Premium Essay

Organizational Structure and Corporate Governance in the Firm

In: Business and Management

Submitted By otseobande
Words 330
Pages 2
ORGANISATIONAL STRUCTURE AND CORPORATE GOVERNANCE MECHANISMS IN THE FIRM
-organisational structure definition, types, application e.t.c
-corporate governance definition, application in the firm, e.t.c
-importance of corporate governance and organisational structure to the growth of the firm
-organisational structure mechanisms, corporate governance mechanisms in the firm

INTRODUCTION
Organisational Structure
Organizational structure defines the scope of acceptable behaviour within an organization, its lines of authority and accountability, and to some extent the organizations relationship with its external environment. More specifically, it shows the patterns or arrangement of jobs and groups of jobs within an organization and yet it is more than an organizational chart. The organizational structure pertains to both reporting and operational relationships, provided they have some degree of permanence. The individual elements of an organizational structure typically include a variety of components that one may usefully see as building blocks: 1. Departments or divisions 2. Rules, procedures and goals 3. More temporary blocks such as task forces or committees
Ideally, organizational sstructures should be shaped and implemented for the primary purpose of facilitating the achievement of organizational goals in an efficient manner. Indeed, having a suitable organizational structure in place-one that addresses the various human and business realities of the company in question-is a prerequisite for long-term success. Nonetheless, all too often organizational structures do not contribute positively to a company’s performance. This is usually because the structure was allowed to grow somewhat organically and was not redesigned as the company grew so as to more efficiently guide the behaviour of individuals and groups so that they would be maximally…...

Similar Documents

Premium Essay

Corporate Governance, Shareholder Structures and Value Creation

...Péter HARBULA CORPORATE GOVERNANCE, SHAREHOLDER STRUCTURES AND VALUE CREATION Summary : This paper analyzes the interaction between shareholder structures and the quality of the corporate governance structure in France using the value creation criterion. Using shareholder structures allows analyzing the performance of French firms and to measure an underperformance of “hard core” and diffuse ownership firms. This paper, updating results from Harbula (2004), also investigates the relationship between performance and shareholder stakes. Keywords: Corporate governance, value creation (EVA, CFROI), enterprise performance, shareholder structures. Classification JEL: G32, G34 Electronic copy available at: http://ssrn.com/abstract=1925045 Péter HARBULA: Corporate governance, shareholder structures and value creation 1. INTRODUCTION The objective of this working paper is to determine whether “hard core” governed firms truly underperform their peers. The main cornerstone of the analysis will be again to introduce the concept of shareholder structures. During the analysis, the common tools developed by corporate finance practitioners were used including, among others, value creation and return to shareholders. By performing this analysis, even if it is not the central point, the underlying question of ownership structure and efficiency will also be considered. I will also include in the analysis, beside the performance measurement tools, an analysis if the......

Words: 15126 - Pages: 61

Premium Essay

Corporate Governance

...Corporate Governance This article discusses several theories, practices, themes and barriers in order to raise issues that might move corporate governance research forward, while at the same time providing a way to showcase cutting-edge research models and theories. Corporate governance mechanisms provide shareholders some assurance that managers will strive to achieve outcomes that are in the shareholders’ interests. Shareholders have both internal and external governance mechanisms to help bring the interests of managers in line with their own. Internal: an effectively structured board, compensation contracts that encourage a shareholder orientation, and concentrated ownership holdings that lead to active monitoring of executives. External: the market for corporate control. A multi-theoretic approach to corporate governance is essential. Researchers face a considerable challenge in determining those settings that best fit the assumptions in a given theory. Agency Theory Agency theory is the overwhelmingly dominant theoretical perspective applied in corporate governance studies. The assumption given in the agency theory is that those managers are self-interested, and a context in which those managers do not bear the full wealth effects of their decisions. The popularity of agency theory is likely due to two factors: first, it is an extremely simple theory, in which large corporations are reduced to tow participants—managers and shareholders---and the interests of each...

Words: 1381 - Pages: 6

Premium Essay

Corporate Governance

...and ethical lapses have heightened people, press, and investor security of companies, creating demand for a corporate culture of integrity driven performance and a new corporate transparency. Management and boards now feel compelled to ensure that proper governance processes are in place to protect corporate reputation, brand image and share holder value. According to Pricewaterhouse Cooper’s 8th Annual global CEO survey (Dec 2004), 50% of retail industry CEOs believe that there is a strong relationship among all elements of GRC (governance, risk and compliance) and that effective governance can be a value driver and a benefit versus a cost, to their companies. Effective corporate governance requires management and board involvement, accountability, embracing the processes, compliance, and structure required to direct and manage the affairs of a corporation. Its overall goal is to ensure the financial viability to the enterprise and enhance share holder value. For the retail and customer industry, globalization, which entails multinational operations, various financial reporting systems, and complex supply chain with wholesalers, distributors, and multiple types of retailers, not to mention multiple brand portfolios, and various types of outlets, provides significant rationales for management and boards to develop an effective GRC program. Successful corporate governance depends largely on trade-off among the various conflicting interest groups like government, society,......

Words: 15491 - Pages: 62

Premium Essay

Corporate Organizational Structure Template

...IT3006 Corporate Organizational Structure Template Name Brandan L. Holder | Date Completed 5-24-2014 | Prerequisite: You must have Units 1–6 completed before composing this assignment, which utilizes the practiced research and writing processes. Purpose and Overview The purpose of this assignment is to help you prepare for successful, enjoyable participation in a positive team experience for Units 8–10. In this assignment, you will research and compose descriptions of a fictitious anonymous company's IT Systems functional area and four main IT departments to demonstrate the organization’s support and interrelationships between the departments. Further, you will explore organization’s code of ethics and executive summaries of reports to understand what they are and how to compose them. Your main task is to develop a broad overview of the mission and purpose of each IT department to be prepared to participate in the team activity for Unit 8. Note that your assigned role for the team is not needed or related to this assignment. As you complete this assignment on this template, refer to information provided in the Unit 7 studies. Specifically, utilize these provided resources and perform research to satisfactorily complete this assignment. Teamwork Activity Challenge. “Organizational Structures” reading. “Functional Areas Managers” reading. * IMPORTANT: This assignment is due Sunday of week 7. Learners completing it on time will be performing Unit 8 as part......

Words: 2445 - Pages: 10

Premium Essay

Corporate Governance

...IMPACT OF CORPORATE GOVERNANCE ON FIRMS PERFORMANCE: CASE OF FAMILY FIRMS IN MALAYSIA CHAPTER 1: INTRODUCTION 1.0 Background of Study For many years and in many economies, most of business activity was accompanied by proprietorships, partnerships, or closed corporations. In these forms of organizations, a small and closely related group of individuals belongings the same family or co-operating in business for lightly periods runs the firm and share the profit. A lot of attention, has focused on the relationship between ownership structure and corporate performance for instance, a research agenda on the implications of ownership structure on corporate governance by La Porta et al (2000) sustain the legal structure does not offer sufficient protection for outside investor or entrepreneurs, original owners are forced to maintain large position in their companies which results in a concentrated form of ownership thus having implications on ownership structure. On the other hand, more of evidence according to Shirley and Walsh (2001) indicates the private held firms are more efficient and more profitable than publicly held ones although the evidence differs on the relative merit of the identity of each private owner. In 1976, Jensen and Meckling provided results of their researches on ownership structure and firm performance by dividing shareholders into internal investor with management right and external shareholder who are investor without the ballot right.......

Words: 3492 - Pages: 14

Premium Essay

Corporate Governance

...Size and Ownership Structure on the Financial Performance: An Empirical Study on Egypt Nourhan K. Karkoura* Pharos University in Alexandria, Egypt Abstract Corporate governance can be viewed as a mechanism that ensures external investors receive proper returns on their investments. This paper investigates the effect of board size and the effect of ownership structure on firm performance in Egypt. Using a sample non- financial corporation from the most active 50 corporations listed in the stock exchange after excluding banks and financial firms for the period 2007 to 2009. This study adopts a correlational research design using secondary data from the disclosure book issued by the Egyptian stock exchange. Multiple regressions are used to determine the extent to which variations in performance of the most active corporations is explained by the board size and ownership structure. Firm financial performance is measured by return on assets, returns on equity and Tobin Q ratio, while corporate governance aspects were board size and ownership structure. Keywords: board size, ownership structure, financial performance, and Egypt Nourhan K. Karkoura, Graduate Teacher Assistant in Finance and Investment Department, Faculty of Financial and Administrative Sciences, Pharos University in Alexandria, Egypt, E-mail: nourhan.khaled@pua.edu.eg 1. Introduction The importance of corporate board size and ownership structure as a mechanism of corporate governance has always......

Words: 5092 - Pages: 21

Premium Essay

Corporate Governance

...Efficacy of Corporate Governance Contents 1. Definition of Corporate Governance 2. History of Corporate Governance – Pre and Post Liberalization 3. Objectives of Corporate Governance 4. Need of Corporate Governance 5. Framework of Corporate Governance 6. Principles of Corporate Governance in India and in the World 7. Merits and Demerits of Corporate Governance 8. Impact of Violation of Corporate Governance Laws 9. Case Study – a) Satyam b) Pfizer c) 3rd Company 10. Conclusion 11. Bibliography Definition "Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society"-(Sir Adrian Cadbury in 'Global Corporate Governance Forum', World Bank, 2000) Corporate governance is the relationship between corporate managers, directors and the providers of equity, people and institutions who save and invest their capital to earn a return. It ensures that the board of directors is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations. - International Chamber of Commerce Corporate Governance deals with laws, procedures, practices and implicit rules......

Words: 25453 - Pages: 102

Premium Essay

Corporate Governance

... [pic][pic] Corporate Governance and Performance An Exploration of the Connection in a Public Sector Context By Meredith Edwards & Robyn Clough Issues Series Paper No. 1 January 2005 Preface This paper is part of a major project - Corporate Governance in the Public Sector: An evaluation of its Tensions, Gaps and Potential. The project will provide the first comprehensive theoretical and empirical work on corporate governance in the Commonwealth public sector. It has been designed to enhance communication and participation in governance across government, industry, and the community by improving corporate governance literacy and making information publicly available. The project is a collaborative venture between three University of Canberra research centres and key governmental and industry partners including the Australian National Audit Office, the Australian Government Department of Finance and Administration, Deloitte, Touche, Tohmatsu, CPA Australia and MinterEllison Lawyers. This paper is the first in a series that will be produced by researchers and industry partners involved in the project. The aim of the series is to identify and explore key emerging public sector governance issues and encourage wider discussion and activity. The series has been designed for public sector practitioners and corporate governance ‘enthusiasts’ across the public and private sectors. All papers will be broadly distributed and will be available online -......

Words: 12755 - Pages: 52

Premium Essay

Corporate Governance

...Corporate Governance Issues and Responsibility On the basis of the principles and rules outlined by the New Zealand Security Commission and code of ethics adopted by NZFSU and PGGW Wrightson in their company’s prospectus, they have failed to follow good corporate governance in their companies. In this case study, there were many corporate governance issues and some of them are highlighted below Board Composition and review: There was imbalance of independent and non independent directors in the board. Craig Norgate, who was the Chairman of PGG Wrightson failed to promote cooperation and efficiency amongst the board members, and was unsuccessful in trying to maintaining good relationship between the management and the board. The Chairman of NZFSU and PGWW failed to comply with the rules of Corporate Governance that, there should be a mix of balance and skills according to the size and complexity of firms, and in this case study, there were fewer independent directors and the need of them were felt by NZFSU, when the company’s current directors were unable to cope up with the failure of the company The board need to achieve the right mix, and should choose directors who have the required skills and knowledge and can contribute to achieve the goal of the company and provide more benefits to the shareholders. There should be a rigorous process for nomination and selection procedure of a director. The Chairman of Boards of PGG Wrightson and NZFSU, were accused in not......

Words: 2250 - Pages: 9

Free Essay

T3006 Corporate Organizational Structure Template

...to suicide prevention e-mail lists; (c) asking SPRC’s colleagues and outworkers about suicide prevention services for LGBT youth; and (d) analyze the psychological, medical and social science literature. SPRC identified only one program with a primary focus on preventing suicide by LGBT youth. The Trevor Project operates the nation’s only 24-hour toll-free suicide prevention helpline for LGBT and questioning youth (1-866-4-U-TREVOR). Programs Serving the LGBT Youth As stated earlier, many programs do not offer services specifically related to LGBT youth suicide. Rather, many organizations offer services that contribute to suicide prevention by strengthening protective factors, even if suicide prevention is not among their explicit organizational goals. Training in life skills, enhancing peer relationships, connecting LGBT young people with supportive adults, and helping parents and teachers provide support to LGBT youth are all activities that contribute to preventing suicide ( Suicide Prevention Resource Center,2008). Similarly, several youth suicide prevention state coalitions include state chapters of Parents, Families, and Friends of Lesbians and Gays (PFLAG) or other organizations serving LGBT people acknowledge the important of suicide prevention and actively work with this issue. Cooperation among these organizations has reciprocal benefits: LGBT organizations can “ ensure that statewide coalitions include LGBT youth in developing public awareness, training, data,......

Words: 4197 - Pages: 17

Premium Essay

Corporate Governance

...Table of Contents 1. TITLE PAGE 4 EXECUTIVE SUMMARY 6 3. INTRODUCTION: 6 4. CONTEXT OF THE COMPANY: 7 5. WHAT IS CORPORATE GOVERNANCE: 8 6. THE PURPOSE AND BENEFIT OF GOOD GOVERNANCE: 8 7. GUIDING PRINCIPLES OF GOOD GOVERANCE: 9 8. REVIEW OF REPUBLIC BANK LIMITED’S CORPORATE GOVERNANCE: 9 8.1 Organisation Structure: 10 8.2 Republic Bank Limited’s Core Values: 11 8.3 Republic Bank Limited’s Code of Conduct and Ethics: 12 8.4 Corporate Social Responsibility (CSR) in Republic Bank Limited: 12 8.5 Policies and Procedures in Republic Bank Limited: 13 9. CONCLUSION: 13 10. RECOMMENDATION: 14 -15 11. REFERENCES: 16 12. APPENDICES: 17 Appendix I 17 Appendix II 18 Appendix III 19 - 20 Appendix IV 21 - 22 Appendix V 23   TO: THE CHAIRMAN, REPUBLIC BANK LIMITED FROM: CONSULTANT DATE: 03RD MARCH, 2014 SUBJECT: IMPROVING CORPORATE GOVERANCE IN REPUBLIC BANK LIMITED 2. EXECUTIVE SUMMARY It has been established that Organisations need to have a Competitive Advantage to remain viable and profitable. In order to accomplish this, one (1) essential tool is good Corporate Governance. This paper first identifies what good Corporate Governance entails then reviews the Corporate Governance process of Republic Bank Limited (a local banking organisation) utilising the tools, concepts and theories of the governance process identified. Some recommendations have been made to further enhance what the bank currently practices. 3. INTRODUCTION: The......

Words: 4276 - Pages: 18

Premium Essay

Corporate Governance

...uk/BJASS.aspx Corporate Governance and Performance of Saudi Arabia Listed Companies Yahya Ali Al-Matari Faculty of Accountancy, Universiti Utara Malaysia matariyahya@yahoo.com Dr. Abdullah Kaid Al-Swidi College of Arts & Sciences, Universiti Utara Malaysia swidi@uum.edu.my, and Assoc. Prof. Dr. Faudziah Hanim Bt Fadzil Faculty of Accountancy, Universiti Utara Malaysia fhanim@uum.edu.my Abstract: This study aims to provide a concise view of the background of Saudi Arabia‟s legal system, important regulations and monitoring policies related to the corporate governance followed by the Saudi government to enhance the attractiveness of the business environment. In so doing, this study attempted to provide an overview on corporate governance in the emerging markets and more specifically in Saudi Arabia. Additionally, this study has shed lights on the main monitoring devices which play a significant role in regulating and developing the Saudi business environment. The focus was on some corporate governance mechanisms that might affect firm performance including board composition (BODCOM), CEO duality (DUAL), board size (BSIZE), audit committee independence (ACIND), audit committee activities (ACMEET) and audit committee size (ACSIZE). Keywords: Corporate governance, firm performance, emerging countries, Saudi Arabia. 1 British Journal of Arts and Social Sciences ISSN: 2046-9578, 1. Introduction The topic of corporate governance is assuming......

Words: 15071 - Pages: 61

Premium Essay

Corporate Governance Quality and Firm Value in Brazil

...Corporate Governance Quality and Firm Value in Brazil Dr. Alexandre Di Miceli da Silveira, University of Sao Paulo, Sao Paulo, Brazil Dr. Lucas Ayres B. de C. Barros, Mackenzie Presbiterian University, Sao Paulo, Brazil Alexandre Di Miceli da Silveiraa School of Economics, Management and Accounting of University of São Paulo (FEA/USP) Lucas Ayres B. de C. Barrosb Mackenzie Presbiterian University July, 2006 a Professor of Finance and Accounting at School of Economics, Management and Accounting of University of São Paulo (FEA/USP). Tel: (+55) 11 5054-1888. e-mail: alexfea@usp.br (contact author). b Professor of Finance at Mackenzie Presbiterian University. Tel: (+55) 11 3871-2689. e-mail: lucasayres2002@gmail.com. Corporate Governance Quality and Firm Value in Brazil Abstract This paper investigates the influence of corporate governance quality on market value of 154 Brazilian listed companies in 2002. In order to obtain a proxy for corporate governance quality, a broad governance index was built. The investigation was carried out through different econometric approaches in increasing order of complexity, including multiple regressions by Ordinary Least Squares (OLS), instrumental variables approach and systems of simultaneous equations. The results obtained in all econometric approaches show a positive and significant influence of corporate governance quality on firm’s market value. OLS results with market value variables Tobin’s Q and PBV multiple...

Words: 11893 - Pages: 48

Premium Essay

Corporate Governance

...------------------------------------------------- Corporate governance literature review Prepared by: Zainab Ashfaq (4525819) Unit Code: BGP8022 CEO DUALITY-THE COMBINATION OF CHAIRMAN AND CEO ROLES A literature review of different theories and empirical research about CEO Duality. INTRODUCTION Recent financial scandals like Enron, Mobily and WorldCom arise a demand for a better monitoring and controlling structure within the organizations. Conflict of interest between the shareholders and the managers is an on going debate in the literature of corporate governance. In this situation, the board of directors is supposed to be a critical mechanism in supervising the actions of management. Researchers of corporate governance field are well motivated to study about the numerous features of the board of directors based on different theoretical backgrounds. Agency theory and the stewardship theory has been widely used as a theoretical framework by many of these studies. Concerning the board of directors, a developing area of research is whether the CEO and board Chairman roles are split or not to be split (Dey, Ellen and Liu 2011). Agency theory proponent claims that in the best interests of shareholders it is necessary to have a separate Chairman of board and CEO (Nicholson and Kiel 2007). On the contrary, stewardship theory supporters believe in the concept of CEO duality in which the role of CEO and board chair is performed by......

Words: 4334 - Pages: 18

Premium Essay

Corporate Governance

... India, Africa and Asia Pacific region. Using the companies’ annual report of the recent year ending 2014 and 2015 a corporate governance analysis can be made. Does the geographical location of this company impact on their corporate governance structure? The geographical location is important and has an impact of their corporate governance approach since where the headquarters is situated and proximity to the management board influence the decision making of the companies’ by laws, countries have to adopt a system or more than one system of governance as seen in France. Hugo Boss and Burberry are companies’ whose approach of corporate governance are stakeholder and shareholder oriented respectively. Letza et al 2004, compares shareholders and stakeholders approach as the two distinct model adopted over the years by advanced industrial nations and governments. The world is now a global village, funds can be gotten internationally, so the need to boost income, growth, profitability and longevity is sought after. In order to build cross border investment and growth, the demand for transparency and accountability has to be realized so the need of governance code is subject to be created and the model applied impacts on their way of governance structure. In an investors perspective, what to be perceived in companies are: Corporate Ownership and structure Most German listed companies are known to have a moderate amount of ownership whereby ownership is concentrated in a......

Words: 2594 - Pages: 11