Corporate Strategy and Governance

Corporate Strategy and
Governance
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CONTENTS
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
Background of study....................................................................................................................3
Review of issue faced..................................................................................................................3
Research Aim...............................................................................................................................3
Research Objective......................................................................................................................3
Research question........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
To explore about the importance of Corporate governance for an organisation.........................4
To determine the challenges faced by Tesla due to inappropriate Corporate governance..........5
To identify the relation between ineffective corporate governance and dropping the
performance of Tesla...................................................................................................................7
Recommend ways through which Tesla can improve its market performance and brand image
using effective corporate strategy................................................................................................8
RESEARCH METHODOLOGY....................................................................................................9
DATA ANALYSIS AND DISCUSSION.....................................................................................12
Discussion on the bases of primary data....................................................................................13
Discussion on the basis of Secondary information....................................................................16
RECOMMENDATION AND ACTION PLAN............................................................................17
Recommendation.......................................................................................................................17
Action Plan................................................................................................................................18
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................22
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INTRODUCTION
Background of study
The Corporate governance consist of set of mechanism or policies which are used by an
organisation in order to manage its operations in effective manner. the main aim of corporate
governance is to look after the operation performed within an organisation while considering the
ethical principles and industrial standards and norms (Puranam and Vanneste, 2016). The
corporate governance support an organisation to create value in front of its stakeholders which
further support in achieving the competitive edge and sustainability at marketplace. For
developing deep understanding about this the study is conducted over an issue of corporate
governance to determine its influence over the organisational performance at marketplace and for
this Tesla is consider. The Tesla Inc. is a electric vehicle and clear energy company which is
specialised in creating the electric vehicle manufacturing, battery energy storage from home grid
scale and also maintain the SolarCity, solar roof and Solar panel manufacturing (Jacoby, 2018).
Review of issue faced
The main issue in which the current research project is based consist of challenges faced due
to inappropriate corporate governance within an orgnisation. Tesla is an American electric
vehicle and clean energy company that is currently facing many challenges due to inappropriate
and ineffective corporate governance that consist of issue of speculation and lack of transparency
and majority among board of directors of Tesla and its CEO (Tesla Board Fails to Pass
Supermajority Measure It Proposed Amid Call for More Oversight, 2019). Thus, the current
investigation is based on evaluation of main challenges encountered by Tesla due to
inappropriate corporate governance along with problems related with ineffective corporate
governance and dropping the performance of Tesla (Tesla, Facing Setbacks and Skeptics, Tries
to Get Back on Course, 2019).
Research Aim
To ascertain the influence of ineffective corporate governance practice on overall
organisational performance at marketplace. A study on Tesla
Research Objective
 To explore about the importance of Corporate governance for an organisation
 To determine the challenges faced by Tesla due to inappropriate Corporate governance
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 To identify the relation between ineffective corporate governance and dropping the
performance of Tesla.
 Recommend ways through which Tesla can improve its market performance and brand
image using effective corporate strategy.
Research question
 What is the importance of Corporate governance for an organisation?
 What are the major challenges faced by Tesla due to inappropriate Corporate
governance?
 Explain about the relation between ineffective corporate governance and dropping the
performance of Tesla?
 What are several ways through which Tesla can improve its market performance and
brand image using effective corporate strategy?
LITERATURE REVIEW
It is a vital section of a research project or dissertation that lead base and framework for
complete investigation through developing better understanding about specific topic and its
objective (Puranam and Vanneste, 2016). To accomplish the objective of current investigation
and have better understanding about chosen topic and its objective various online articles and
authentic journals are reviewed and surveyed, a discussion and brief evaluation of which is
provided below:
To explore about the importance of Corporate governance for an organisation
According to the view point of Prachi Juneja, 2020, Corporate Governance is basically
referred to the way as per a corporation or orgnisation is being governed thus, it is mainly the
technique or tool by which all operations and strategies of companies are directed or managed by
its directors and other members of top authority. Corporate governance is important for an
orgnisation as it lead to carrying out the business operations in such a way that is desired by its
stakeholders in order to satisfy them and meet their expectations. Thus, corporate governance is
basically consists of ways and process that are actually conducted by the board of Directors and
the concerned committees for benefits and supporting needs and desires of companies’
stakeholders thus, corporate governance is all about balancing individual and societal goals along
with leading coordination with overall economic and social goals that need to be meet by an
orgnisation (Jacoby, 2018). Corporate governance is a broad concept that deals with deterring a
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way for effective strategic decision making thus, important for creation of value for stakeholders
through ensuring transparency in business operations which ensures strong and balanced
economic development. Thus, it can be evaluated that Corporate governance is important for an
orgnisation as it ensures that the interests of all shareholders are properly safeguarded and meet
through leading enhanced transparency and accountability in business operations and ensures
that all shareholders fully recognizes their rights and act is most viable way to achieve both
financial and social objective of an orgnisation (Lutsenko, 2018).
Further, as per the information provided by Nicholas J. Price, 2017, it has been evaluated
that corporate governance is vital and important for an orgnisation as it ensures corporate success
and economic growth through maintaining confidences and strong connection with stakeholders
and investors that benefits an orgnisation through supporting raise of capital and finance in a
more efficient and effective way. Further, an effective and string corporate governance also
lowers the capital cost through leading a positive impact on the share price of an organisation.
Beside this, corporate governance is having significant importance for an orgnisation as ensures
that an organization in managed in a best possible manner and way that fits and suitable for
meeting interests of all stakeholders in a best way through proper inducement to the owners as
well as managers in order to set and achieve objectives that are in interests of all shareholders
and overall organization (Wang and Sarkis, 2017). Furthers, corporate governance lead to an
efficient tool for the orgnisation that minimize wastages, risk of corruption, and miss-
management in an orgnisation through leading transparency and accountability in all decision
making and corporate strategy that helps in better brand formation and efficient development of
the organisation. Thus, it can be evaluated that corporate governance is important for an
orgnisation to ensure effective strategy formulation ad decision making that meet expectations of
all stakeholders and overall objectives of organisation along with leading foundation of
transparency, accountability and trust in stakeholders and investors to meet the objectives of
company in more better and viable manner (Singh, and Delios, 2017).
To determine the challenges faced by Tesla due to inappropriate Corporate governance
As per the view point of James McRitchie. 2019, Corporate governance represent a set of
rules, practices and processes that are used by top authority and directors to direct and control a
company. This process of compare governance consists of setting an effective balance
betterment interest of stakeholders of company and overall interest and gaols of an orgnisation.
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Furthers, corporate governance forms a vital part of a company as it is essential for the overall
success and leading sustainability through setting out of rules and processes of governance but an
ineffective corporate governance or its failure could have disastrous consequences for an
organisation. The failure of corporate governance can be lead due to ineffective governance
mechanisms that is due to lack of board committees or committees consisting of few or a single
member. The another reason of failure of corporate governance consists of inadequately un
qualified or audit committee members those are not having appropriate accounting and other
financial qualifications or required experience to analyse key business transactions (Lone, Ali
and Khan, 2016).
As per the view point of Tim Higgins, 2019, the biggest issues encountered by Tesla due to
inappropriate corporate governance consists of failed to pass corporate governance changes at
the electric-car maker that its directors had proposed to give stockholders a greater voice in
company matters. The issues seen in Tesla is mainly associated with Failure of boards of Tesla
over Pass Supermajority Measure It Proposed Amid Call for More Oversight further,
Shareholders also reject measure the proposal of shortening term period of boards to two years
from three. Further issues of speculation and lack of transparency is faced at the Tesla as the
CEO of Tesla, Elon Musk had made an unauthentic statement at Twitter and was unavailable for
a long period that has lead to many consequences for Tesla as the statement was not confirmed
by any of the board member (Naciti, 2019). Thus, lack of transparency and issues of speculation
is the biggest challenge that is lead by inappropriate corporate governance at Tesla.
Further, as per the opinion of Mark Matousek, 2019, the main challenges that are faced by
Tesla due to inappropriate Corporate governance consist of unexpected Layoffs at Tesla that
hampered morale of its employees along with high level of turnover of executive and departure
of talent employees. Beside this, reduction in brand image and a lost Consumer Reports
recommendation along with the SEC accuses Musk of violating their settlement lead to store
closures and investigations into deadly crashes along with enhanced controversial conference
call by its CEO that had lead to overall reduction in brand image and reputations of Tesla that is
creating negative impact on its sales and success of organisation (Kabir and Thai, 2017).
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