Corporate Governance and Organizational Design: A Management Report

This report delves into key aspects of strategic management, corporate governance, and organizational design, covering topics from stakeholder analysis to ethical considerations and competitive advantage. It begins by differentiating between stockholders and stakeholders, emphasizing the importance of stakeholder management and the processes companies adopt to address their concerns. The report examines the agency problem, exploring governance mechanisms to mitigate conflicts of interest, and outlines internal controls and strategies for fostering ethical behavior within organizations. Furthermore, the report transitions to organizational design, analyzing how it contributes to competitive advantage and the essential elements involved. It explores how a strong organizational culture promotes transparency, ethics, and competitive advantage. The report also discusses strategic planning in single and multidivisional structures, highlighting advantages and challenges. Finally, it examines how companies implement strategies at a global level and the organizational structures that support competitive advantage.

Running head: MANAGEMENT
Strategic management
Name of the student:
Name of the university:
Author note:

1
MANAGEMENT
CHAPTER 11
1. Difference between stockholder and stakeholder
Stakeholders are the ones who are affected by the profit and loss of the companies
and organizations. There are two kinds of stakeholders- internal and external. The external
stakeholders are the customers, suppliers, creditors, government agencies, unions, local
communities and the public domain (Ansoff et al., 2018). On the contrary, internal
stakeholders include stockholder, employees, managers and board members. The companies
and organizations conduct inducements for identifying the stakeholders. Along with this, the
contributions towards growth, which is considered for determining the stakeholders.
2. What process does a company adopt to go through to and respond to stakeholders'
concerns?
At the initial stage, the stakeholders' interest and concerns are identified. Along with
this, their claims on organizational activities are considered. The utility value of the services
for the customers is calculated, which adds value to the operations. As per the arguments of
Noe et al., (2017), social media is tracked for assessing the response of the stakeholders
towards the levied services. This monitoring process helps the companies and organizations
to detect prospective stakeholders. The feedback process is adopted for gaining an insight
into the approaches of the stakeholders towards the services. Sessions are conducted for
gaining an insight into the individual tastes and preferences of the stakeholders. These
responses help in detecting the challenges, which obstruct the process of responding to the
complaints of the stakeholders (Lasserre, 2017).

2
MANAGEMENT
3. What is the agency problem? What are the governance mechanisms that can be put
in place to guard against this problem?
Agency problem relates to the conflicts between stockholders and senior
management. Within this, the issue of asymmetries persists in disseminating the information.
Typical evidence of this lies in the situation when the agent possesses more knowledge than
the principal about the resources for management. Morden, (2016) is of the view that the
companies and organizations adopt agency theories for solving these conflicts. Statutory
bodies of law are involved in the process of achieving resolutions. Typical examples of this
lie in Code Determination Law, Security and Exchange Commission (SEC) and Generally
Agree upon accounting Principles (GAAP).
Governance mechanisms, used by the principals, include alignment of the incentives with the
agents and monitoring and controlling the performance of the agents. Strategic control
systems are used for formally setting the targets, measuring the performance and introducing
the feedback systems (Morschett, Schramm-Klein & Zentes, 2015).
4. Internal controls and strategies that can be implemented to ensure ethical behaviour
within a company
Code of ethics is one of the essential documents, which is needed for enhancing the
awareness of the staffs about authentic organizational behaviour. The managers ensure that
the teams practice and preach ethical conduct. Rationality and consciousness in this direction
is an initiative towards the creation of a positive organizational culture. According to Frynas
and Mellahi, (2015), one to one sessions are conducted for providing a platform to the staffs,
who hesitate to voice out their opinions in front of the other employees. This approach is an
initiative towards respecting the individualism of the employees. Setting targets and

3
MANAGEMENT
standards is beneficial for measuring the performance, which needs to be made according to
the capability of the staffs.
Chapter 12
1. How can organizational design contribute to competitive advantage? What elements
incorporate design are essential?
The organizational design reflects the hierarchical levels, which prevails in the
workplace. The essential elements of organizational design include work specialization;
departmentalization; command structure, a span of control, centralization and
decentralization and formalization of items. Collaboration between the departmental units
helps in maintaining the balance between the supply chain networks. Development of
strategy ties up these units, improving the stability in the professional relationships
(Trigeorgis & Reuer, 2017). Bifurcation of the plan is a wise step in terms of upgrading the
standards and quality of the operations. This upgradation attracts a large number of
customers, providing a higher competitive edge to the companies against contemporary
brands.
2. Describe how a strong organizational culture leads to transparency, ethics, and
competitive advantage within a company?
Culture maintained by the companies and organizations adversely affects the
purchasing power and decisions of the clients and the customers. This includes the decisions
undertaken, strategy and performance. The more transparent are the services, the more is the
loyalty, trust and dependence of the customers on the services. This transparency, in turn, is
accounted as ethical behaviour. Aguinis, Edwards and Bradley, (2017) states that adopting
fair, competitive policies is a typical exemplar of gaining higher competitive edge than the
contemporary brands. This fairness adds to the reputation of companies and organizations.

4
MANAGEMENT
3. How do corporations develop strategic plans for single or multidivisional structures?
What are some advantages and problems in implementing a multidivisional structure?
Mechanisms regarding the conversations between managers are considered for
developing strategic plans, which is helpful in terms of developing a business model, which
can e used for conducting the operations efficiently and effectively. This approach is
beneficial for gaining insight into how the business model can be improved. Along with this,
it also enhances the awareness about the elementary structure for achieving competitive
advantage. In the case of the multidivisional structure, these aspects prove beneficial in terms
of strengthening unity and coordination (Frynas & Mellahi, 2015). Diversification prevails in
the business plans, which contradicts the issues related to coordination and control of the
operations. Self-contained divisions are assistance for executing the tasks efficiently through
the supervision of corporate headquarters (Ansoff et al., 2018).
4. How do companies implement strategies at a global level? What organizational
structures help them develop a competitive advantage?
Before the implementation of strategies, the companies and organizations evaluate
whether the business model aligns with the identified needs and requirements. Upon the
achievement of adverse outcomes, measures are taken for seeking an insight into the ways
and means for improvising on the business model. The basic structure for competitive
advantage is prepared, which accompanies controlling the operations in terms of efficiency,
quality, innovation for addressing the specific needs, demands and requirements of the clients
and the customers (Frynas & Mellahi, 2015). Formal integrated mechanisms enhance the
efficiency in the operations as well as stabilize the professional relationships. This
collaboration is used for assessing whether the performance aligns with the identified and the
specified objectives. In the case of multidivisional structures, these mechanisms are

5
MANAGEMENT
beneficial for planning the strategic objectives. Functional fabrics are productive in terms of
globalizing the operations of the companies and organizations. Contacting the research and
development team adds innovation into the products and services, attracting more customers.
Executing offshore management would improve the relationship between the companies and
their external agencies (Morden, 2016). In this case, information systems are productive tools
for linking the management with the enterprise.

6
MANAGEMENT
References
Aguinis, H., Edwards, J. R., & Bradley, K. J. (2017). Improving our understanding of
moderation and mediation in strategic management research. Organizational Research
Methods, 20(4), 665-685.
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press,
USA.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Morden, T. (2016). Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management
(pp. 978-3658078836). Springer.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Trigeorgis, L., & Reuer, J. J. (2017). Real options theory in strategic management. Strategic
Management Journal, 38(1), 42-63.