Corporate governance comes into play in cases where the management of the organization has to be carried out by a manager or a group of managers who are not the owners of the organization. In essence, corporate governance is implemented by a business’ financers in order to monitor and regulate the organization’s utilization of its investments. In this case, the individuals hired to manage the business are paid employees and are responsible for the effective execution of the organization’s processes. As a result of this arrangement, it is only natural for a separation to exist between the ownership of the organization and the management of the organization. While this may appear to be a simple concept, modern-day business models have allowed corporate governance models to develop rapidly over the last few years and this has led to the development of different corporate governance models. The implementation of these corporate governance Continue reading
Corporate Strategies
First Mover Advantage Vs Late Mover Advantage
Companies across the country are consistently being faced with tough decisions regarding business moves to make that will launch them forward in a new competitive market. There are two types of strategies that companies look into when they want to diversify into a different product market. The first approach is called the ‘first mover’ theory and the second is called the ‘late mover’ theory. Both of these strategies have strengths and weaknesses that can either solidify or act as a detriment to the company’s entry into the market. First Mover Theory Advantages and Disadvantages The potential advantages of the first mover theory are numerous. For one, the corporation has the ability to attain exclusive company-product association. It can also find success through the effects of networking and see a rise in consumption as demand grows. First mover theory can help the company determine economies of scale and it can also Continue reading
Theories of First Mover and Late Mover Advantages
Business managers find themselves in a dilemma on the best market entry strategy to adopt among the first and late mover strategies when making an entry into a new market. Theoretical and practical investigations and evaluations into the merits and demerits associated with these approaches could help them make informed decisions on the most appropriate market entry strategy for their firms. Among the advantages a business organization is likely to gain with the first mover strategy is a significant occupation of the target market. This can be in terms of resource capitalization and buyer switching costs. Switching costs stem from the financial burden of initial transaction costs, employee training costs, customer learning costs, and the cost of qualifying a new supplier. Theoretically, switching costs facilitate the creation of value and share of the market although it may not translate to higher profits. Another advantage argued on a theoretical framework is Continue reading
Stakeholder Analysis – Mendelow’s Matrix
As stewards of the shareholder’s investment, directors have a fiduciary duty to safeguard their investment in the business and to work to maintain and increase the wealth of the shareholder. This is the traditional or stockholder view, but a more considerate approach states that companies should not have a limited view; rather they should have an extended view with regard to the whole society. The stakeholder view states that that as an organization is so powerful, socially, politically and economically, unrestrained and injudicious use of their power will eventually lead to the infringement of the rights of other people. The stakeholder theory thus proposes corporate accountability, not just to the shareholders, but to the stakeholders of the company as well. A stakeholder is an entity that can affect, or be affected by the achievement of an organization’s objectives. But, there is considerable dispute about who should be considered to be Continue reading
Competitive Strategies for Business
Competitive strategies are concerned with how a strategic business unit achieves competitive advantage in its domain of activity meanwhile competitive advantage is about how an strategic business units (SBU) creates value for its users both greater than the costs of supplying them and superior to that of rival SBUs. An SBU can have lower costs than its competitors or it can have products or services that are so exceptionally valuable to customers that it can charge higher prices than competitors. There are two basic criteria that can help in identifying appropriate SBUs: Market-based criteria and Capabilities-based criteria. For Market-based criteria, if the parts of an organization are targeting same types of customers through the same sorts of channels and facing similar competitors, they might he regarded as the same SBU. As for Capabilities-based criteria, if they have similar strategic capabilities then the parts of an organization should only be regarded Continue reading
The Effects of Organizational Culture on Strategic Management
Organizational culture is one of the important parts of the strategic thinking and it can impact on company’s employees, customers, suppliers and other different targets. The owner of the company can create their own strategy on the alignment of unique organizational culture with a competitive space. It also involves how organizational culture affects its strategic decision, options and actions. Culture of an organization refers to the unique configuration of norms, beliefs, ways of behaving and so on that characterize the manner in which groups and individuals combine to get things done. It also can define that the set of important assumptions that members of an organization share in common. There is other definition of the organizational culture involves assumptions, adaptations, perceptions and learning. Organizational culture have three layers. First layer includes artifacts and creations, such as annual report, a newsletter, wall dividers between workers and furnishings. Second layer includes values, Continue reading