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Module Code: OTGB 201

Module Name: Role of Organizational Culture in Resolving Conflict in the Workplace

Format: Essay

Title: The Case of Twitter and its Solution Strategy with Corporate

Governance Practices

Student Name and ID:

Word Count: 771

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Table of Contents
Introduction 3

Discussion 3

The Case 3

Corporate Governance to Resolve the Conflict 4

Conclusion 5

References 6
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Introduction

Corporate governance practice is a significant element of good corporate culture. It is the

system of practices, rules and processes through which a company is controlled and directed.

Corporate Governance involves different stakeholders and balancing their interests is crucial

through corporate governance practices. Corporate governance involves every sphere of

managing stakeholders from internal control to the action plan, corporate disclosure and

performance measurement. This module will analyse the Twitter Scandal case and recommend

several strategies for corporate governance maintenance to resolve the issue.

Discussion

The Case

Elon Musk, the current owner and CEO of Twitter, is accused by the employees that he

has refused to pay the bonus amount 2022. The report states that the former CEO Chief Twit has

promised that employees will pay 50% of their target amounts of the Twitter employees as a

bonus in 2022. Before Elon Musk came to power as CEO of Twitter, the employees used to have

their bonuses annually. Against the announcement of Elon Musk for not paying the bonus, a

class action lawsuit on behalf of the former and current employees was filed by Mark Shobunger

who was the senior director of Twitter. Elon Musk further announced that this decision is on the

behalf of cost-cutting of the organisation (Biswas, 2023). Since the takeover of the company by

Elon Musk, Twitter lists more than 50% of its advertising revenue as different brands have

stopped trusting this social media site due to pornographic, violent and hateful content. Twitter

has also shedded more than 75% of the former employees through resignation and layoffs.

The interesting fact is that Elon Musk since his acquisition of the company has been

continuously alleged for not paying the bills and rent and the back pay and severance. There
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were 1700 copyrights and Elon Musk was sued with the payable amount of $250 million for the

infringement case by the National Music Publishers Association. All these cases show the

incapability of Elon Musk to maintain transparency, fairness, accountability and responsibility in

the organisation (Choi, Choi, Chung & An, 2020).

Corporate Governance to Resolve the Conflict

According to the literature corporate governance is nothing but the collection of controls,

rules, resolutions and policies that direct the corporate culture and behaviour. The board of

directors has a pivotal role in the corporate governance system and the shareholders and advisors

are crucial stakeholders who can affect the system. Most successful organisations practise an

exemplary level of corporate governance through good corporate relationships, environmental

awareness and maintaining ethical behaviour (Corte, 2020). The corporate governance practices

are mostly decided and directed by the direct stakeholders of the board members. In the case of

Twitter, the main stakeholder who makes all decisions regarding the dividend policies, executive

compensation and officer appointment and resignation is Elon Musk.

The principles of corporate governance state that the maintenance of fairness is crucial by

treating the employees, shareholders, communities and vendors with fair and equal consideration

(Dat, Mau, Loan & Huy, 2020). Transparency is another principle of CG that reflects that the

accuracy and offering of clear information to the shareholders and stakeholders is crucial. Elon

Musk has failed to maintain fairness by not treating the employees fairly by refusing their

bonuses. On the other hand, stakeholders were misinformed about the bonus system. Moreover,

the lack of responsibility of The CEO is visible through the insensible resignation and

withdrawal of the bonus system (Karyatun et al. 2023). Accountability failure is also noticed

with the not payability of the tax, rent and other payouts.
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The Anglo-American Model considers the stakeholder theory. It states that the

stakeholder framework of an organisation must be constructed in such a way that the

shareholders and directors can be controlled in the organisation. Stakeholders like the employees

and vendors can affect the organisation due to a lack of control (Almagtome, Khaghaany &

Önce, 2020). The maximisation of the interest of the stakeholders influences their dedication and

morale. In the case of Twitter, Elon Musk needs to consider the interests of the employees by

offering the promised bonuses to them. It will save their interest and thus a positive brand image

can be developed.

Moreover, the maintenance of transparency in the financial position is crucial for Twitter

(Antwi-Adjei, Kong, Kwame & Antwi-Adjei, 2020). The former CEO confirmed their bonus

system which was refused by the current CEO of Twitter resulting in a scandal and lawsuit

against Twitter.

Thus it is recommended to Elon Musk to consider the interest and influence of the

important stakeholders and establish transparency in the financial activities and decisions.

Conclusion

Corporate governance is a crucial organisational behavioural practice that can help an

organisation enhance its brand value and brand image. The operational culture under Elon

Musk’s operations has created dissatisfaction across the workforce which is an example of bad

corporate governance behaviour.

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References

Almagtome, A., Khaghaany, M., & Önce, S. (2020). Corporate governance quality, stakeholders'

pressure, and sustainable development: An integrated approach. International Journal of

Mathematical Engineering and Management Sciences, 5(6). Retrieved from:

https://avesis.anadolu.edu.tr/yayin/56bafb67-532e-4a8f-b4ed-2e67be99744f/corporate-

governance-quality-stakeholders-pressure-and-sustainable-development-an-integrated-

approach

Antwi-Adjei, A., Kong, Y., Kwame, O., & Antwi-Adjei, N. A. (2020). A Review: Corporate

Governance and Sustainability. International Journal of Scientific Research in science

and technology, 7(6), 79-89. Retrieved from:

https://www.academia.edu/download/65360617/7150.pdf

Biswas, S. (2023, June 21). Twitter sued again! Employees say Elon Musk refuses to pay 2022

bonuses. Mint. https://www.livemint.com/companies/news/twitter-sued-again-

employees-say-elon-musk-refuses-to-pay-2022-bonuses-11687346743525.html

Choi, P. M. S., Choi, J. H., Chung, C. Y., & An, Y. J. (2020). Corporate governance and capital

structure: Evidence from sustainable institutional ownership. Sustainability, 12(10),

4190. Retrieved from: https://www.mdpi.com/2071-1050/12/10/4190

Corte, M. A. B. (2020). How social media usage by managers affects corporate value: the case

of Elon Musk (Doctoral dissertation). Retrieved from:

https://repositorio.ucp.pt/handle/10400.14/31326

Dat, P. M., Mau, N. D., Loan, B. T. T., & Huy, D. T. N. (2020). COMPARATIVE CHINA

CORPORATE GOVERNANCE STANDARDS AFTER FINANCIAL CRISIS,

CORPORATE SCANDALS AND MANIPULATION. Journal of security &

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sustainability issues, 9(3). Retrieved from:

https://jssidoi.org/jssi/uploads/journals/Journal_of_Security_and_Sustainability_Issues_

Vol9_No3_print.pdf#page=203

Karyatun, S., Yuliantini, T., Saratian, E., Paijan, P., Soelton, M., & Riadi, E. (2023). Towards

The Best Model Good Corporate Governance And Knowledge Management To Improve

Performance Through Job Satisfaction. Jurnal Riset Bisnis Dan Manajemen, 16(2), 236-

245. Retrieved from: https://journal.unpas.ac.id/index.php/jrbm/article/view/9891