'In your opinion, what are the key corporate governance issues Essay

'In your opinion, what are the key corporate governance issues presented in this case and why' - Essay Example The basic role of corporate governance deals with the governance process of the corporation as well as how the management relates with several parties that are interested in the operations of the corporation, namely; shareholders, employees, directors, customers, creditors and suppliers. Every organization desires to have a good corporate governance that is not out to only minimize the possible risks of fraud and failure but also to improve the economic performance and its investment climate. Such governance relates public savings, investment, integrity and market confidence making corporate governance an important inclusion in order to achieve financial stability and economic growth for a long time. The corporation in question is the Royal Dutch/Shell Group which has remained the third largest production and oil production in the world. The size of the corporation makes corporate governance an important factor as it employs more than 119, 000 employees in more than 145 countries (Ev ans, 2004). For decades, Shell/Royal Dutch has been keen to maintain a good position among the top most global corporations. Its corporate governance has mostly been interested in the stability of the corporation in relation to its operations and name. ... ation Governance Issues The declaration by Royal Dutch/Shell Group that it was facing inflated oil reserves and that it intended to downgrade approximately four billion oil and gas reserves resulted to a furor among industry analysts as well as its investors who came out strongly blaming the opaque and complex governance structure that was twin-board for the issues facing the group. Analysts and experts claimed that this type of structure lacked proper accountability as well as resulted to financial manipulations (Hanney, 2004). The main corporation issue facing the Royal Dutch/Shell Group is thus its governance structure that entailed a twin board. This structure is believed to have had several loopholes in its governance thus the several issues associated with the group. The consequent of the above was a series of turmoil for the group. The public announcement of reserves reduction claimed that the company was fond of blaming human failings through its top executives and not come u p with critics on the weaknesses of the structure of Shell (Malin, 2004). The reaction of the group following the mounting pressure from its investors was to institute reviews and recognize and appreciated that it had complicated the organization in unusual ways but still insisted that it is the same structure that had taken the group to the greatest heights for more than one hundred years thus is justified by the legal regimes and differing tax. The issues facing Shell are not just a problem of the group but an issue facing the international gas and oil industry. Royal Dutch/Shell Group Governance Structure The main issue facing the governance of the group goes up to some of its senior executives who recognize that the corporation reserves were overstated. In addition to this realization,

Analysis of British Airways Essay Example | Topics and Well Written Essays - 1000 words

Analysis of British Airways - Essay Example I will be able to help the company in its decision-making processes specifically on the strategic path that it would take. This is because I have been able to acquire knowledge and skills in the fields of general management, strategic management, and corporate finance. I am particularly interested in joining the management and planning team which primarily determines the core competencies, strengths, weaknesses, and the needs of British Airways. I can surely be instrumental in shaping the strategic path of the organization with my hard-earned knowledge and skill in assessing the internal performance of the company as well as the external factors in its external environment, I believe that in landing a job, a potential employee must only be imbued with the technical skills needed for the position. One of the most important things to consider is the persons high level of motivation to excel in the field and his capacity to deal with the diverse individual in the business organization. Joining British Airways has been one of my greatest dreams and I am highly passionate to aid in the company's success. I am highly motivated to excel in this career, wanting not just a mere position but with commitment and devotion, I would like to pursue growth and excellence. I believe that I will be able to stand the pressure of joining a diverse workforce because I am trained to be open-minded and respectful of individuals outside my color, culture, value, and opinion. In order to prove that I will be effective in my chose position, I will be giving a brief analysis of British Airways current performance through the employment of strategic management tools. First, I will be focusing on the business organizations financial performance by a financial ratio analysis. Next, I will look at the company's internal and external environment by the identification of strengths, weaknesses, opportunities, and threats.

Marketing Plan for a Fair Trade Company Essay Example | Topics and Well Written Essays - 2250 words

Marketing Plan for a Fair Trade Company - Essay Example This essay stresses that business firms in the modern world face cut throat competition among themselves. It is almost impossible for a firm to achieve success in business in the modern world without an effective marketing plan. A business firm can only enjoy a broad customer base if it sets innovative and planned marketing strategies. A fair trading company is a company that involves in 100% just business transactions. This essay will enumerate an efficient marketing plan for a hypothetical fair trading firm in the confectionary industry. This paper makes a conclusion that since chocolates are mainly liked by children, while beginning its business Chocolies must adopt the program of free sampling in different schools in U.K. The enrolment rate for primary and secondary education in U.K. is very high. Thus, the program of free sampling would be expensive for Chocolies at the initial stage, but would surely help it to introduce its chocolates among almost 90% of children in U.K., who are potential buyers of chocolates (KPMG, 2012). The fair trading business firm may also sponsor many junior sports events. Sports events are not only watched by many viewers but also covered by social media. Sponsoring on such events would help the company enjoy a broad customer base for its chocolates. This report will concentrate on introducing a marketing plan for a hypothetical Fait Trading Company in the market of United Kingdom (U.K.). Situation Analysis The essay will consider the SWOT and PESTLE analysis for Chocolies (fair trading company). SWOT Strengths The biggest strength of the company is the growing consumers demand in U.K. confectionary industry. Right from its inception, the company would experience a broad customer base already parked in the U.K. confectionary industry. The chocolate confectionary business was worth approximately â‚ ¬ 5.41 billion in 2011, rising by almost 2.7% since 2007 (Sweet Retailing, 2012). Moreover, fair trading principles would surely benefit the brand popularity and prestige of the company. Weaknesses The fair trading company would have to accumulate lot of finances to succeed in its business and compete with the other potential rivals in the industry. The confectionary industry has other famous Fair Trading chocolate firms like the Devine Chocolate operating successfully in the U.K. market. Due to the rise in Diet conscious consumers, the aggregate demand for chocolates has fallen in market in the recent years. Moreover, the company would follow fair trading principles, as it would provide social welfare benefits and introduce fair trade prices for its chocolates; these policies would increase the cost of its chocolates. Cocoa beans are required to make chocolates; its total cultivable land availability is low. Disturbances in weather can often create problem for the company, as bargaining power of the suppliers would increase with such problems. The consumers may also feel that the company following fair trading prin

Analysis of British Airways Essay Example | Topics and Well Written Essays - 1000 words

Analysis of British Airways - Essay Example I will be able to help the company in its decision-making processes specifically on the strategic path that it would take. This is because I have been able to acquire knowledge and skills in the fields of general management, strategic management, and corporate finance. I am particularly interested in joining the management and planning team which primarily determines the core competencies, strengths, weaknesses, and the needs of British Airways. I can surely be instrumental in shaping the strategic path of the organization with my hard-earned knowledge and skill in assessing the internal performance of the company as well as the external factors in its external environment, I believe that in landing a job, a potential employee must only be imbued with the technical skills needed for the position. One of the most important things to consider is the persons high level of motivation to excel in the field and his capacity to deal with the diverse individual in the business organization. Joining British Airways has been one of my greatest dreams and I am highly passionate to aid in the company's success. I am highly motivated to excel in this career, wanting not just a mere position but with commitment and devotion, I would like to pursue growth and excellence. I believe that I will be able to stand the pressure of joining a diverse workforce because I am trained to be open-minded and respectful of individuals outside my color, culture, value, and opinion. In order to prove that I will be effective in my chose position, I will be giving a brief analysis of British Airways current performance through the employment of strategic management tools. First, I will be focusing on the business organizations financial performance by a financial ratio analysis. Next, I will look at the company's internal and external environment by the identification of strengths, weaknesses, opportunities, and threats.

Riordan Manufacturing Essay Example | Topics and Well Written Essays - 500 words

Riordan Manufacturing - Essay Example The first and the foremost requirement is to keep track of the information regarding past sales and this is deemed important as it helps keep track of the income and sales in addition to enabling the company to provide better services to the customer. Another important aspect is that the migration towards the CRM system will reduce the storage costs by huge margins. In addition to storing information concerning past sales, the company is also desirous of having all details concerned with market surveys to be stored in the new information system that is proposed to be developed as it enabled the company to refer past trends with ease and accuracy thereby enabling it to take the appropriate decisions. A major requirement of the new software system is that it must provide an integrated environment wherein all salespersons would be able to maintain their individual information, but the data would always be available so that need of the customer can be better anticipated. The company is also desirous of using the new system that is

The Handmaids Tale - short summary Essay Example for Free

The Handmaids Tale short summary Essay The novel The Handmaids Tale written by Margret Atwood is about how the government chose to control the way the community was run and control the lives of men and women. The novel tells the story from the perspective of a middle-aged woman named Offred who questions societys accepted beliefs and conventions. Offred is a handmaid in the Republic of Gilead who is constantly questioning the government beliefs and rules. Her character pushes the limits set out by the government. This is thoroughly illustrated through her defiance of against the social conventions, her methods of challenging them and the final outcome of her challenge. Firstly, Offred challenges many laws within The Handmaids Tale including socializing with the commander and Nick, and being in the sitting room. Handmaids are a class who are not to socialize with the commander; Offred explains, Its forbidden for us to be alone with the commanders (Atwood 128). She spends a large amount of time with the commander although she is well aware of the laws within the community. Being a handmaid Offred is not allowed into the sitting room. One night she wanders down to the sitting room to try something new, she is there to be independent; she likes to be on her own. I like this. I am doing something, on my own. The active Tense. Tensed. What I would like to steal is a knife from the kitchen, but Im not ready for that (Atwood 92). At this point Nick interrupts her. Nick and Offred are not allowed to associate with each other. I freeze, white was a mistake. Im snow in moonlight, even in the dark (Atwood 92). She breaks laws, knows what she is doing to be wrong but her need to test the laws convinces her to proceed. Secondly, the novel indicates that Offred breaks many laws by spending time alone with the commanders and her presence in the sitting room with Nick. Offred visits with the commander and plays scrabble with him. Id like you to play a game of Scrabble with me. he says (Atwood 130). In playing scrabble she breaks the law against handmaids spending independent time with commanders without the supervision of the wife. One night she heads down into the sitting room to do something rebellious. She has the thought of stealing. In the wood at midnight, magic flower. A withered daffodil with daffodils will soon be thrown out (Atwood 92). Shortly after Nick interrupts her. He puts his hand on my arm, pulls me against him, his mouth on mine, what else comes from such denial? Without a word. Both of us shaking, how Id like to. In Serenas parlour, with the direct flowers on the Chinese carpet, his thin body My hand goes down I could unbutton, and then. But its too dangerous (Atwood 92) Although she is cautious about her choices she still breaks the laws, she knows what she is doing and she still continues. Finally, while ignoring the laws, Offred gains many things including the need for and the suffering, excitement, laughter and love of a strong friendship. After her interaction with Nick she becomes confused and anxious You can wet the rim of a glass. This is what I feel like: this sound of glass. I feel like the word shatter. I want to be with someone (Atwood 97). She is afraid. She does not know what to think about this passion she is having. But this is wrong; nobody dies from lack of sex. Its lack of love we die from. There is nobody her I can love, all the people I could love are dead or elsewhere. Who knows where they are or what their names are now? They might as well be nowhere, as I am for them. (Atwood 97) The friendship she gains with the commander affects her in powerful ways, she begins to feel differently about herself. I am thirty-three years old. I have brown hair. I stand five seven without shoes. I have trouble remembering what I used to look like. I have viable ovaries. I have one more chance Circumstances have altered (Atwood 135). It is shown that her actions cause her confusion and she is in a state where she had begun to have hope. In conclusion, the author Margret Atwood follows the pattern of fictional novels with The Handmaids Tale by having the main character, Offred, constantly questioning the social beliefs and conventions in the Republic of Gilead. Offreds want for a better life is illustrated through her challenges against the social standards, her methods of testing them and the final outcome of her defiance. Sarah Driscoll January 17, 2005 Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Margaret Atwood section.

The Price Elasticity Of Moisturizing Cream

The Price Elasticity Of Moisturizing Cream Considering the above table, we find that the quantity demanded has increased from P0 to P4. But we do not see a significant decrease in the price of the product. Does that mean that moisturizing cream is price inelastic? The answer to the question is NO. Moisturizing cream is definitely price elastic. But price is not the only factor that affects the demand of the cream. The other major factor that affects the quantity demanded is Advertising cost. Moisturizing cream can be considered as a non essential luxury durable good. According to Sethuram and Tellis ( in Farnham 2010,p 96), durable goods have lower price elasticity than non-durable goods. Usually consumers relate a higher price of durable good with a high quality. Hence they can pay higher price for a product. The non durable goods are more price elastic since consumers are not ready to pay more price for an item that will not last for a long time. According to the marketing study of Sethuraman and Tellis (in Farnham 2010 ; p 97) producers should concentrate their strategies on advertising policies for cosmetics, luxury goods and new products. Higher advertising cost will help in creation of brand value and increase the sales of the product. Higher advertising will project the superiority of the brand with respect to the other brands (if done correctly). As seen from the table, the demand curve drawn would have positive slope. A demand curve with positive slope is common in markets that exhibit Conspicuous Consumption and the products that are categorized as Veblen goods. In the game, the highest market shares were experienced by firms that had the highest advertising costs. Considering the performance of the best 2 firms on the basis of profit and market share for five periods of GRITAIN MOISTURIZING CREAM INDUSTRY: It can be clearly seen that the market share is influenced by the advertising cost. In P1, firm 38 had a market share of 32.8% though its price was much higher than firm 35. This shows that when the advertising is higher, the quantity demanded for products like moisturizing cream and other beauty products is higher, irrespective of the country. Let us analyse the elasticity of Cement by considering the PIELAND CEMENT INDUSTRY. Again considering the performance of the best 2 firms in the first five periods on the basis of market share and profit we have: On considering P2, it can be found out that the market share of firm 7 is much higher than its closest competitor firm 9 in spite of the fact that firm 9 spent heavily on advertising. This shows that consumers demand more units of cement if it is cheaper, making it highly price sensitive. It has a low price elasticity of demand. It was observed that making profit was highly difficult in the cement industry. A right mix of advertising and pricing strategy was required. A very low price would help in achieving a good market share but would make it very difficult to break even. According to Dr. Divina M. Edralin (2004) The cement industry is highly capital-intensive, as it needs substantial investments in fixed assets like plant and equipment. The industrys main product is characterized by low price elasticity of demand, limited shelf life, and expensive handling and transportation costs for imports. According to Dr Edralin, globalization has provided opportunities to transnational cement corporations to monopolize the worlds cement industry by managing the economies of scale because of their large capital investments and thus making it difficult for smaller domestic firms/factories producing cement. PART B: PRODUCTION AND COST ANALYSIS (SHORT RUN AND LONG RUN) SHORT RUN Considering the firm 28 in Pieland Moisturizing Cream Industry, the short run cost functions can be interpreted by looking at the total fixed and variable cost, average fixed and variable cost. The functioning of the firms of various industries from P0 to P4 can be considered as short run as the firms were not allowed to increase their capacity. Thus the capital input remains constant in those periods. Fixed Costs = Overhead costs + Interest on negative balance + advertising costs + depreciation (These costs are not related to the production). As advertising costs have increased because of managerial decisions, they can be categorized as discretionary-fixed costs. Depreciation is considered as a fixed cost because it is calculated on the basis of time and not on the basis of number of units that a machine produces. Variable costs = $2 per pot of moisturizing cream Depreciation is 5% per period Profit calculation was done as total revenue total costs If we combine the above two periods for firm 28, we have Total Revenue = 183200(period 1) + 252000(period 2) = $435200 Total Costs = 159800(period 1) + 191698(period 2) = $351498 Total Profit = $83702 Total sales = 46900 pots Profit per pot (combined P1 and P2)= $1.78 Profit for P1= 23400 (183200-159800) => Profit per pot = 23400/22900 = $1.02 Profit for P2=60302 (252000-191698) => Profit per pot = 60302/24000 = $2.51 As we can see, the profit has increased in the period 2. In real life situations where most of the durable products are quite price elastic, the managers have constraints of not increasing the product price (unlike the game). The costs of running the firm increases gradually as more competitors enter the industry and companies spend more on advertising costs. This costs the profits to reduce after some time and the firms are forced to innovate new products and strategies. This can be overcome by the economies of scale as well as by increasing the price per unit. In a luxury non-essential item such as moisturizing cream, it can be done by increasing the price per unit as moisturizing cream is more advertisement elastic and consumers are ready to pay a higher price. This can be seen in the prices of the best performing teams of Pieland moisturizing cream industry. Just 5 periods have been shown as the firms had the provision to increase their capacity from P5. If we consider the Pieland Cement Industry and analyse the pricing strategy of the best two firms we can interpret that to survive in the industry, it is very essential to keep the price low as cement is not very advertisement elastic and highly price elastic. This makes cement industry in any country highly vulnerable to competition. Hence the cement firms have to work in collusion to survive in the market. The cartelisation mode of functioning is very common in this industry. The case of collusion is not seen in the game as two out of four firms have made huge losses. LONG RUN According to Farnham (2010:167) moisturizing cream industry in the game has adopted the capital intensive method of production because there is a provision of buying large large quantities of capital investment. Considering the firms of Pieland Moisturizing Cream, a comparison can be done between capacities of two firms: one which did not increase the capacity and the other which increased the capacity. The cost per unit for each of the above periods for the firms would be: The cost per unit is calculated as (Overhead+Variable costs)/ Units produced for simplicity. The cost due to negative interest and the advertising cost have not been considered for the calculation. Above it can be seen that the cost per unit in P1 for firm 25 is more than firm 28. This is because the capacity utilization of firm 25 is lesser than firm 28. Firm 25 produced 12000 units in P1 whereas firm 28 produced 18000 units in P1. As it can be seen in Table B.7, the cost per unit for firm 28 has reduced consistently from P1 to P7. It is easier for firm 28 to breakeven quickly and sell the units at reduced prices and drive firm 25 out of competition. However, it was observed that when the capacity of the firm was increased from 45000 to 50000 units, the cost per unit came out to be the same $3.87. This can be correlated with the graph of Minimum Efficient Scale. According to Farnham(2010:178), the Long Run Average Cost curve becomes essentially flat with neither further economies nor diseconomies of scale. $4.11 $3.91 $3.87 Q=35000 units ( Minimum Efficient Scale ) The Long run average cost curve for firm 28 depicting Minimum Efficient Scale. Capacity Utilization Ratio (Production/Capacity) of Firm 28 is higher than Firm 25 in Pieland Moisturizing Cream Industry. The stocks not sold are also used to determine whether the firm needs to increase its capacity or not. Firm 28 has a higher capacity utilization ratio and has sold stock in most of its periods. So it gives it the incentive to expand its through investment in new structures and investment. Usually a ratio higher than 85% gives the incentive to increase the capacity according to Farnham (2010: p 352). For firm 28 the ratio is more than 95%. PART C: OLIGOPOLY AND GAME THEORY The game theory models can be linked to the PIELAND MOISTURIZING CREAM industry. Moisturizing cream is highly advertisement elastic. This makes all the firms in the industry incur high advertising costs in each period. Consider the advertising costs for some of the periods for various firms: As it can be seen, all the firms in the industry have constantly increased their advertising costs. It started with $30000 at P0 and ended up in millions. Majority of the firms ( 3 out of 5) suffered huge losses because of this. Advertising heavily in every period was highly essential to survive the competition and sell the product (referring table A.1 above). Thus in every period advertising heavily was the dominant strategy for each firm. If the firms had co-ordinated their strategies, the advertising costs would not have reached millions. They could have sold the cream pots at higher price with minimum advertising cost. All firms ended up worse off than if they had been able to co-ordinate their strategies. All firms became prisoners of their own strategy particularly firm 25, 26 and 27 considering the final profit figure in table C.2 (Farnham 2010: p258). Though firms 28 and 29 made profits their profits could have been higher if the firms in the industry had co-ordinated and followed a co-operative oligopoly model. But the fear of punishment prevented the firms to collude (punishment from anti-trust/anti-cartel in real world). If the advertising costs of Firm 28 are considered in particular, they have increased with every period. However, the advertising cost in P14 of Firm 28 was the lowest in the group. It was known well in advance that P14 would be the final period of the game. If Firm Id 28 had kept advertising costs similar to the other firms and for some reason it would have been unable to have good sales, my firm (firm 28) would have incurred huge loss. The lesser revenue would not have negated the effect of high advertising cost and my existing positive balance would have turned into negative. This made me reduce the advertising. The price was also brought down ( as seen in table C.3). The highest risk that Firm 28 faced during this period was : Overhead cost = (-$84213) Variable Cost = (-$63000) (production was brought down as lesser sales were anticipated) Advertising = (-$100000) Total = (-$247213) The positive interest was $2897. Thus the net risk becomes (-$244316). The balance in firm 28 was $289728.51 as on P13. Thus if there are no sales in P14, there is still a positive balance of around $45412.51 ($289728.51 $244316). I considered this strategy as the best for my firm regardless of the strategy that other firms choose. I consider this scenario as the Nash Equilibrium because from a set of strategies, I have chosen the best strategy considering that the other firms will also choose their respective best strategy (Farnham 2010: p 258). PART D: IMPACT OF MACROECONOMY The macroeconomic scenario can be evaluated on the basis of the total quantity demanded for a particular product. Let us consider the Pieland and Gritain Moisturizing cream industry: As it can be seen from the table, the quantity demanded for units in Pieland as well as Gritain has grown in each period (except in P14 for Pieland). However, the quantity demanded curve shows a steep slope in Pieland in comparison to Gritain. This shows that the growth rate is higher in developing countries than the developed ones. The quantity demanded has a lesser slope for periods between P1-P4 since the monetary policy was deflationary. The consumption of a non essential luxury item such as moisturizing cream is less. However, from P5 the consumption increased as the monetary policy was reflationary (interest rates were cut) causing people to spend more on cosmetics. Reflationary fiscal policy causes the reduction of either the direct or indirect taxes. This leads the people to consume more. The reflationary policy caused accelerated growth from period 10. But accelerated growth caused inflation. It can be inferred from the graph that the governments and banks increased the taxes and interest rates. This brought the consumption down which is apparent from P13-P14. The effects of fiscal and monetary policy were more easily visible on emerging/developing economy of Pieland than on Gritain since Pieland has a higher growth rate. A suitable monetary and fiscal policy will affect the markets of Pieland more than Gritain.