Corporate Strategy and Governance

CORPORATE STRATEGY AND
GOVERNANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW................................................................................................................2
RESEARCH METHODS................................................................................................................7
DATA ANALYSIS AND INTERPRETATION...........................................................................10
RECOMMENDATION AND ACTION PLAN............................................................................18
CONCLUSION .............................................................................................................................22
REFERENCES..............................................................................................................................23
APPENDIX....................................................................................................................................24
Questionnaire.............................................................................................................................24

INTRODUCTION
Background
Corporate governance is the combination of rules, laws and processes through which
organisations are being regulated, operated and controlled. It encompasses the internal as well as
external factors affecting interest of stakeholders such as customers, shareholder, government,
suppliers & the management. Directors of the company have responsibility of creating
frameworks for corporate governance that is aligned best with objectives of the firm. Specific
processes which could be outlined in corporate governance includes performance measurement,
action plan, disclosure practices, compensation decisions, procedures to reconcile the conflict of
interests, dividend policies and implicit & explicit contracts among stakeholders &company.
An effective and good corporate governance has enforced defined structure which is
working for benefits of all that are concerned assuring that enterprise adheres to the accepted
level of ethical standards, formal laws and best practices (Yermack, 2017). On the other bad
corporate governance could be described as unclear, non compliant as well as poorly structured
that could damage financial health and status of the business. Stakeholders have trust over the
audit reports of auditors and corporate that don not have coordination with the auditors or have
not adequate auditors considering the scale could produce spurious results. Good corporate
governance have far reaching impact over transparency, accountability and the of the system.
Review of the Problem/ issue of the strategy or corporate governance.
Corporate governance is used for describing balance between the participants in
corporate structure having interest in manner in which organisation is running. Corporate
governance have direct impact over the performance affecting the profitability and reputation of
the organisation. There are issues related with the corporate governance that are required to be
considered by corporation. Conflict of interest is the major issue associated with corporate
governance in cases where executives have financial interests conflicting with objectives.
Oversight issues that requires the deep monitoring and control of the executives and directors
over the daily operations having direct impact over the performance and the ways in which
objectives are being achieved (Samra, 2016). There are further issues such as issues of
accountability, transparency of operations and the ethical violations that have high impact over
operating effectiveness of the organisation.
Research Aim
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“To determine impact of corporate governance on performance of organisational
performance.” A study on Walmart.
Research Objectives
 To understand the concept of the Corporate governance.
 To identify impact of corporate governance on performance level of Walmart.
 To determine the issues related to corporate governance in Walmart company.
Research Questions
 What is corporate governance?
 What is impact of corporate governance over performance level of Walmart?
 What are different issues related with corporate governance in Walmart company?
Rationale
The research on corporate governance has been conducted as the topic provides with non
factors that affect the profitability and performance of the organisation. These factors are often
ignored by the companies and focus is given on only financial factors. Corporate governance
have equivalent importance as of financial factors on the performance of company. Along with
this there is academic interest for conducting research on corporate governance.
LITERATURE REVIEW
Theme 1 : Concept of Corporate Governance
In the view of Jacoby, (2018) Corporate governance is reviewed as system using which
organisations are being controlled & directed. Corporate governance structure specifies the
distribution of the roles & responsibilities between the various participants of company like
shareholders, managers and the other stakeholders. This involves the rules & procedures to make
decisions over corporate affairs. It provides the company with structures via which goals are
defined and means to attain the objectives & for monitoring the performance. It is also concerned
with management of operating, structuring and controlling company with view of achieving
long term goals of firm. It prescribes the code of conduct for the stakeholders ensuring effective
accountability.
Corporate governance has the focus at maximising value of shareholders ethically legally
& sustainably ensuring fairness for every stakeholder such as employees, vendors, partners,
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investors and community. It reflects the organisational policies, culture and how they are dealing
with stakeholders and commitment for values.
Good corporate governance has number of important objectives to be served. This
enhances the performance by having an efficient and effective environment motivating managers
for maximising returns return on investments, increasing the operational efficiency and long term
productive growth. This could be describes as systematic approach used for controlling and
directing the companies for enhancing wealth generation capacity as stated by McCahery,
Sautner. and Starks, (2016). Corporations have employed significant resources and funds which
requires the governance process to ensure that firms are manages in ways meeting the aspiration
of the stakeholder and the societal expectations. It has been stated by Dimopoulos and Wagner,
(2016) that corporate over principles or fairness, integrity, accountability, equity transparency
and the commitment for values. Practices of corporate governance stem from mindset and culture
being followed in the organisation. Stakeholders around the globe are interested over practices &
performance of the companies.
Corporate governance is based over principles which organisation are required to follow.
It requires company to treat the shareholders fairly and equally. It ensures that the shareholders
of company are aware of the rights & when they could exercise the rights. Contractual, legal as
well as social obligations of the non shareholders stakeholder should be upheld. It involves
discussing the pertinent data and information with the staff, vendors, investors & the society.
Corporate governance requires board of directors to maintaining the commitment for ensuring
fairness, accountability, transparency and diversity. Companies create defined code of conducts
for the boards &executives and for appointing the candidates only if candidates are meeting the
standards.
Corporate governance brings methods and order in process of decision making and the
allocation of responsibilities. Company requires to pay attention over he vision and mission
rather than personal interests of top officers. Benefits of the corporate governance are hard to
quantify on the short range. Introduction of the corporate governance have publicity images or
snob values where companies with governance get special preference and are considered as
forward looking and prosperous in view of Schmidt and Fahlenbrach, (2017). Trust generated
through corporate governance improves the participative performance of organisation. Firm with
higher performance receives increased financial capital and other resources.
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Corporate governance intends to increase accountability of the company avoiding
massive disasters before they are occurring. ownership structure of the companies is changing
lot. Mutual funds and public financial institutions are major shareholders of many of the
companies. They are having effective governance over management of the companies. It forces
management for using corporate governance for putting pressures over management for
becoming more transparent, efficient and accountable. Corporate governance requires
management for making consumer friendly projects and policies for protecting social groups for
protecting environment. For complying with the corporate social responsibilities practices rules
and regulations are framed by the effective governance in the company. Corporate governance
established effective monitoring and control practices at various levels of the enterprise ensuring
that the frauds, scandals and corrupt practices are recognised at early stage. It is also essential for
preventing the frauds that are being committed in the organisation. Effective corporate
governance is required for protecting the rights of different shareholders & other stakeholders in
event of the mergers & takeovers in the view of Hussain, Rigoni and Orij, (2018).
In current business structure board members and upper level management play an
important role for passing on chain of commands and rules to lower level of organisation.
Corporate governance is highly effective and are not to be instituted as guidelines but strictly as
the regulations to be adhered. There is positive relationship among social responsibility &
corporate governance. Firms with effective structure tends to have lower risks. Effective
governance results in higher returns and in market capitalisation. Corporations are able to
maintain their growth even in low times without reflecting the effects over financial performance
of company. It requires the company to followed structures with set rules and regulation where
the operations are carried out with increase efficiency making optimum utilisation of the
resources. Companies are achieving signifiant growth and success by strictly applying the
corporate governance regulations and keeping all the factors into consideration that could
influence the operations and performance of business. Management is able to prepare the
company in advance about the risks and uncertainties that company may face in future.
Theme 2 : Impact of corporate governance on the performance of organisation.
Performance refers to ability of organisation in achieving the mission through sound
management, string governance and persistent rededication for achieving the goals and
objectives. Dignam and Galanis, (2016) states initiatives of the firm performance help
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