2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2...
-
date post
21-Dec-2015 -
Category
Documents
-
view
279 -
download
3
Transcript of 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2...
![Page 1: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/1.jpg)
2-1
STRATEGIC MANAGEMENT & BUSINESS POLICY12TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 2 Corporate Governance
![Page 2: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/2.jpg)
2-2
Corporate Governance
![Page 3: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/3.jpg)
2-3
Corporate Governance
The relationship among the board of directors, top management, and shareholders determines the direction and performance of the corporation.
Board
Management Shareholders
DeterminesCompanyDirection
![Page 4: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/4.jpg)
2-4
Corporate Governance
Role of Board
–Monitor
–Evaluate and influence
– Initiate and determine
![Page 5: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/5.jpg)
2-5
Board of Directors Continuum
![Page 6: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/6.jpg)
2-6
Board of Directors
Members --
– Inside directors• “management directors”• Officers or execs employed by the firm
–Outside directors• “non-management directors”• Execs of other firms not employed by the
board’s corporation
![Page 7: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/7.jpg)
2-7
Agency Theory
Agency TheoryAgency Problem –
–Objectives of owners & agents in conflict–Difficult for owners to verify agent performance
Risk Sharing Problem ––Owners & agents risk assessment in conflict
Stewardship TheoryExecutives more motivated to act in best interest of the corporation than their own self-interests. Theory that over time, senior executives tend to view corporation as extension of selves.
![Page 8: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/8.jpg)
2-8
Board of Directors
When Outsiders can be considered Insiders
–Affiliated Directors–Retired Directors–Family Directors
![Page 9: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/9.jpg)
2-9
Board of Directors
Codetermination
–The inclusion of a corporation’s employees on its board of directors
![Page 10: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/10.jpg)
2-10
Board of Directors
Interlocking Directorates
–Direct Interlocking
– Indirect Interlocking
![Page 11: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/11.jpg)
2-11
Board of Directors
Nominations & Elections
–Traditional Approach• CEO invitation to membership• Shareholders approval in annual proxy statement• All nominees usually elected
–Staggered Board Approach• Staggered terms of service/election
![Page 12: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/12.jpg)
2-12
Board of Directors
Sarbanes-Oxley
–Code of Ethics
–Audit, Nominating, and Compensation Committees all outside directors
![Page 13: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/13.jpg)
2-13
Board of Directors
Organization of the Board
–Size
• Charter & Bylaws Determination
![Page 14: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/14.jpg)
2-14
Board of Directors
A Board of Directors job is to provide corporate governance
–Review & shaping of strategy–Pressure for corporate performance–Demand for executive stock ownership–Outside directors increasing– Impact of Sarbanes-Oxley
On behalf of:
Best for the:1. Stockholders2. Employees3. Management Team4. Society
Best for the:1. Management Team2. Stockholders3. Employees4. Society
Best for the:1. Society2. Employees3. Management Team4. Stockholders
![Page 15: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/15.jpg)
2-15
Board of Directors
Transformational leaders
–Change agents through vision for change
![Page 16: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/16.jpg)
2-16
Board of Directors
Successful CEOs usually display:
• Strategic vision• Passion for the company• Strong communication skills• Charisma
![Page 17: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/17.jpg)
2-17
Board of Directors
Executive Leadership
– Provides strategic vision– Serves as a role model–Clearly communicates performance standards–Demonstrates confidence in abilities of followers
![Page 18: 2-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 12 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 2 Corporate Governance.](https://reader033.fdocuments.net/reader033/viewer/2022061609/56649d565503460f94a34d86/html5/thumbnails/18.jpg)
2-18
Strategic Management Process
Strategic Planning Staff
• Identifies & analyzes company-wide strategic issues
• Gathers outside information and viewpoints
• Generates strategic alternatives• Supports top management & business units in
the strategic planning process
• Facilitates business units in coordinating activities related to strategic planning process