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GGS Reaction Paper
GGS Reaction Paper
GGS Reaction Paper
At
that moment, the companies under GMI experienced a decline due to the ineffective running of
the board of directors. And the shareholders were helpless because they did not have the power
to elect a new board of directors and replace the director they do not like. That's why they feel
like no progress or changes is happening in the company's management. The clip says that
everything about the problem within the business or company starts with the fundamentals of
governance. When we create a business, it always begins with the owner, then the business adds
some staff and managers, and sooner the business will have a partner that will add to its growth.
And then, since the company is growing, a board of directors and CEO are needed, and they are
the ones who will manage and maintain the company. I admit the video when it states that the
usual problem with companies is that they forget that there is a head honcho or a higher person
besides the CEO within the organization which is the legal owners or shareholders. It means they
didn't consider those people part of the company, so there will be a problem. We know that most
of the company's investments and funds come from the shareholders. Thus, why they will react
like that because their money depends on them. Those people will not just invest if they are not
sure that the company will be successful or not. They highly expect from the company, so they
should not invalidate them because they contribute a lot to the company.
The second video talks about the financial crisis experienced by Asian countries. One of
the things that I observed as to why the reversal flow of their capital happened is because the
number of companies that are losing money has increased, and the tendency of that is for them to
borrow more, which is why they went bankrupt. The more a country borrows, the poorer it will
be because the country's debt will increase. Another thing I noticed is the adjustment of the IMF
plan since we know that the IMF is an organization that helps countries with money problems.
Maybe the IMF's adjustment plan hit the countries included in their program. At that time, the
IMF supported the countries included here, and then they adjusted, and there will have a real
problem.