INTERNAL AND EXTERNAL INSTITUTIONS COMPANY NEEDS: CAPITAL – has become scarce resource in

AND INFLUENCES OF CORPORATE flat, borderless world, where the click of a

GOVERNANCE - Right people mouse, capital can leave a market and
- Team destroy it.
Foundation of corporate good - Processes
governance = Intellectual Honesty CORPORATE GOVERNANCE IN THE
RIGHT TEAM MAKING UP PHILIPPINES
INTELLECTUAL HONESTY – it is expressed
by acting in the best interests of the - The board must determine a CORPORATE GOVERNANCE – needed to
incapacitated company. common understanding of the make corporate managements more
purpose of the company, the accountable, and their auditors more
CORPORATION – a juridical person, but it values that drive its business and rigorous but it requires fair legal
is also incapacitated until its directors are who are the important frameworks that should be enforced
appointed and the board in turn delegates stakeholders. primarily.
to management the implementation of its - Must also identify the
collective decisions. sustainability issues which are MEMORANDUM CIRCULAR NO. 2, SERIES
pertinent to the business of the OF 2002 (CODE OF CORPORATE
Good governance connotes acting with company. GOVERNANCE)
responsibility, accountability, fairness and - Board needs to adopt the inclusive
transparency. approach to governance. They - Under the SEC Resolution NO. 135
need to take account of the of April 4, 2002.
TRANSPARENCY
legitimate Interests and
THE CODE AIMS to promote corporate
- Has a withering effect on expectations of the stakeholders
governance reforms that will raise investor
misconduct and is absolutely linked to the company.
confidence, develop capital market and
critical in communicating to help achieve high sustained growth for the
LONG-TERM STRATEGY MUST FOLLOW
stakeholders any decisions of the corporate sector and the economy.
CONSIDERATION BY THE BOARD OF
board.
DIRECTORS ON THESE FIVE ASPECTS:
- It demands that the CODE APPLIES TO:
communications consist of - Financial
substance over form and contain (1) Corporations whose securities are
- Human
positive and negative aspects, if registered or listed.
- Social
any. (2) Corporations who are grantees of
- Environmental
permits/licenses and secondary
- Technology
franchises from the Commission.
(3) Public companies
 (4) Branches or subsidiaries of foreign
corporations operating in the
Philippines whose securities are
registered or listed.
BOARD OF DIRECTORS
- Shall primarily be responsible for
the governance of the
corporation.
- Should establish the corporation’s
vision and mission, strategic
objectives, policies and
procedures that guide and direct
the activities of the company, and
the mechanism for monitoring
management performance.
THE BOARD SHALL ALSO CONSTIUTE
COMMITTEES IN AID OF GOOD
CORPORATE GOVERNANCE SUCH AS:
1. The Audit Committee, whose
responsibility is to inculcate in the
minds of the Board members the
importance of a sound system of
internal control and the Board's
oversight responsibility;
2. The Nomination Committee,
whose function is to review and
evaluate the qualifications of all
persons nominated to the Board;
and
3. The Compensation or
Remuneration Committee, whose
task is to establish a formal and operational aspects of the
transparent procedure for corporation.
developing a policy on executive - Activities are determined by the
remuneration. powers, duties, and
responsibilities delegated to or
STOCKHOLDER RIGHTS SHOULD BE granted by an authority which can
RESPECTED: be from the shareholders and/or
from the by-laws itself.
1. Voting right
- Only a very few will be able to give
2. Pre-emptive right
you a good and definitive answer
3. Power if inspection
when you ask average investor or
4. Right to information
the responsibilities of the board of
5. Right to dividends
directors.
6. Appraisal right among others.
AUTHORITY AND RESPONSIBILITY AND
DISCLOSURE
PURPOSE OF THE BOARD OF DIRECTORS
- It is a vital and dominant theme in
- It is to protect the resources
the Code.
entrusted to them by the
- The more transparent the internal
shareholders and make sure the
workings of the company and cash
latter receive a decent return on
flows, the more difficult it will be
their investment.
for management and controlling
- In European countries, many
shareholders to misappropriate or
directors there feels that it is their
mismanage company assets.
primary responsibility to protect
INTERNAL FOUNDATION OF CORPORATE the employee of the company
GOVERNANCE first, the shareholders second.
STRUCTURE ABD MAKEUP OF THE BOARD
BOARD OF DIRECTORS
OF DIRECTORS
- It is a body of elected or
appointed by shareholders who - Made up of individual men and
jointly oversee the activities and women, the “directors” who are
the overall managerial and elected by the shareholders.
Tactics under anti-takeover defences:
1. Have a vested interest in the
company
2. Work in the upper management of
the company
3. Are independent from the
company but are known for their
business abilities.
COMMITTEES ON THE BOARD OF
DIRECTORS
- Their responsibilities include the
institution of the audit and
compensation committees.
- Audit Committee is responsible in
CHIEF EXECUTIVE OFFICER (CEO)
making sure that the company’s
financial statements and reports
are accurate and use fair
estimates in accordance with
applicable financial reporting
standards.
- Compensation Committee places
the base compensation, stock
option awards, and incentive
bonuses for the company’s
executive, including the CEO.
OWNERSHIP STRUCTURE AND ITS IMPACT
ON THE BOARD OF DIRECTORS
- Particular ownership structure of a
corporation has a huge impact on
the efficiency and effectiveness of
the BOD to govern.
- In a company where a large,
single shareholder exists, entity or
individual can effectively control
the corporation.
- In a company where no
controlling shareholder exists, the
directors should act as if did exist
and attempt to protect this
imaginary entity all the times,
even to the extent of firing the
CEO, making changes to the
structure that are unpopular with
management, or turning down
acquisitions due to cost
consideration.
- It is usually the singular
organizational position that is
principally accountable in carrying
out the strategic policies and
procedure as established by the
board of directors.
- He is directly under the BOD, and
presents its reports and output to
board.
- It’s his responsibility to bring into
line the company, internally and
externally, with their long-term
vision.
- Its central duty is to make possible
to engage business outside if the
company while directing
employees, managers and other
executive officers towards a
central objective.
RESPONSIBILITIES OF A CEO
A. Support To The Board
- Supports operations and
administration of board by giving
information and advice to board
members.
- Should be serving as the crossing
point between board and staff
B. Delivery Of Program, Product And
Service (PPS)
- The CEO is expected to be the
brand bearer.
- Administer design, marketing,
promotion, delivery and quality of
programs, products and services.
C. Financial, Risk And Tax
Management
- Recommends yearly budget for
board's approval and cautiously
manages organization's resources
within the bounds of budget
guidelines.
- Utilization of resources may also
have other bases such as laws,
regulations, and other directives.
D. Human Capital Management
- Efficiently manages the human
capital of the organization based
on sanctioned personnel policies
and procedures that fully conform
to current laws, regulations, and
 standards both local and
international.
E. Public Relations (PR)
- Pledge that the organization and
its mission, programs and
initiatives, products and services
are consistently presented in
strong and physically visible
manner to the community.
- Package and build a positive image
of the company to its relevant
stakeholders.
CHIEF FINANCIAL OFFICER (CFO)
CRITICAL AREAS WHICH AN EFFECTIVE
CFO WILL WORK ON IN DISCHARGING HIS
FUNCTIONS:
A. Implements Internal Controls
- The one responsible for conveying
the important financial controls to
a company.
- At a higher level, a CFO should
also develop effective controls
that provide supervision against
fraudulent activities.
B. Supervises Major Impact Projects
- Also handles and supervises those
projects that require significant
quantitative and qualitative
interpretations and analysis in
order to reach at and
understanding of the options that
are available.
- Might also carry out a meticulous
analysis of a company's future
capital investment requirements
as a prerequisite in securing
additional financing.
C. Develops Relations With
Financing Sources
- Institute good working
relationships with banks and other
financial institutions that may
impact on the company's ability to
finance its operations.
D. Advisor To Management
- Also an important member of the
management team of some
emergent companies.
- Can facilitate and help the
business owners, executives and
other top managers make the
substantial connection between a
company's operations and its
financial performance that are
reflected in financial figures.
E. Drives Major Strategic Issues
- Expected to take part in important
role of attending some major
strategic issues that will have an
impact on the company's long-
term future.
- Also play a significant role in any
endeavor the purpose of which is
to seek investment from the
public or financial markets
especially in times when the
company is having an initial public
offering (IPO).
F. Risk Manager
- It is the best position to foresee
risk considering that they have this
rare perspective on how the
company operates.
- CFO's viewpoint on risk can be a
helpful source to the board of
directors and the CEO as well as
other senior officers as they
manage the corporate affairs.
G. relationship role
- Nucleus in an organization with
many connections.
- Strong verbal and written
communication skills are
indispensable if the nucleus is to
support the connections
effectively.
- Serves the bridge between these a
variety of parties within the
organization.
H. Objective Referee
- Needs to demonstrate
impartiality.
- The skill to present important
financial issues is an invaluable
resource but it should always be in
the context that it is being done
not to favor somebody.
- CFO can and should be a trusted
adviser in these matters of
financial compliance reporting.
SHAREHOLDERS
Shareholder Rights and Responsibilities
- Share ownership carries with it
important rights and
responsibilities.
- Gives the owner with the right to
a share of the income of the
company called dividend and a
right to a share of net proceeds
on the sale during liquidation of
the company.
- Includes the right to sell or
transfer that share without the
need to inform or getting the
consent of the other stockholders.
- An important right and
responsibility of shareholders is to
vote. Voting right includes the
right to information about the
company and the right to express
an opinion on the company's
performance.
In pursuing the rights to information and
influence, shareholders must keep in
mind their responsibilities:
- They must ensure that the
obligation to provide information
to shareholders does not detract
from the company's ability to
compete in its marketplace. The
information should not cost
competitiveness.
- They must ensure that their right
to attempt to influence the
company does not translate into
behavior that will paralyze and
detrimental to the company. It
should not spin at a level wherein
the principal (shareholders) and
agent (officers) will now becoming
adversarial in running the
corporation. The rule of the
thumb is that managing a
company is not a constant
exercise of stockholders'
referendum.
Reviewing the Role of Shareholders
General - The directors and not the
shareholders are responsible for the
management of the corporation.
Under the Corporation Code of the
Philippines these matters include:
- Effecting certain merger or
reorganizations.
- Selling all or substantially all of the
corporation’s assets.
- Adding or removing
restrictions on the business that
the corporation may carry on.
- Changing the corporation’s share
capital.
- Increasing or decreasing the
number of directors or the
minimum or maximum numbers
of directors.
- Confirming by-laws.
- Adding or changing restrictions on
the issue, transfer or ownership of
shares.
Shareholder Ability to Change the Board
- Shareholders who are dissatisfied
with how the directors are running
the corporation may remove the
directors or refuse to re-elect
them.
EXTERNAL ENVIRONMENT OF
CORPORATE GOVERNANCE
AUDITORS
- Their job is to help to ensure that
firms are run efficiently by keeping
public records accurate, adhering
standards of reporting for public
purposes, and taxes paid properly
and on time.
- Independent auditors analyze and
communicate financial
any
information for various entities
such as companies, potential
investors, individual clients,
government both at the local and
national level.
 - They may also engage in
consultancy services which may
include, financial and investment
planning, information technology
consulting, and limited legal
services.
LEGAL ENVIRONMENT - Some contend
that it is the market that can really press
real governance considering that it is a
variable independent from anybody. There
are, however, some limits to this
contention.
Legal environment has three distinct
dimensions:
1. The domestic laws of home
country
2. The domestic laws of each of
foreign countries
3. International law in general
MARKETS - considered the most
important institution of corporate
governance.
Three central and important points of the
term markets:
1. The firm’s product market,
2. Capital market,
3. The managerial labor market.
OTHER EXTERNAL FACTORS
- External Environment may create
major threats or in some cases
precursor of openings and
possibilities for an organization.
- Any organization that adapts the
external environment without
difficulty essentially survives and
the ones that do not are the ones
that are eliminated in the
competition; it's a plain survival of
the fittest.
EXTERNAL ENVIRONMENT MAY EFFECT IN
ANY OF THE FOLLOWING AREAS:
Political Environment - politics of a
country or region that an organization is
functioning affects the policies and
benefits that an organization derives from
a system.
Technological Environment
- Any new development may render
an organization's processes and
systems obsolete if it is not quick
to adapt to the new changes.
- This becomes even more relevant
in case of businesses that rely
heavily on technology and are
technologically sensitive.
Social Environment
- Comprises the general behavior of
the society and the ethical
leanings of the individuals
responsible for the functioning
and eventual long-term existence
of the organization.
- Practically the ecosystem within
which organizations thrive, then
enabling atmosphere in which
business in situated into.
CORPORATE PROTECTION WITHIN LEGAL
BOUNDARIES
ANTI-TAKEOVER DEFENSES
- Come in many different forms and
appearances.
- Technical languages such as
"shark repellent" and "poison
pill" are used to describe the
defensive means or tactics that
companies use to challenge a
lurking merger of two or more
businesses into one.
The following may be done to prevent
the unwelcome takeover:
- The "flip-in" which allows existing
shareholders to purchase more
shares at a discount in order to
dilute the value of the shares.
- The "flip-over allow the
shareholders to purchase the
bidder's shares at a discount.
- Acquisition of previous issued
stock in the open market (treasury
stock).
- Provision such as "One can never
be a board member if you are
already a board member of a
competitor company".
- Supermajority vote as prerequisite
of companies major move like
merger, consolidation or
acquisition, issuance of additional
stocks and reacquisition of
previously issued stocks.
- A provision in the company's
charter or articles of incorporation
which allows shareholders to sell
their shares to the bidder for more
than the market price.
- The "debt façade", a ploy wherein
a company takes on plenty of
debts to make it unappealing, as a
bidder would be answerable for
those debts once he will become
shareholder.
- The "debenture sheltering",
business issues bonds that will
have to be redeemed at a higher
price in the future.
- The company offers its employees
stock options, high bonuses, and
exceptional severance pay that
would hurt the bidder's pocket
very much if takeover would take
place.
- Staggered elections to the board
of directors over a number of
years. This would mean that a
potential bidder will be "locking
horns" with a hostile board of
directors until new elections can
be held.
ADVANTAGES OF ANTI-TAKEOVER
DEFENSES
1. Anti-takeover tactics are positive
when a company has the sense to
believe that its stock has a higher
market price than reflected and
thus may become the target for a
takeover.
2. Anti-takeover tactics are good
when the predator company's
purpose is to acquire the company
and then use it for not good
purposes which would not benefit
the constituent companies.
3. Short-term poison pills may help
businesses go through difficult
financial periods when they could
be defenseless targets.
DISADVANTAGES OF ANTI-TAKEOVER
DEFENSES
1. It will prevent a genuinely good
takeover purpose or aim. Anti-
takeover tactics are good when
the predator company's purpose is
to acquire the company and then
use it for good purposes which
would benefit the constituent
companies.
2. Anti-takeover tactics are
sometimes used to embed
management and prevent
shareholders from selling their
stock and maximizing its price.
3. Board members, who are already
in their comfort zone, sometimes
hide behind poison pills to retain
their positions.
The following action should be observed
in using anti-takeover tactics:
- Check that the use of anti-
takeover strategies is legal in the
country or jurisdiction in which
the company is operating.
- Thoroughly examine what method
would provide the greatest
protection without hurting the
company's image and value.
- Avoid tying the company to stock
options, lofty bonuses, and special
severance pay for those
employees you might later want
to fire.
- Calculate risk associated to debts.
If you are taking on debts or
issuing bonds to make the
company unappealing, make sure
that you can handle those debts
even if the economy slides down.
 - Consult with partners, directors,
lawyers and accountants before
initiating anti-takeover strategies.
- Don't use anti-takeover strategies
except when you are sure that it
will not backfire leaving the
company at risk and defenseless.
LIABILITY ISSUES AND INDEMNIFICATION
OF OFFICERS
LIABILITY – it can accrue for officers and
directors when they cause financial and
nonfinancial harm to the corporation, or
when they act solely on their own behalf
which is detrimental to the corporation
and can be in a form of a crime and other
wrongful acts.
Personal Liability of Officers and Directors
Issues that may subject officers and
directors to personal liability:
- Issues involving misappropriation
- Issues involving nondisclosure of
conflict or interest
- Issues on loyalty
- Issues on non-separation of
personal and business concerns
- Issues of prudence
Indemnification of Officer and Directors
- It refers to the act of the
reimbursing officers and directors
for expenses incurred, liabilities
accrued, and amounts pain in
defending claims brought to them
for actions taken on behalf of the
corporation.
- Shareholder should recognize that
in the absence of this method, it
will be difficult for corporations to
find anyone willing to take such a
risky job of serving as officers and
directors.
Directors’ and Officers’ Insurance
- There are matters that cannot be
indemnified under the law; in this
case the appropriate remedy
would be insurance coverage.
Corporations are allowed to
purchase insurance to cover
matters resulting from acts taken
by officers and directors.
The reasons for the increase of the cost
are two:
(1) The cost for directors' and officers'
insurance has gone i dramatically
due to the inherent risk associated
to it.
(2) The exclusions for coverage have
also increased.
SHAREHOLERS’ IMPOSABLE LIMITATIONS
THROUGH CLASSES OF STOCK (4 TYPES OF
SHARES)
1. ORDINARY SHARES
- Are standard shares with no
special right or restrictions.
- Have no potential to give the
highest financial gains and the
highest risk.
- They are the last to be paid if the
company is wound up.
2. PREFERENCE SHARES
- Carry a right that gives the holder
preferential treatment when
dividends are distributed to
shareholders.
- Shares have fixed value which
means shareholders would not
benefit from an increase in
business profits.
3. CUMLUATIVE PREFERENCE
SHARES
- Give holders the right as if
dividends cannot be paid in one
year then it will be carried forward
to succeeding years.
- Dividends must be paid despite
the earning of the business.
4. REDEEMABLE SHARES
- It comes with an agreement that
the company can buy them back
at the future, a company cannot
issues only redeemable shares.
SUPERMAJORITY
- Refers to percentage of ownership
that is way above the simple
majority which is one half plus one
share of the total shares
outstanding.
- Could mean 67% to 90%
- Have full control on major goings
on in the corporation.
- Often requisite for a company to
take certain actions.
SHAREHOLDER VOTING AGREEMENTS
- It is a legal contract among
shareholders of a corporation.
- it frequently covers how members
of the BOD are to be selected and
occasionally covers.
- VENTURE CAPITALIST often
expect a shareholder voting
agreement to be executed.
- SHAREHOLDERS may choose to
pool their votes for the particular
goal.
- VOTING AGREEMENTS may
stipulate that the involved
shareholder will cast the vote.
- CORPORATION CODE OF THE
PHILIPPINES does not prohibit the
shareholders voting agreement.
SHAREHOLDER-MANEGEMENT 3. ADOPTION AND AMENDMENT OF
AGREEMENT BUSINESS PLANS AND BUDGETS
- Provide a process for adopting and
- Most important contractual amending business plan and
protections. budgets.
- This agreement will only be 4. SCOPE OF BUSINESS
relevant if the corporate structure - It is common particularly in a joint
is being used, venture, for the shareholders
- Most recommendable agreement to specify the scope of
system/method. the business that the company will
conduct.
The main features of a shareholders'
5. INTELLECTUAL PROPERTY RIGHTS
agreement are:
- Where shareholders parties are
1. BOARD APPOINTMENT RIGHTS contributing unique and distinct
- It is common for the shareholders advantage or process such as
agreement to establish the trademark, patent, and copyrights.
relative rights of the - This is another common
representation that the agreement in a joint venture.
shareholders will have on the 6. RIGHT TO INFORMATION
company’s BOD. - It is extremely important for the
- MINORITY SHAREHOLDER may investors to monitor performance
seek to have one director on the closely.
board to kept informed of - They will expect a contractual
matters. right to receive regular reports.
- LARGE SHAREHOLDER may seek - The investors will also often seek
to appoint a large number of the right to have its own directors
directors to reflect. appointed to the board.
2. VETO RIGHTS 7. WARRANTIES FROM THE
- Refers to the right to overturn MANAGEMENT TEAM
decisions reached by the board, - These are series of statements
involves listing of materials and about the company that the
normally range from fundamental investors would expect to be true
matters. and accurate.
 - This is the statement of
management responsibility
intended to be given to
shareholder and other interested
parties of the corporation.
8. STRATEGIV INVESTOR RIGHTS –
where a shareholder Is looking for
more than a return on its
investment.
9. RESTRICTIONS ON TRANSFER OF
SHARES – the investor will be keen
to make sure that the
management team they are
backing, holds on to their shares.
10. RESTRICTIVE COVENANTS – while
members are employed, they
cannot compete with the
company or solicit customer or
employees.
11. EXIT PROVISIONS
- A shareholding in a private
company is by its nature illiquid
because there is no market live
and open of the shares.
- Particularly important for minority
shareholders who are unable to
control and exit process.
BEHAVIORAL MANAGEMENT THEORY
- Often called the human relation
movement because it addresses
the human dimension of work
- Behavioral theorists believed that
a better understanding of human
behavior at work such as ABRAHAM MASLOW
motivation conflict, expectations,
and group dynamics, improved - A practicing psychologist
productivity. developed one of the most widely
recognized need theories.
Several individuals and experiments
contributed to this theory: Theory of human needs had three
assumptions:
ELTON MAYO
1. Human needs are never
- His contributions came as part of completely satisfied.
the Hawthorne studies, a series 2. Human behavior is purposeful and
experiment that rigorously applied is motivated by the need for
classical management theory only satisfaction.
to reveal shortcomings.
- Mayo and F. J. Roethlisberger Maslow broke down the needs hierarchy
supervised a group of five women into five specific areas:
in a bank wiring room. They gave
1. Physiological needs: Maslow
the women special privileges. This
grouped all physical needs
experiment also resulted in
necessary for maintaining basic
significantly increased rates of
human well-being, such as food
productivity.
and drink.
- Mayo and Roethlisberger
2. Safety needs. These needs include
concluded that the increase in
the need for basic security,
productivity resulted from the
stability, protection, and freedom
supervisory arrangement rather
from fear.
than the changes in lighting or
3. Belonging and love needs. After
other associated worker benefits.
the physical and safety needs are
- Hawthorne effect, which
satisfied and are no longer
describes the special attention
motivators, the need for belonging
researchers give to a study's
and love emerges as a primary
subjects and the impact that
motivator.
attention has on the study's
4. Esteem needs. An individual must
findings.
develop self-confidence and wants
 to achieve status, reputation,
fame, and glory.
5. Self-actualization needs.
Assuming that all the previous
needs in the hierarchy are
satisfied, an individual feels a need
to find himself.
DOUGLAS MCGREGOR
- Was heavily influenced by both
the Hawthorne studies and
Maslow.
- Theory X manager has a negative
view of employees and assumes
that they are lazy, untrustworthy,
and incapable of assuming
responsibility.
- Theory Y manager assumes that
employees are not only
trustworthy and capable of
assuming responsibility, but also
have high levels of motivation.
FREDERICK HERZBERG
- Was a well-respected American
who has contributed greatly to the
way in which managers think
about motivation at work.
- He first published his theory in
1959 in a book entitled 'The
Motivation to Work'. It is a
content theory which explains the
factors of an individual's
motivation by identifying their
needs and desires, what satisfies
their needs and desires and by
establishing the aims that they
pursue to satisfy these desires.
- His aim was to determine work
situations where the subjects
were highly motivated and
satisfied rather than where the
opposite was true and his research
was later paired with many studies
involving a broader sampling of
professional people.
- Herzberg split his factors of
motivation into two categories
called hygiene factors and
motivation factors. The Hygiene
factors can de-motivate or cause
dissatisfaction if they are not
present, but do not very often
create satisfaction when they are
present. Motivation factors do
motivate or create satisfaction
and are rarely the cause of
dissatisfaction.
Hygiene Factors (leading to
dissatisfaction):
 Company Policy
 Supervision
 Relationship with Boss
 Work Conditions Salary
 Relationship with Peers
Motivators (leading to satisfaction):
 Achievement
 Recognition
 The work itself
 Responsibility
 Advancement
 Growth
Herzberg two distinct human needs:
 Physiological needs: avoiding
unpleasantness or discomfort and
may be fulfilled via money to buy
food and shelter etc.
 Psychological needs the need for
personal development fulfilled by
activities which cause one to grow.
- He identified this as the Adam and
Abraham Concept where Adam is
animal and wants to avoid pain or
discomfort, but Abraham is human
and needs to go beyond the
physical requirements.
- One of the most important ideas
that Herzberg postulated based on
his findings of satisfaction is that
of job enrichment. This is to
provide greater involvement and
interaction with that job.
REFRAMING ORGANIZATION - As
organization have become pervasive and
dominant, they have also become harder
to understand and manage.
FOUR FRAMES ROOTED IN BOTH
MANAGERIAL WISDOM AND SOCIAL
SCIENCE KNWOLEDGE

1. STRUCTURAL APPROACH –
focuses on the architecture of
organization.
2. HUMAN RESOURCE LENS –
emphasizes understanding people,
their strengths and foibles.
3. POLITICAL VIEWS - sees
organization as competitive
arenas of scarce resources.
4. SYMBOLIC FRAME - focuses on
issues of meaning and faith.

EMPLOYEE STOCK OWNERSHIP PLAN`

(ESOP)

- A company which wants to set up

and ESOP creates a trust to which
it makes annual contributions.
- VESTING is a process whereby
employees become entitled to an
increasing percentage of their
accounts over time.
- An ESOP company may make an
installment distribution provided
that it makes the payments in
substantially equal amounts.