Premium Essay

Management and Control of the Corporation

In: Business and Management

Submitted By sacken101
Words 2404
Pages 10
Management and Control of the Corporation

Kenneth Weddle
LEG 205
Strayer University
Professor John Taulane
September 2, 2015

Shareholders, as the owners of the corporation, are entitled to many legal rights. The most important goal of the corporation should be wealth appreciation for shareholders and many times this is not codified in a specific legal right (Velasco, 2006, p. 409). More often these rights need to be specified in the corporation’s incorporation documents or bylaws. Velasco (2006) describes the right to vote and elect directors and the right to sell stock as the “fundamental rights of the shareholder.” Additionally shareholders have financial rights as well which must be spelled out within the corporation’s bylaws. In a modern, publically traded corporation, it is impossible to for shareholders to set overall business policy or determine strategic direction of a corporation, much less manage the day to day operations of the corporation. Corporate statues, in all states, provide that the board of directors will manage the affairs of the corporation (Hamilton, Macey, & Moll, 2010, p. 405). One of the most important rights that a common shareholder has, as an owner of the corporation, is the right to vote for directors. Most publically traded corporations have traditional voting for directors, in where one share of stock equals one vote for each share owned for each director nominee. Cumulative voting allows for minority shareholders to elect directors. The United States Securities and Exchange Commission (2014) gives an example of cumulative voting as:
If the election is for four directors and you hold 500 shares (with one vote per share), under the regular method you could vote a maximum of 500 shares for each one candidate (giving you 2,000 votes total—500 votes per each of the four candidates). With cumulative voting, you are...

Similar Documents

Premium Essay

Southern Management Corporation Case Stuy

...PRACTICING PROJECT MANAGEMENT AT SOUTHERN MANAGEMENT CORPORATION (SMC) Management of Information Programs and Services Project Report To study and identify key areas of focus in the business management model currently used at the Southern Management Corporation Hitesh Gupta | Lester Pereira | Prannoy Banerjee Table of Contents 1. Executive Summary………………………………………………………………………………………………………………….4 2. Introduction…………………………………………………………………………………………………………………………….4 3. Problem Statement………………………………………………………………………………………………………………….5 4. Objective………………………………………………………………………………………………………………………………….6 5. Scope………………………………………………………………………………………………………………………………………6 6. Methodology……………………………………………………………………………………………………………………………7 7. Data Analysis and Summary of Key Findings…………………………………………………………………………….8 7.1 Interviews………………………………………………………………………………………………………………………………....8 7.2 Information of the Organization………………………………………………………………………………………………….9 7.3 Organizational Structure of the Corporation……………………………………………………………………………11 8. Major Issues………………………………………………………………………………………………………………………….11 9. Recommendations………………………………………………………………………………………………………………..12 10. Conclusion…………………………………………………………………………………………………………………………….17 References………………………………………………………………………………………………………………………………………….18 Attachments……………………………………………………………………………………………………………………………………….19 Executive Summary: Management practice relies upon case studies and the individual......

Words: 2942 - Pages: 12

Premium Essay

Budgets and Budgeting

...International Journal of Accounting and Taxation, Vol. 1 No. 1, December 2013 Budgetary Control as a Measure of Financial Performance of State Corporations in Kenya Kenneth Odour Adongo1 Ambrose Jagongo PhD, MKIM2 Abstract The importance of financial stability in enabling an organization to function efficiently and maximize the potential for service delivery cannot be underestimated. The quest for better service delivery under new public management in public organizations in Kenya necessitates the need for public organizations to have proper financial standing in order to run operations and motivate workers through better remuneration as well as improved working conditions. Critique of literature on factors affecting financial performance reveal that gaps remain on the influence of budgetary control on financial performance of public institutions. This study sought to investigate the relationship between budgetary controls and financial performance of state corporations in Kenya. The study sought to determine the salient features of budgetary controls in state corporations, establish the human factors within budgetary controls, establish the process of budgetary control in public organizations, and determine the challenges affecting budgetary control. A descriptive survey design was used to gather data from the state corporation’s managers of the sampled state corporations. 14 corporations were selected from the 138 to participate in the study. Purposive sampling was used......

Words: 10747 - Pages: 43

Premium Essay

310.1.2

...company in which the owner and the company are basically one in the same. This is the most basic and simplest company to form. Many people use their own name or a DBA, but all liability lies with the owner. * Liability-In this form of business the owner is responsible for all actions of the company personally. There is no protection of assets or future earnings. This also includes the actions of any employees. * Income Taxes-Taxes are filed one time by the owner with his or her personal taxes. Sole proprietorship has the lowest tax rate of all form of business. * Longevity or Continuity of the Organization-A sole proprietorship may remain open as long as one would like. * Control-The owner has total control over the company and its assets. * Profit retention-The owner controls all monies of the company and personally responsible for the finances therefore the owner retains all profit of the company. * Location-When you expand into a new state it is simple to register with that state using your name or a DBA. Income and sales tax will need to be paid in accordance with the laws in which the stat it is earned in. * Convenience or Burdon-The owner is ultimately responsible for all aspects of the business. This includes compliance with state and local laws and the general survival of the company. General Partnership-This type of company is similar to a sole proprietorship but is held by more than one individual. It is simple to form two people agree......

Words: 1680 - Pages: 7

Premium Essay

Management

...Journal of International Business and Law Volume 7 | Issue 1 Article 3 1-1-2008 Management Controlled Firms v. Owner Controlled Firms: A Historical Perspective of Ownership Concentration in the US, East Asia and the EU Andrew C. Spieler Andrew S. Murray Follow this and additional works at: http://scholarlycommons.law.hofstra.edu/jibl Recommended Citation Spieler, Andrew C. and Murray, Andrew S. (2008) "Management Controlled Firms v. Owner Controlled Firms: A Historical Perspective of Ownership Concentration in the US, East Asia and the EU," Journal of International Business and Law: Vol. 7: Iss. 1, Article 3. Available at: http://scholarlycommons.law.hofstra.edu/jibl/vol7/iss1/3 This Article is brought to you for free and open access by Scholarly Commons at Hofstra Law. It has been accepted for inclusion in Journal of International Business and Law by an authorized administrator of Scholarly Commons at Hofstra Law. For more information, please contact lawcls@hofstra.edu. Spieler and Murray: Management Controlled Firms v. Owner Controlled Firms: A Historic MANAGEMENT CONTROLLED FIRMS v. OWNER CONTROLLED FIRMS: A HISTORICAL PERSPECTIVE OF OWNERSHIP CONCENTRATION IN THE US, EAST ASIA AND THE EU Andrew C. Spieler* & Andrew S. Murray" ABSTRACT This paper will present a historical perspective on the relationship between owner controlled firms and management controlled firms in the US, Europe, and East Asia, and the degree to which......

Words: 10704 - Pages: 43

Premium Essay

Financial Management

...FINANCIAL MANAGEMENT Chapter 1 The Corporation Financial Management 2  How people in corporations make financial decisions? Financial decisions?  Where,  when, what, how much, how…etc.  Mostly concern with three decisions: _______decisions, _________ decisions and _________decisions. Chapter Outline 1.1 The Four Types of Firms 1.2 Ownership Versus Control of Corporations 1.3 The Stock Market 3 1.1 The Four Types of Firms     Sole Proprietorship Partnership Limited Liability Company Corporation 4 Legal forms of business organisation  Sole proprietorship A business owned by a single individual, unlimited liability, limited access to capital, lack of continuity, constraints of various skills.  Advantages  Easy to create  Disadvantages  Unlimited personal liability  Limited life 5 Legal forms of business organisation  Partnership  An association of two or more individuals joining together as co-owners to operate a business for profit, joint responsibility, involves partnership agreement, better access of capital/skills, continuity of business? partners are personally liable for all of the firm’s debts. A lender can require any partner to repay all of the firm’s outstanding debts. partnership ends with the death or withdrawal of any single partner.  All  The 6 1.1 The Four Types of Firms (cont'd)  Partnership  Limited Partnership has two types of......

Words: 1354 - Pages: 6

Premium Essay

Decentralization in Organisations

...The vast majority of corporations are decentralized to considerable degree. What kinds of organizations are best run in largely centralized manner? The majority of corporations today is decentralized in business units or divisions, but which are not, and why are they best run in centralized manner? This essay will answer the question above and provide my review of contents to create an efficient and well-run corporation. One of the most important and essential elements of a well-run corporation is motivation. A very well discussed topic of the current debate is, what corporations can do to avoid lack of motivation. Resent research had concluded cost companies all over the world fraud cost more than 2,9 trillion dollars every year (Win A. Van der Stede, 2011, p. 11). This essay will provide evidence from theoretical management and accounting theory to describe in which way corporations there are centralized, should be run best and most efficiently. Most corporations is multinational and divided in divisions and business units, because it makes them more efficient and easier to control. All these divisions make them highly complex and they operate probably in many different countries. I my opinion, centralized corporations should have the exact opposite characteristics, they should be small, probably founder-owned and operate in highly changeable environments, e.g. high-tech or service companies. I think they need a vertical organizational structure, where the......

Words: 767 - Pages: 4

Premium Essay

Partnership

...and the Corporation Code, the Securities and Exchange Commission (the “Commission”), in a meeting held on June 18, 2009, approved the promulgation of this Revised Code of Corporate Governance (the “Code”) which shall apply to registered corporations and to branches or subsidiaries of foreign corporations operating in the Philippines that (a) sell equity and/or debt securities to the public that are required to be registered with the Commission, or (b) have assets in excess of Fifty Million Pesos and at least two hundred (200) stockholders who own at least one hundred (100) shares each of equity securities, or (c) whose equity securities are listed on an Exchange; or (d) are grantees of secondary licenses from the Commission. Article 1: Definition of Terms a) Corporate Governance – the framework of rules, systems and processes in the corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stockholders; b) Board of Directors – the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts all its business and controls its properties; c) Exchange – an organized market place or facility that brings together buyers and sellers, and executes trades of securities and/or commodities; d) Management – the body given the authority by the Board of Directors to implement the policies it has laid down in the conduct of the business of the corporation; e)......

Words: 6584 - Pages: 27

Premium Essay

Risk Management in Public Sector

...Risk Management Framework in Public Sector Organisation: A Case of Putrajaya Corporation Zarina Zakaria, PhD Department of Accounting Faculty of Business & Accountancy University of Malaya 50603 Kuala Lumpur zarinaz@um.edu.my Zamzulaila Zakaria, PhD Department of Accounting Kulliyah of Economics and Finance International Islamic University 56000 Kuala Lumpur zlaila@iium.edu.my ABSTRACT This case describes the risk management framework in Putrajaya Corporation, a public sector organisation in Malaysia. Whilst risk management is prevalent in commercial organisations, such is not the case in Malaysian public sector. This case elaborates the policy and objective of risk management as well as provides a discussion on the various committees that steer risk management forward in PjC. The process involved is also provided and comparison is also made with the COSO framework. The exhibits provided in this case are used with permission straight from the organisation’s files, and all of the information in this case is factual, as obtained from field study performed which includes observation and interviews performed with the relevant actors. The case is appropriate for an internal audit class at an undergraduate level. BACKGROUND December 2011: Breathing a sigh of relief, Badlishah sat on the overstuffed sofa with the biggest grin on his face. “Give yourself a pat on your back, Bad. You worked hard for this.” said his inner voice. After a good two and a......

Words: 3006 - Pages: 13

Premium Essay

Management

...The management process is a series of activities in a cycle of planning and control where planning is refers to the setting of objectives for an organization and draws a line of how it can be achieved. Controlling activity itself is refers to the implementing plans by using the feedback to accomplish the objectives. In management, control system is necessary in which the activities of different divisions, departments, and sections need to be coordinated and controlled. To be specific, management control system is needed to clearly communicate the organization’s goal, to ensure that managers and employees understand the specific actions required of them to achieve organizational goals, to communicate results of actions across the organization and to ensure that managers can adjust the changes in environment. In Xerox Corporation, they are using planning process as their management control system. Al Senter, the Xerox’s Vice President of Finance in 1990 already stated that the control function must add value to the product by working with line management. Each operating units in Xerox Corporation will draw their own long term planning in order to get reviewed and feedback by the organizations. It’s important to have planning as their one of the control systems since it will set a standard of performance. By this planning process, each of the division general managers in Xerox Corporation will responsible for managing and controlling their subordinate to deliver the committed...

Words: 572 - Pages: 3

Premium Essay

Strategic Management

...Essentials of Strategic Management Authors: David Hunger & Thomas. L. Wheelen Book Review by Asik Kathwala © www.hrfolks.com All Rights Reserved 1 The Essentials of Strategic Management “The Essentials of Strategic Management” provides us with a short, concise explanation of the most important concepts and techniques in strategic management. It is a rigorous explanation of many topics and concerns in strategic management. These concepts are clearly explained by citing various examples. Precisely the book deals with the following. • A strategic decision-making model based on the underlying process of environmental scanning, strategy formation, strategy implementation and evaluation and control. • Michael Porter’s approach to industry analysis and competitive strategy • Functional analysis and functional strategies. R & D and R & D strategies which emphasize the importance of technology to strategy and product-market decisions. • Executive leadership and succession, reengineering, total quality management, MBO and action planning. • Social responsibility in terms of its importance to strategic decision making. © www.hrfolks.com All Rights Reserved 2 Basics concepts of strategic management The study of strategic management Strategic management is the set of managerial decision and action that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long range......

Words: 6642 - Pages: 27

Premium Essay

Charter of the Finance and Audit Committee of the Oracle Corporation Board of Directors

...CHARTER OF THE FINANCE AND AUDIT COMMITTEE OF THE ORACLE CORPORATION BOARD OF DIRECTORS (As last amended by the Board of Directors on July 13, 2008) I. PURPOSE The primary function of the Finance and Audit Committee (the “Committee”) is to provide advice with respect to the Corporation’s financial matters, to oversee the accounting and financial reporting processes of the Corporation and the audits of the financial statements of the Corporation, to assist the Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, tax and legal compliance, and to evaluate merger and acquisition transactions and investment transactions proposed by the Corporation’s management. Consistent with this function, the Committee endeavors to encourage continuous improvement of, and foster adherence to, the Corporation’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to: • • • • • • Serve as an independent and objective party to monitor the Corporation’s financial reporting process and internal control system. Review and appraise the audit efforts of the Corporation’s independent accountants and internal audit department. Evaluate the Corporation's quarterly financial performance as well as its compliance with laws and regulations. Oversee management's establishment and enforcement of financial policies and business practices that are designed to manage business and financial risk and to comply with......

Words: 2675 - Pages: 11

Premium Essay

Control Mechanisms

...Starbucks: Control Mechanisms Starbucks: Control Mechanisms Starbucks is the leading coffee company in the world. They have locations around the world, many of which are independently owned. In order for the corporation to keep accurate records on the stores, they have implemented many types of controls. Four types of controls used in the Corporation are Bureaucratic Control, Budgetary Control, Financial Control, and Concurrent Control. Bureaucratic Control Bureaucratic controls are control higher up the chart of an organization, have authority to dictate policies and procedures. This control starts with the board of directors, followed by the Chief Executive Officer, vice presidents, and continues as necessary. Starbucks’ bureaucratic manages through policy rules and number of operating procedures, which helps to determine the behavior of divisions, functions, and individuals. The essential of Bureaucratic Controls, the profit motive on a larger-scale enterprise tend to help the business grow and achieve a higher level of profit. The stock market valuation of the firm is the influence by expectation of future sales and profit, produce negative growth. The cost motive the economics of scale could have an effect of increasing the productive capacity of the business, and help increase the profit margins. The market power object can increase job market dominance and increase pricing power. The risk concept provide the business expansion......

Words: 978 - Pages: 4

Premium Essay

Control Mechanism: Disneyland

...Control Mechanism: Walt Disney Company Whitney Leung Tony Saludas Wendy Sanchez Jim Stickell MGT 330 Jack Land “The management function of monitoring performance and making needed changes” is control (Bateman). Control is the fourth and final function that completes the management process and will help guarantee success in an organization. This process will help management ensure that an organization’s will use all necessary resources to achieve their goals effectively and efficiently. The Walt Disney Company and their associated offices have continuously over the years committed to produce creative entertainment experiences made for every family across the world. Today, this major corporation is split into four different business segments in the following categories: media networks, parks and resorts, studio entertainment, and consumer products. (The Walt Disney Company) Since founded in 1923, The Walt Disney Company use control mechanism to maintain regulated guidelines and procedures to achieve their goals effectively and efficiently. This paper will examine, and compare and contrast four types of control mechanisms the Walt Disney Company used: (1) budgetary controls, (2) marketing control, (3) bureaucratic control cycle, and (4) management audits to determine the effectiveness of each by examining the positive and negative reactions to these controls in order to explain how these control mechanisms affect the four function of......

Words: 1467 - Pages: 6

Premium Essay

Strategic Management Accounting W12

...ACCG330: Strategic Management Accounting LECTURE 12 CONTROL PROBLEMS AND PRACTICES IN MULTINATIONAL ORGANISATIONS ACCG330 Readings: Anthony & Govindarajan (2007, pp.678-696) ACCG330 Strategic Management Accounting Session 1, 2012 Learning Objectives 1. Describe management control problems and practices in multinational corporations. 2. Explain problems and issues associated with global organisations: i. Cultural differences and their impact on management controls. ii. Transfer pricing and related issues in multinational corporations. iii. Effects of exchange rates on multinational corporations and control system design issues. ACCG330 Strategic Management Accounting Session 1, 2012 1 Nature of Multinational Corporations (MNCs) • What is a Multinational Corporation? – A corporation that owns and operates production facilities in two or more countries. OR – A corporation with power to coordinate and control operations in two or more countries without owning them. • Typically have Headquarters in the country of origin • Build or acquire affiliates or subsidiaries in other countries (the host nation) ACCG330 Strategic Management Accounting Session 1, 2012 Basic Structures of MNCs • A number of basic structures exist that permit an MNC to operate and compete internationally – Structure must meet the need of both the local market and the home-office strategy of globalization – Basic structures of MNCs: • Domestic structure plus foreign......

Words: 1066 - Pages: 5

Premium Essay

Business Structures

...and disadvantages of a Sole Proprietorship | | Advantages | | Disadvantages | | Liability | Business and owner are legally the same entity. Owner has better control over its liabilities. A business owner could avoid business ventures that might be too risky. | Unlimited personal liability for business debts and lawsuits. The owner bears all responsibility for debts and lawsuit and could lose personal properties in the event of a bad business deal. | Income tax | Business expenses and loses are tax deductible. No separate tax returns. Owner may deduct a net business loss from personal income taxes. No corporate tax payments | Net business loss is subject to loss limitations. May be subject to self-employment taxes and may not be entitled for some business deductions | Continuity of the organization | Can own the business for any duration of time and sell it when he or she sees fit. Can even pass a business down to his or her heirs. | Illness and death can endanger the business. Business can terminate upon death providing that the Sole Proprietor has not passed on the business to his/her heir. Even when a business is passed on to an heir the potential for failure is still there since the new owner might not share the business vision | Control | Flexible to manage, it gives you complete control and decision making power. | Having one manager limits the...

Words: 1968 - Pages: 8