Several corporate governance mechanisms can reduce these agency problems and also increase firm performance (Agrawal and Knoeber, 1996). According to the definition of the OECD (Organization for Economic Cooperation and Development, 2004), corporate governance is the mechanism by which business corporations are directed and controlled. Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other
Millstein Report to OECD (2000) further noted that the governance structure specifies the distribution of rights and responsibilities among different participants in the cooperation and specifies the rules and procedures for making decisions in corporate affairs. The participants in the corporation include stakeholders such as the board of directors, managers, shareholders, creditors and regulatory bodies among others. Still on the definition on corporate governance, Selvaggi (2008) defined corporate governance as a system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures with the intention of monitoring the actions of managers and the directors and thereby mitigating the agency risk which may stem from the misdeeds of corporate
Governance has proved an issue since people began to organize for a common purpose. Ensuring the power of organization is harnessed for the agreed purpose, rather than diverted to some other purpose appears to be a constant theme. Corporate governance investigates how to motivate and ensure an efficient management of the enterprises and involves: a set of formal and informal rules that establish certain relationships between the executive management of the company, the board of directors and the shareholders of the company, as well as other people of interest groups that have ties to the company; mechanisms through which the objectives of the company are set and are established the means of achieving those objectives and of monitoring the performance;
The physical environment of an organization, practices of human resources and staff are contains in corporate culture. It is also shows degree of importance established on different components like hierarchy, method, innovation, cooperation, rivalry, involvement in community and commitment in society. Corporate culture impacts the performance and productivity of an organization and gives way to good service to clients and quality products, affects the organization 's productivity and performance, and provides guidelines on customer care and service, product quality and safety. Additionally, It develops method od production, practices of advertising and innovation. And also Corporate culture will be different for each and every organization.
Corporate governance being referred to a system by which a company is directed and controlled (Al-Tamimi, 2012). The objective of corporate governance in business is to ensure a company is able to make better decisions. Through better decision making it enables businesses to be successful, the key is to ensure there is flow of information i.e. making sure the right information gets to the right people at the right time. Corporate governance is subdivide into elements known to be (board of directors, disclosure and transparency, executive compensation, governance structure, compliance and polices, relationship with shareholders and stakeholders).
The corporate culture is usually implied as well in the corporation's dress codes, business hours, office setup, employee turnover rate, etc. Corporate culture is heavily dependent on the values and vision of the entrepreneur. It is very much related to the vision and mission statements of a company in how the company wants to be perceived by its stakeholders and how the company wants to achieve its visions. The entrepreneur is the one responsible in how the company conducts itself and therefore is the one responsible in setting the culture of the business. The behavior, actions, and interactions of the members of an organization emerge from the meaning that the reality of that organization has for them.
- Since firms are price takers in pure competition, demand for a firm is horizontal which means they are perfectly elastic. - Therefore, demand equals to marginal revenue and also equals to average revenue and the price. PROFIT MAXIMIZATION IN PURE COMPETITION In economics, profit maximization is the short run or long run process by which a firm determines the price and output level that returns the greatest profit. There are few approaches to this problem. There are two ways to calculate the profit maximizing output quantity.
In the business world, administration structure decides the practices, states of mind, demeanor and morals that make the work society. On the off chance that an organization 's authoritative structure is entirely various leveled, with choice making force brought together at the top, the organization 's way of life will probably mirror an absence of flexibility and self-sufficiency at the lower levels. In the event that an organization 's administration structure is decentralized, with shared force and power at all levels, the way of life is prone to be more free, customized and
Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation and include the rules and procedures for making decisions in corporate affairs. Corporate governance includes the processes through which corporations' objectives are set and pursued in the context of the social, regulatory and market environment. Governance mechanisms include monitoring the actions, policies, practices and decisions of corporations, their agents and affected stakeholders. Corporate governance practices are affected by attempts to align the interests of stakeholders (Tricker, 2009) The Securities and Exchange Board of India Committee on Corporate Governance defines corporate governance as the "acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a
Chapter 1 INTRODUCTION Rationale of the Study In the academic world, the interest in corporate governance has been truly interdisciplinary, with much work being undertaken by researchers not only from economics and finance but also from law, management, and accounting (Bebchuk, Weisbach 2009). Due to a lot of scandals internationally and locally the governance of the corporation is important as the government of the countries. The researchers have studied about the real role and significance of the corporate governance in the banking sector. In fact, Kabigting (2011) said that The lack of corporate governance is one of the reasons cited for the global financial crisis of 2008. There are some studies that focused on the issues & prospects