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Firm Management

Paper type: Essay
Pages: 6 (1406 words)
Categories: Business, Company, Corporate governance, Corporation, Management, State
Downloads: 34
Views: 351


This study synopsis an ideational structure about the interconnection among buraucracy as well as indispensable certain markets where securities such as bonds are provided they are growing rapidly specifically, all organisations approaches towards money matters including performance of the firms how well the organisation is running basically there is a need to check the financial position of the company. The structure presumes that organisation is well managed and governed according to the policies on the same time purposive on a accumulation of connected domination elements, more companies attributes too.

Although the markets which deals in selling securities acts as a significant role in boosting organisation growth means to say firms should be governed so that later on that they should not find their organisation in trouble so the work should be done in effective manner as well as the stakeholders must be trustworthy about analogous attempt perhaps embarrased by the organisation who are not in the good position who doesnot control their organisation.

Furthermore, the vicious circle link likely perform the task in different way instance the position of the organisation is based on how well the firm is managed and there must be clarity in their decision as well as they must be answerable for their responsibilties or work so that firm can raise their standards which ultimately result in progress for the markets dealing in securities.


In many countries, there are lot of investors who deals in long-term investments and can apply substantial arouse on the organisation by commanding established codes and principles of corporate governance which are required to be followed by organisations. So long as permissible by law as well as supervisory framework are neccessary, the role of investors which are come under companies stakeholder plays an important role in the organisation, if the firms are lacking in clarity, the managers that are board of directors must be answerable to their shareholders so if they do not managed their fiirms properly in an efficient manner eventually those organisations are going to be punished means to say that in the future they will be in trouble because if the organisation will not be managed and governed the shareholders may leave that organisation.

On the other hand,it has been noticed in many established countries organisation doesnot give lot of importance to the finances they are just focusing on the growth of the company that is why they do corporate governance so that they can get success but they give less bonus to their employees . Good corporate governance does not mean only managing and governing the companies in best possible way but the organisation must invite their shareholders while taking any decision relating to their organisaton as well as they should motivate their shareholders so that they can have some improvement in the company and they must be given incentives including they must appreciate their employess if they do their work properly and must give rewards such as best performance of the day, week or month.

Review of literature

Many authors observe different things and everyone has different point of view also so they have shared their perspective as well as their experience about the workings of organisations. In this research paper authors reviews are discussed below –

  1. Klapper and Love (2004) states that organisatios which are properly managed and regulated by law as well as most importantly they should monitor regularly and all this will helps the investors where to invest by knowing the two things first is quite obious financial position of the company, reputation of the company in the market and last but not least does the organisations do corporate governance? Are organisations following the policies made by the government? There is a need to find all this answers before investing in any company.
  2. Drobetz et al. (2004) noticed that by governing the companies in the best possible way it reduces the wastage of resources means there must be optimum utilization of resources and other costs such as for managing an organisation you all need to review regularly there is a need to verify the financial statements so auditors are approched by the companies so that organisation do time to time reporting.
  3. Claessens (2003) observes that companies can be directed and well managed only when they are able to face the threats as well as if they can mitigate the risks such as frauds, window dressing and many more and they should also focus on their stakeholders interest rather than their own its human nature companies managers first think about themselves. Organisations should alligned their goals with their stakeholders so that firms can achieve their goals and this will help in the development of the country.
  4. Shleifer and Vishny (1997) identify that debtors of the organisation should first check the financial status of the company before providing loans to the companies and same with the creditors companies should first required to check the credibility of the creditors. There must be good relationship with their stakeholders whether external or internal this will benificial for the progress of the companies.
  5. Turnbull (1997) outlines rules which are made not for only one company it is for each and every organisation as a whole so it is responsibility for all companies to manage their firms according to that rules as well as policies. Profits which are earned by companies must be distributed among promoters and other shareholders.


As every human has different opinions, different perspectives so all this authors have different objectives. They are –

Claessens wants to boost the confidence of the investors and organisational goals should be alligned with shareholders goals, their motive should be same. Good corporate governance makes the organisation better and goodwill of the organisation increases means have a good name in the market.

Drobetz et al. companies should be governed in minimum cost and should be monitor regularly. There should be minimum wastage of resources to reduce the cost of auditing and other costs. There should be no chance of fraudulent activities.

Klapper and Love objective is to protect the interest of organisation stakeholders like investors so that organisations should run under better management and company should be updated and reported regularly. Organisation should motivate their shareholders.

Turnbull main objective is to companies should be well managed by following the policies made for organisations. Each and every law should be applied in the organisation to avoid the certain problems in future.

Sheifer and Vishny objective is that there should be good relationship and better understanding between company and all its stakeholders like creditors and debtors so that latter company should not face any problem or should be out from the trouble of such things.


In many organisations there is a principal-agent problems there should be better understanding between principal and agent. Organisational goals should be alligned with shareholders goals for the development of the organisation. This problems are required to mitigate through monitoring regularly, providing incentives, focusing on shareholders to manage the opportunistic behavior of owner.

Most of the companies motivates their employees so that they do more better than beffore and fulfill the organisational objectives. Knowing the fact there are others companies where employees can shift but still companies doesnot satisfy their employees by not providing good working environment and one of the most important thing the organisation does not invites their employees while taking any decisions they should be invited they are also part of the organisation so there are chances they may leave the organisation so the company should keep employees in their mind.

Organisations which are properly managed and governed by the management have less rate of return which is paid to investors. Basically, good corporate governance will helps the investors in minimizing their rate of return on investments. There must be accuracy and assurance which is not applicable to many companies as environment is dynamic so the organisation should set their goals accordingly same as with share market share prices changes daily.

In most of the organisations, companies keeps secrets from the employees as nowadays there is a lot of competition in the market. They may be donot believe their employees or they might be have fear of employees that they can disclose the companies objectives or sometimes if the company is making loss employees disclose outside the organisation and this creates a bad picture of the organisation in the market. So, they do not disclose anything to their employees.

Cite this essay

Firm Management. (2019, Dec 19). Retrieved from https://studymoose.com/firm-management-essay

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