Internal And External Factors That Hinder Future Development Of Effective Corporate Governance

Internal And External Factors That Hinder Future Development Of Effective Corporate Governance

Length: 969 words (2.8 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

1.0 Introduction
This report analyses the internal and external factors that hinder future development of effective corporate governance. The analysis will utilize relevant theories and models such as shareholder theory, stewardship theory, PESTEL and the German model to elaborate of the topic. I will begin by evaluating effective corporate governance and this will be followed by internal and external factors that influence its development. The findings will applied on Volkswagen company, which has experienced poor corporate governance in recent past. The application will focus on its corporate structure, corporate policies and corporate behaviour. Lastly, a recommendation will be provided on how to improve corporate governance at the Volkswagen.
2.0 Effective Corporate Governance
Corporate governance is defined as the systems of rules, laws, and practices that guide the operations of a firm (Aras 2016, p. 164). The laws and rules of a company are meant to protect the firm from outcomes of poor governance such as embezzlement of funds or corruption that create scandals. Siemens experienced a bribery scandal (O’Reilly & Matussek 2008), while Enron was involved in embezzlement of funds that was disguised through misrepresentation of earnings (Petrick & Scherer 2003, p. 37). Both companies struggled with poor reputation and loss of revenues at the height of the scandal. While the reasons for company lapses are varied some as result of greed among owners or the need to maximize shareholder revenues, poor corporate governance is usually at the heart of the problem. One of the reasons is because corporate governance entails harmonizing the interests of the corporation and those of the stakeholders some of whom include shareho...

... middle of paper ...

...ntrol measures, and isolation of duties (p. 161). Yet, while internal control promotes acceptable practices, the onus is still with the individual entrusted to follow the practices. The stewardship theory supports this notion by arguing that managers have a moral and ethical obligation to act in a transparent and responsible manner as stewards of resources they manage (Fernando 2009, p. 49). This reflects back on the character of individuals elected to the BOD. It might seem subtle but members of the BOD control major decisions and may be susceptible to misuse it. For instance, when the higher ownership of an individual eclipses a certain threshold, this may cause the issue of tunneling and inefficiency. It also reflects back on the shareholders who elect them, thus, divulging the overall perspective, attitude and approach of all the internal stakeholders.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on Internal And External Within The Classroom

- Due to various contexts, internal and external within the classroom, there is a need to consider all the implications these have on teaching. For example, student’s development, the environment and how the curriculum will be delivered needs to be considered in order to assist in the students learning as well as planning for the four week block practicum. The internal classroom environment has a significant impact on teaching and learning. In Miss Dowson’s year three classroom, the chairs and desks are arranged into rows....   [tags: Education, Teacher, Educational psychology]

Better Essays
866 words (2.5 pages)

External, Internal, and Construct Validity Essay

- There are two classes of factors that jeopardize the validity of research findings they are internal and external. Internal validity is the extent to which a test measures what it claims to measure. External validity on the other hand, is the extent to which the results of a research study can be generalized to other groups, times, and settings (Trochim and Donnelly, 2008). Internal validity is threatened whenever there exists the possibility that alternative causes, other than the independent variable, are responsible for the effect....   [tags: Research Analysis ]

Better Essays
1227 words (3.5 pages)

External, Internal, and Construct Validity Essay

- Validity pertains to both the methods and the design of a research study and indicates “the degree with which correct inferences can be made from the results of a research study” (Indiana University Of Pennsylvania, 2010). According to Trochim and Donnelly, there are four types of validity including conclusion, internal, construct, and external (2008). In this assignment, three of these types will be discussed. Internal validity is the extent to which a test measures what it claims to measure. External validity on the other hand, is the extent to which the results of a research study can be generalized to other groups, other times, and other settings....   [tags: Research Analysis ]

Better Essays
1331 words (3.8 pages)

Internal Controls Of Sales And Cash Business Essays

- The class learning objectives for the period of weeks three through five focused on mitigating risk in business processes through the design of internal controls. The business process covered were sales, sales returns, and cash collection processes, as well as purchases, payroll, and fixed assets. Also covered was risk prevention internal controls based on the authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and reconciliation....   [tags: Internal control, Internal audit, Audit, Auditing]

Better Essays
922 words (2.6 pages)

Woolworths' Choice for Internal and External Communication Essay

- Question 1 When studying communications one will realize that different companies or organizations communicate internally and externally with their different target audiences. Therefore, we are exposed to different kinds of corporate publications. These can be internal and/or external publications. Corporate publications intend to communicate or rather aim to convey certain messages to different messages to different target audiences. For example, internal publications are publications aimed for employees and stakeholders, whereas external publications are aimed to communicate with customers....   [tags: corporate practices]

Better Essays
1414 words (4 pages)

Essay on Internal And External Factors Of Management

- Annually, Fortune magazine releases a list of the top 500 largest companies in the United States (Time Warner Co., 2008). Being ranked no. 44 in 2008, Microsoft has increased its revenues 15.4% since 2006 because of its continued efforts to release latest technology (Time Warner Co., 2008). To understand how Microsoft continues to lead in profits, sales and technology, the consumer must realize internal and external factors influence how Microsoft performs and operates. In depth, Microsoft’s planning functions are influenced by the consumer’s need, which continues to influence Microsoft’s products and services....   [tags: Business Management]

Free Essays
1364 words (3.9 pages)

Essay on The 7 Habits Of Highly Effective People

- In life there are many factors that compose how each of us experiences life events. Key factors in this determination are either internal (controlled by your mind) while others are external (require your internal views and paradigms to change). These factors are unknown to most, due to the lenses they view life threw. These lenses (that are taught to us since birth) are a major controlling factor in the way we see our life roles, influence, judgment, habits, and other self-talks that happen on a daily basis....   [tags: The Seven Habits of Highly Effective People]

Better Essays
899 words (2.6 pages)

Walmart Human Resource Management Uses Internal And External Recruitment Processes

- At Walmart human resource management uses internal and external recruitment processes when hiring for all positions. Walmart uses three major internal recruitment processes, current employees, trainees, and transfers. For external recruiting, respondents to job advertisements, campuses, and previous applicants are most significant to the firm. Of the three, respondents to job advertisements is the largest because Walmart posts job openings regularly on their website. Also they have introduced a new online recruitment website and applicant tracking system....   [tags: Employment, Recruitment, Management]

Better Essays
1384 words (4 pages)

Critical Analysis of Internal Resources and External Environment of Wal-Mart

- ... b. With strong supply chain network with over 4k trucks enables Wal-Mart to run independent logistics network c. Private labels introduced by Wal-Mart also drive bargaining power of suppliers low. 5. Bargaining power of Buyers- Moderate to High a. Price-sensitive buyers coupled with low or nil switching cost provides high bargaining power of the buyers. b. Brand differentiation and product differentiation in the consumer durable industry is les leading to convenient shopping. Internal Resources Below is an analysis based on resourced based view model (RBV) which will help to determine the sustainability of core competencies(Peteraf, M....   [tags: competetive, strategic, brands]

Better Essays
1025 words (2.9 pages)

What's Personal Motivation Essay

- External motivation comes from outside of our own brain. When you want to do a job because it will impress someone, or because you'll receive a prize for it, or because you'll be punished if you don't--that's an inducement that comes from outside your internal value system. Internal motivation is the driving force that comes from inside us, and causes us to do a good job because we feel good about ourselves when we accomplish something. When we are internally motivated, we operate according to our own values....   [tags: external motivation, effective leader]

Better Essays
872 words (2.5 pages)