Bad corporate governance Essay
Bad corporate governance
Approach Governance Governing is a process of implementing decisions, rules and regulations in a group of people. Its concept has been widely used by companies to make their workers comply a set of agreed actions that were done and ordered by the management. The management’s ways of doing rules and policies has a big effect in a company’s performance as a whole. As decision making is vital to a company, the management should be equipped with the knowledge of how they are going to make their decisions every day.
Study of Good and Bad Governance Good Governance Good governance will surely give benefits to the company, employees, customers and suppliers. Its implemented decisions had considered the characteristics of Participation, Rule of Law, Transparency, Responsiveness, Consensus Orientation, Equity and Inclusiveness, Effectiveness and Efficiency and Accountability that if complied well, it will bring good feedbacks and result to the company. Bad Governance Mismanagement has always been a problem in all companies which is a start of bad governance.
Bad governance emerges when conflict rises among people who are involved in the company. It includes conflict of interest, political issues among members of the company, social problems, discrimination, lack of participation and more. When employees or the people concerned to the company starts to ask questions about the decision of the company’s management, then there is an unclear part in that certain decisions being implemented that employees do not understand or agreed.
Analysis All companies have their different mission and vision as their instrument and inspiration to be the best that they can to survive in a very competitive market. In this paper, we will examine the different possible causes why the UK Industrial Company and MISnet Inc. failed. Sample Study: The UK Industrial Company Failure The UK Industrials is composed of 539 firms and observed from 1988-1993.
From table 1, we can see that from the original 539 companies, 56 companies from the group exit the firm because of its financial stabilities. This resulted to shake to the whole company making it like a domino effect to fail the company. The case study made by John Hunter and Natalia Isachenkova for the UK industries explained that the result of the UK Industrial failure is its lack of knowledge in determining the financial stability of the industry which is very important for investment decisions at the micro level.
Individuality also played a big part in their failure because the study showed a big evidence of division from different panels as such, decision making regarding the industries financial problem, profits, liquidity, turnovers and changes were greatly affected. Aside from the causes of failure mentioned, the industry is also said to have focused on their current cash flow rather than also thinking about the future economic value of the firm according in their future cash flows.