The paper 'The Importance of Corporate Governance Became Dramatically Clear ' is a great example of a Management Case Study. In a bid to have the exploration of the origins of the contrasting conceptualizations with respect to the role of the board of the directors of the Coca-Cola Company, there is a need to start with the review of some of the primary ideas of that today results into the shaping of the contemporary thinking of the board’ s role. On the same note, it will also be important to factor in the influence that results due to the issue of the USA’ s corporate government practices (Lawrence, and Beamish, 2013).
Mostly, the role of the board is what leads to the quality of work needed being put in any company added with the experience that each of the employees has all together with respect to the laid down rules that govern the company altogether. On the same note, the potential investors will also chiefly depend on the outcome that results from the effective management that board in place excerpts in the running of the company Literature Review Corporate governance theories On many of occasions, the corporate governance of any company such as Coca-Cola, in this case, may sometimes face problems due to a lack of a clearly defined set of management ideologies.
In this regard, there are four theories that play a major factor in shaping the governance of any company in any country (Groot, 2009). The theories in question are the agency theory, resource dependence theory, stewardship theory, and the stakeholder theory. Based on these theories, many individuals do take into the application of that kind of theory with respect to corporate governance in terms of what makes sense during such times.
For instance, by factoring in the application of any of these corporate governance theories, there are times to consider in the economic implications and also possible challenges that come with it altogether (Tourani-Rad and Ingley, 2011). However, the most so influential theory is the Agency theory that indeed what results in the shaping of many corporate governance systems of many companies in the world such as The Coca-Cola Company in this case in the United States. The corporate governance system of the USA Today, the USA corporate governance system faces the most criticism primarily due to the failures of most major companies such as Enron, WorldCom, and some other prominent companies in the country.
The observed failures and the criticisms are also what serves as the legislative changes such as the Sarbanes-Oxley Act of 2002 and also the regulatory changes concerning the issue of the corporate governance in terms of its guidelines based in the NYSE and NASDAQ. Sometimes with respect to the issue of corporate governance in the USA, there are some questions that their answers are yet to come out with respect to the vice.
For instance, as it stands, the systems of corporate governance are poor but are the same corporate governance is bad really? The other question that also comes in whether the changes being sought to inject on the USA’ s corporate will result in the desired improvement (Groot, 2009). Based on the evidence found, it may not be sincerely put it that they are indeed the cause of the failed USA system of corporate governance (Foster, 2014).
For instance, the economy and the stock of the country’ s market area times being on the good side of the performance in comparison to other countries in the past few decades. Similarly, the country’ s stock market also experiences the continuity in the outshining of other wider indices in terms of performance because the scandals in most of the occasions broke. From the interpretation of the evidence, some components of the USA’ s corporate governance system had some failures during the period of the 1990s, the overall system that has the inclusion the public and the government in this case created the reaction in terms of addressing the problems (Webb, 2006).
Hence, it is relevant to consider the effects of the legislative, the regulatory and the responses from the market that may occur in the coming future. With this notion, there is a likelihood of a much better as much as it may appear that dangerous in terms of reaction to extreme events.
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