore Barclays has shares on the London stock exchange for people to buy and it has many owners. Barclay’s aims and objectives are to: * Make sure that make profit- they do this by making customers take out loans, mortgages and giving them a credit card. They make profit mainly from these 3 services because customers pay them back with interest. * To make sure their customers are happy with the products and services
What are agency problems? * Occurs when managers act in their own interests and not on behalf of owners (stockholders) What is corporate governance? Corporate governance is the set of rules that control a company’s behavior towards its directors, managers, employees, shareholders, creditors, customers, competitors, and community. d. What should be the primary objective of managers? * The primary objective should be shareholder wealth maximization.
It appears that Homebake has produced a quality product that is meeting consumer demands; however some of the products are flawed. The flaw can be fixed quickly and relatively inexpensively. Homebake has done everything it can to ensure customer satisfaction among the consumers who purchased a faulty product. The company is in a growth phase and needs support from its banker. As a preparer of financial statements, management will want to produce an income statement that shows a profit (profit maximization motive).
The stakeholders mentioned in the definition refer to all parties involved with the firm, these could be: the board of directors, management, shareholders to customers, employees, labour unions, etc. That being said, firms employ different corporate governance approaches; these differ due to reasons such as differences in countries' (the country where the firm is located) legal traditions, social and cultural values, and the structure of capital markets in individual countries. The underlying difference in the approaches mentioned is concerned with the amount of emphasis placed on the parties that have an interest in the firm and/or those who contribute to the success (profits) of the firm, or as previously mentioned, the stakeholders. Moreover, there are three distinct approaches or models of corporate governance: shareholder capitalism, stakeholder capitalism, and state ownership. Shareholder capitalism, also known as the Anglo-Saxon model places emphasis on the interests of shareholders, rather than other stakeholders such as employees.
If Wal-Mart by some reasons is unable to maintain their healthy relationship with the suppliers they can get out of course of their basic objective of supplying every good under one roof. • COMPETITORS: Competitors can be called the close rivals and in order to survive the competition. Wal-Mart has to keep a close look in the market and formulate its policies and strategies as such to face the competition. • INTERNAL RELATIONSHIP: Factors like the amount of support the top management enjoys from its shareholders, employees and the board of directors also affects the smooth functioning of a business. If Wal-Mart do not co-ordinate with them they may lose their key competency of providing best quality service.
In this context, what kinds of problems can arise? Solution: In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect (vote) the board of directors of the corporation, who in turn appoint the firm’s management (CEO). This separation of ownership from control in the corporate form of organisation is what causes agency problems to exist. Management may act in its own or someone else’s best interests, rather than those of the shareholders.
Michelle Li Business Ethics Dr. Brendan Hogan 11 March 2014 Stockholder vs Stakeholder Model Although both theories articulate what a corporation’s role should be, they have different ideas of how to enforce these theories. Stakeholder theory is a theory created by Edward Freeman, a philosopher, who believed that all stakeholders should be taken into account when making decisions for the company. Stakeholders who are directly involved in a corporation are identified as investors, employees, suppliers, and customers. The stakeholders indirectly involved are the government, trade unions, community groups, or political parties. By identifying stakeholders, the corporation can decide which groups need to be managed.
Business Communication Task 1 P1 In this task I have been asked to select a large organisation, in which I have selected Tata Group and have been asked to explain/evaluate the several types of information used, the sources they get the data from and also why it’s suitable to the business’ strategic choices. Verbal information Verbal information is the information between individuals by using speech/ oral communication. The distribution of information amongst individuals by the use dialogue. The use of verbal communication is using sounds and words to express yourself. Tata Group’s use verbal communication through their staff, by helping the customers find what they want to buy, also verbal communication allows staff to communicate with each other making sure they resolve any problems in the store.