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Chipotle relation with Oganizational Structure Controls, and Corporate Governance - Essay Example

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The firm established their business based on a well-functioning corporate governance system. This governance system aims at establishing good relationships among stakeholders and establishing…
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Chipotle relation with Oganizational Structure Controls, and Corporate Governance
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Download file to see previous pages The firm also obtained part of its capital from McDonalds through share offering. From McDonalds, the firm acquired nearly $360 million that rose to almost $1.5 billion. The company managed to gain huge sales because of their unique top-level management system that was effective towards gaining a competitive advantage offer their rivals, which is important in raising the profit margin.
The firm was also among the top companies to introduce a sales system in which customers could customize a healthy food of their preferences, at a considerably cheaper price below other restaurants and food vendors without necessarily compromising on the quality. The company has, therefore, become of one of the favorite food vending company among consumers. As a result the firm has realized a significance increase in size, and has subsequently maximized its shareholders, and stakeholders’ value. With the continued growth of Chipotle, a need for the separation between the ownerships, and managerial roles has emerged. Although this can raise serious problems, Chipotle can overcome the challenges by improving their approach to employees’ welfare, critical for gaining synergy, which in turn offers a competitive advantage within the industry. Their agency relationship is reflected by their standard hierarchy, in which restaurant managers’ report to regional manager, who subsequently report to the company’s director. After the company’s director gathers all of the regional managers’ reports, they present the report to the company president. This, therefore, shows the critical role of running the day to day affairs of the firm. On the other hand, the president of the company only makes critical decisions at the top level, but does not directly participate in the firm’s daily operations.
To enhance the effectiveness of the board of directors, Chipotle applies executive ...Download file to see next pagesRead More
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