Assignment 8 Questions

Chapter 11 Questions

Question 1

Stockholders are people with interests in terms of shares and ownership in a business. On the

other hand, the stakeholders are the people who get affected by all decisions and activities by a

business. Stakeholders are distinguished by the levels of their interests and direct or indirect

effects by business decisions to them. For instance, the consumers are directly affected by the

decisions made by a business. This is unlike the financial companies that may not have similar

effects but are all classified as stakeholders. In this case, there are primary and secondary

stakeholders classified based on their different interests and effects on their decisions.

Question 2

The processes for stakeholder engagement begin by identifying the stakeholders in a business.

This is the first process where a business identifies the types of stakeholders, their interests and

needs from the company. The second step is identifying the purpose of management of the

stakeholder needs. This ensures a list of priority on the stakeholder needs prior to the

engagement. The third process is choosing the right tool to communicate by identifying the type

of stakeholders, how to effectively communicate, when, and the effectiveness of different

methods to communicate. The fourth process is creating a plan and activating it. This is followed

by maintenance of the plan and monitoring it.

Question 3
Agency problem can be defined as the distinct situations where one party has to act in the

interests of another. This normally occurs based on the management of a business and the

interests of their stakeholders, where the management must act according to the needs of the

stockholders of the business. The best approach to avoid this problem is by creating incentives to

employees. The goof incentives that should lure employees into working hard and achieving the

organizational goals often achieve more than that. It maintains the stockholders’ satisfaction as

well as the consumer delight from the institution. In this case, the conflict of interest is

minimized, or might not occur.

Question 4

Internal controls are mechanisms introduced in a business to improve the integrity of various

business prospects. The internal controls ensure the management of critical business financial,

accounting, and legal activities. The internal controls that can be implemented in a business to

ensure ethical behaviour include financial integrity laws, accounting rules, and legal

requirements within every business activity. The internal controls are reliable in maintaining

effective planning and process management in various organizational departments. This

improves the quality of outcome for the ethical strategies created by a business.

Chapter 12

Question 1

Organizational design enhances the value creation through uniqueness of the roles and

responsibilities, distribution of tasks, as well as communication planning with is an added

advantage to a business. A business with a reliable organizational design will certainly have a
competitive advantage over its competitors. The key organizational design elements include the

chain of command and work specialization which describes the roles and responsibilities, as well

as the higher authorities than the others in an institution. The other key element is the span of

control that defines the scope of work for an institution as well as the workers.

Question 2

Organizational cultures can be described as those values, practices, as well as the expectations

that govern the activities of workers. Organizational culture will direct workers on what and

what not to do in an institution. Additionally, it is a distinct feature that differentiates businesses

for the consumers and employees. A transparency culture incorporates the actions among all

employees to require and insist on transparency at all levels. This is also based on the ethical

conducts that are described based on what is moral or immoral in an institution. Furthermore, the

incorporation of reliable organizational culture improves the competitive advantage of the

business. This means a business will be considered on how the culture is reliable, effective, and

ethical compared to their competitors.

Question 3

Strategic planning in organizations vary from the single and the multidivisional corporates. The

single corporates conduct their strategic planning through simple and procedural meetings with

the management to create strategies and decisions for the company. However, the multidivisional

companies conduct three stages of decision and strategy planning. The first is the headquarters

strategy planning, the second is the divisional planning, and the final is the departmental

planning. The complex system allows planners engage in the market or product oriented

divisional strategy building to align to the entire organizational objectives. The advantages of a
multidivisional structure is the specialization of specific institutions and their fast nature in

implementing strategies compared to the single institution. The problems encountered is the level

of bureaucracy and delays experienced while gathering ideas and making the decisions.

Question 4

A company conducts strategy development at global levels by identifying the market needs,

introducing a product and sensitizing the local market to enable their acceptance of the product.

The strategy should be based on the market as well as the product to maximize their interests and

growth of the business. The key elements for the organizational structures that enhance

competitive advantage include the departmentalization aspect, distribution of roles, and the

coordination of activities which significantly identify an institution and the competitiveness

above others.