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    Corporate Governance, Innovation, and Economic Performance: A Case Study On Volkswagen

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    Praveen Mohanka
    Corporate governance issues at Volkswagen in the early 1990s led to large financial losses. To address this, the company implemented new financial strategies focused on shareholder value creation. These included employee stock options to increase employee ownership, acquiring stakes in other automakers like SEAT and Skoda to diversify operations, and focusing on both low-cost and high-cost vehicle segments. Controlling the shareholder structure also helped reduce hostile takeovers and gave the state government, as a major shareholder, influence over strategic decisions during a difficult financial period. These actions helped stabilize Volkswagen's finances and strengthen its position in the automobile industry.

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    Corporate Governance, Innovation, and Economic Performance: A Case Study On Volkswagen

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    Praveen Mohanka
    14 views8 pages
    Corporate governance issues at Volkswagen in the early 1990s led to large financial losses. To address this, the company implemented new financial strategies focused on shareholder value creation. These included employee stock options to increase employee ownership, acquiring stakes in other automakers like SEAT and Skoda to diversify operations, and focusing on both low-cost and high-cost vehicle segments. Controlling the shareholder structure also helped reduce hostile takeovers and gave the state government, as a major shareholder, influence over strategic decisions during a difficult financial period. These actions helped stabilize Volkswagen's finances and strengthen its position in the automobile industry.

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    Corporate governance issues at Volkswagen in the early 1990s led to large financial losses. To address this, the company implemented new financial strategies focused on shareholder value creation. These included employee stock options to increase employee ownership, acquiring stakes in other automakers like SEAT and Skoda to diversify operations, and focusing on both low-cost and high-cost vehicle segments. Controlling the shareholder structure also helped reduce hostile takeovers and gave the state government, as a major shareholder, influence over strategic decisions during a difficult financial period. These actions helped stabilize Volkswagen's finances and strengthen its position in the automobile industry.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    14 views8 pages

    Corporate Governance, Innovation, and Economic Performance: A Case Study On Volkswagen

    Uploaded by

    Praveen Mohanka
    Corporate governance issues at Volkswagen in the early 1990s led to large financial losses. To address this, the company implemented new financial strategies focused on shareholder value creation. These included employee stock options to increase employee ownership, acquiring stakes in other automakers like SEAT and Skoda to diversify operations, and focusing on both low-cost and high-cost vehicle segments. Controlling the shareholder structure also helped reduce hostile takeovers and gave the state government, as a major shareholder, influence over strategic decisions during a difficult financial period. These actions helped stabilize Volkswagen's finances and strengthen its position in the automobile industry.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Corporate governance, innovation, and economic performance: a case study on Volkswagen

    Praveen.mohanka 4111028028

    What is shareholder Value creation?


    Shareholder value is a business term, sometimes phrased as shareholder value maximization or as the shareholder value model, which implies that the ultimate measure of a company's success is the extent to which it enriches shareholders.

    The Term is used in different ways


    To refer to the market capitalization of a company To refer to the concept that the primary goal for a company is to increase the wealth of its shareholders by paying dividends and/or causing the stock price to increase To refer to the more specific concept that planned actions by management and the returns to shareholders should outperform certain bench-marks such as the cost of capital concept.

    Circumstances of the co. led to generate new financial strategies that lead to creation of the Wealth. loss incurred in 1993 DM 2 billion fundamental weakness had become apparent a year before Crisis resulted from the corporate governance

    How imp. is the shareholding pattern of the firm to determine strategy control. How has the firm used if for its advantage
    Shareholding pattern is very imp for the company as it identifies the participant in a company and help in reducing the hostile take-over. Shareholding pattern is also important for the investors to decide whether to invest or not in the company Advantage : If any one has acquired more then 20% stake in the company, extra voting right will not be given to the investor.

    As Major stake holder of the company was in the hands of state government so hostile takeover was not that easy irrespective of company suffering losses. Company buy-back 9.8% shares from the market

    What gives the company its Niche in the car industry


    In 1967 beetel remain the top selling car while other model failed to create any impact It bought SEAT in china due to which company's profit increased The company was also well diversified Company focused both on low cost car and high cost car segment. Some of the car models had distinct share in the market.

    Specify the action related to the Balance sheet items that have increased the net worth of the firm Employee stock option(ESOP) given to the employee Acquiring 30% stake in skoda auto

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