Dell Inc - Research Paper Example

Strategic Implementation Contents 0 Introduction 2 2.0 Corporate Governance 2 2 Organizational Structure and Strategic Leadership 3
3.0 Analysis 3
4.1 Evaluation and Solution 4
5.0 Conclusion 4
6.0 References 5
Strategic Implementation
1.0 Introduction
This report will be developed in order to highlight the importance of understanding the phenomenon of agency conflict and its legal remedies. Along with this, this paper will also analyze prevailing organizational structures in international information industry and identify a significant problem in order to provide a viable solution to the difficulty at hand.
2.0 Corporate Governance
Agency theory believes that agency problem occurs when agents do not comply with the obligations, which they made to the principals in a contractual form(Tang and Wang). Along with this, if managers (agents) manage to obtain support of directors concerning their practices, which do not deliver optimum level of value to the shareholders (principals) then the problem of agency, aggravates into corporate governance problem(Kashyap, Antia and Frazier). Therefore, governments use to intervene in these kind of cases because, shareholders simply do not have sufficient resources and competencies to pinpoint a fraud on a directorial level. However, law bounds organizations to announce their financial performance publically. At the same instance, governmental financial law enforcement agencies analyze the organizational practices of corporations in order to quantify their compliance with the general premises of maximization of shareholders wealth(Wojcik). However, modernly governments are planting their representatives in board of directors, so that they can monitor the fulfillment of the promises made by managers to shareholders in real time.
2.1 Organizational Structure and Strategic Leadership
Another purpose of this paper is to define hybrids of widely accepted organizational structures worldwide. However, for this purpose it is important to note that there are two basic organizational structures known to the world, which are centralized and decentralized formations of organizations(Homburg, Jensen and Haiin). The former one is characterized with centric leadership and authority therefore, all of the departments take orders and instructions from a formalized chain of command. On the other hand, the latter one can be defined as something, which is attributed with delegation of authority and job autonomy. Under this mechanism, top management is only responsible for providing broad objectives for middle and line management to achieve. Nevertheless, top management in this case does not concern itself to the operational layout through which intended goals are being fulfilled. But, with the passage of time, centralized organizational setting evolved into as structure with a separate department for innovative project management thus, incorporating characteristics of decentralized organizational structure. On the other hand, informal organizational structure grew more intense through the introduction of self-managed teams(Singh).
3.0 Analysis
The most common example of the industry with decentralized organizational structure is IT, which through its focus on innovation granted its employees with overwhelming level of job autonomy in order to enhance their creativity. However, it is also important to notify that, information industry is more prone to corporate fraud because, of its highly technical nature which an ordinary shareholder cannot comprehend.
4.1 Evaluation and Solution
In parallel, to the astonishing development of Dell into a major competitor into the technological marketplace, is now plagued with the aspect of inefficiency, due to its inability to develop impressive technological products since last five years. This trend is because of Dell’s propensity to bless its employees with too much autonomy, which consequently caused its ability to innovate effectively. In the light of this argument, Dell is suggested to implement relatively centralized approach to management in order to provide viable direction to its R and D department.
5.0 Conclusion
This report analyzed the current condition of corporate governance and came to acknowledge that this exercise is often plagued with agency problem. However, information technology is the most suspicious industry regarding corporate frauds. Additionally, Dell is facing an internal threat based on its inability to innovate effectively in recent years.
6.0 References
Homburg, C, O Jensen and A Haiin. "How to Organize Pricing? Vertical Delegation and Horizontal Dispersion of Pricing Authority." Journal of Marketing 76 (2012): pp.49-69.
Kashyap, V, K Antia and G Frazier. "Contracts, Extracontractual Incentives, and Ex Post Behavior in Franchise Channel Relationships." Journal of Marketing Research (2012): pp.260 –276.
Singh, R. "Three’s Company: Leadership in the Three Spheres of Strategic Influence ." Feliciter 58(5) (2012): pp.24-26.
Tang, K and C Wang. "Corporate Governance and Firm Liquidity: Evidence from the Chinese Stock Market." Emerging Markets Finance & Trade 47(1) (2011): pp. 47–60.
Wojcik, D. "Convergence in corporate governance: evidence from Europe ancJ the chalienge for economic geography." Journal of Economic Geography 6 (2006): pp. 639-660. Read More