The main factors that contribute to agency problems are Separation of ownership and control, Managerial goals vs. shareholder goals and Asymmetric information. Share prices drop as Steve Jobs did not want to step down or let the shareholder know the full information relating to his illness and ability to work. Garratt (1996) cites the one-man rule as being the key symptoms of corporate collapse: Having a person with absolute corporate power may be beneficial in the short-term, but may, in the long-term be disabling for the organisation. This seemed to be the case for Steve Jobs. The Directorial Dilemma states that: “The board must be sensitive to the pressures of short-term, local issues and yet be informed of the broader trends and competition”.
United States. “It is plain that these requirements are imposed in order to govern the details of defendants’ management of their local business.” Hughes is talking about how the requirements are imposed to govern manage their business. “Their wages have no direct relation to interstate commerce.” Huges is saying people who are working wages that don’t have any relations to interstate commerce. Document G is from a radio broadcast by John L. Lewis on December 13, 1936. “The strikes which have broken out… especially in the automobile industry, are due to such “employee trouble”.” In this sentence Lewis is blaming the strikes on employee trouble.
So if Charlie Hugel and the shareholders wanted the best offer for the shares why didn’t they take the Ross Johnsons offer probably because they wanted to make sure Ross Johnson didn’t get the company because they thought all of his motives were all out of greed because they first started getting the idea after he offered Charlie Hugel and Albert Butler a spot on the post LBO board which Hugel thought was bribed to make both of them look at Ross Johnsons offer favorable. So we as a group came to a decision that Ross Johnson’s group was hindered in terms of buying the company because everyone thought all of his motives were all filled with greed so, then Charlie Hugel and shareholders made sure that Ross Johnson didn’t get the company in the buyout Instead taking the lesser off of KKR three dollars less than the management groups offer for the company. The economic objectives of the RJR Nabisco Buyout were to try and grow the company along with realize economies of scale and scope by getting to the point where they were making their products while doing it at a cost effective manner than what they had been
The political approach takes into consideration the years of understanding the individual interactions and the manufacturing outcome. Also with the new management team from Berndt Foods having Pat look after Bar-B-Rations. One key understanding of the case study is the Stakeholders conflict of interest with the senior managers. There are different types of Stakeholders, and in this particular situation it is the key Primary Stakeholder of Employees and Managers (Carroll, & Buchholtz, 2006). The staff of Bar-B-Rations before the change in management are not for the family’s decision of selling the company as it resulted in one of the managers leaving as stated before.
CPI and GM, as aforementioned, are competitors in the market. These two are both pharmaceutical companies but GM is an insolvent company famous for its "innovative use of lagundi leaves in its cough syrup." CPI on the other hand, has been suffering from low sales for the past few months because of the stiff competition in the market. Acting within the suggestions made by Mr. De Guzman and two other members of the board, CPI approached GM with a business proposal: that CPI will buy shares of stocks from GM in exchange for use of GM 's patents. This will allow CPI to develop a new product line using its very own traditional herbal medicine.
Shareholder pressure was one of the reasons behind the PayPal split from the eBay. The activist investor Carl Icahn was the one major driver who pulls the PayPal split from the eBay. Carl Ichan think invest in two businesses with different type of strategies and forecasts better than the use of one business strategies and forecast. Carl Ichan have keep explain and speak out his own view about the PayPal should split from eBay. These give the shareholder pressure in their mind set and worry about the eBay and PayPal future performance.
Nonetheless, competitors of Wilkerson overlooked the opportunity to make profit for themselves in flow controllers, due to the fact that Wilkerson has increased the product price by 10% without losing any business. President of the Wilkerson Company was discussing the business’s operating results with his financial controller and manufacturing manager. Reason for this meeting was because; competitors were now reducing the price of their pumps, posing a threat to Wilkerson’s major product line. Since pumps where a commodity product for Wilkerson, they had no other choice but to match the competitors price in order to maintain volume. Unfortunately, Wilkerson’s price cuts led to a decline in their company profits, especially in the pump line.
They diversified the industries they were serving with staff and soon they were generating $10 million in sales but the recession in 2008 heavily impacted Strataforce, they lost a big chunk of their business. Tana opted for an offence strategy and opened new offices in the west cost. In 2009 they saw an opportunity in the truck driver staffing segment and they created a new company, Road Dog. The trucking business had higher costs but better margins and less competition. Today, Strataforce and Road Dog merged under one brand.
Sunbeam was pressured to fix their financial issues, and were looking at all options on how to solve their internal crisis. They brought in Chainsaw Al, who had a reputation of cutting companies to the bone. Sunbeam senior management wanted to, “create the illusion of a successful restructuring of Sunbeam in orderto inflate its stock price and thus improve its value as an acquisition,” (Mintz & Morris,2014). Chainsaw Al’s fraudulent actions as CEO gave Sunbeam a market price of $52 per share, which in 1998, fell to $34.63 per share. When Arthur Anderson conducted their audits, they should have considered the fact that Sunbeam went from financially risky to successful in a short amount of time.
After some investigations, the EC discovered that “Lutèce”, “Prochamp” and “Bonduelle”, three producers of canned mushrooms, participated in a cartel. These cartelists agreed to produce less output than they would if they acted independently in order to stop a decrease of prices. Consequently, the market price increased and these firms earned higher profits. As the EC indicates (2014), these firms were fined €32,225,000 because they coordinated their prices and also allocated customers between them. They were involved in this cartel for more than one year so all consumers have certainly been affected.