In recent times, organizations have had to adapt their activities and their management to the changing economic and technological environment. However they may not always be successful in doing so. The developments are a clear indication that the current economic crisis has claimed the heads of several banks. After the resignation of the bosses of Merrill Lynch and UBS, one of the heads of Citigroup, Chuck Prince, was forced to resign by the Board of Directors. In France, the announcement of the immediate departure of Alain Levy, the CEO of the music branch of EMI Group, and his right hand man David Munns by Eric Nicoli the Chairman of the group, was unexpected. Decline in sales was cited as the reason for their exit. The owners of a company recruit employees to various positions depending on their competencies.
[...] The agency theory suggests that a firm may be viewed as a nexus of contracts. An agency relationship arises when a person engages another person to perform a service that involves some delegation of decision- making authority. The shareholder delegates to the Board of Directors, who delegates to the Director-General, who in turn delegates certain tasks to subordinates or contractors. In these relationships, there is a lack of coordinated information sharing between different contractors and to monitor the agents, the company must establish procedures that generate agency costs. [...]
[...] Thus many companies are now showing a genuine interest in adopting codes of conduct that are ecologically aligned Conclusion The legitimacy of the leader is thus based on a convergence of interest with the owner To promote the interests of all concerned parties, the introduction of new management practices have been implemented, including the ones through corporate governance. The common goal of the CEO and the owner should be to maintain good performance for the sake of durability and longevity of the company. [...]
[...] II Maintaining the performance of companies in a volatile environment The manager must thus maintain cordial relations with the owners and take the decisions necessary to ensure effective performance of the company. It is a goal that is becoming increasing complex due to economic and geographic instability. The leader must therefore implement all necessary means to meet the expectations of owners and customers. The measures of performance must therefore be based on internal and external factors that influence the development of strategies The action on the internal factors of performance is conditioned by the strategic choices To ensure sustainability, the company must ensure its development potential in the medium and long term. [...]
[...] According to the analysis of Jensen and Meckling, it is possible to identify three sources of conflict in a company. On one hand, is the conflict arising from self-interested behavior. Managers may look at accomplishing their personal goals without trying to increase the benefit to the firm, thus entering into conflict with the requirements of the shareholders. The choice of management executives, who work for their own benefits, may encumber the performance of the company both in the short term and in the long term. [...]
[...] These include the operating system, establishment of project groups and quality groups, an intense communication policy through which employees may clarify and discuss community issues, and collective incentive schemes The action on the external factors of the performance aims to transform its environment into a source of competitive advantage The leader must take in to account the external factors that influence the prevailing business environment to maintain performance. The managers of an organization should be able to use these elements to transform these influences into a source of competitive advantage. [...]
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