Corporate Governance on Organizational Performance Essay

Pages: 8 (2604 words)  ·  Bibliography Sources: 8  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Management

However, we have to note that, best practices of management of the organization will not fully reflect the performance of an organization. One has to understand that human have different strengths and are creators with different mindsets (Adams, Almeida & Ferreira, 2005).

"Best practice" on customers

Customers are consumers of products created in corporations. Their importance is crucial to the performance of the organization. For the Airline Company, the need of customers to travel has led to the growth of the flight companies. Consumers' rights have continually influenced performance of the organization. Consumers have different taste and preferences, which have made organizations, develop strategies to meet the ever-growing demand. These changes in customer preferences have increased competition in almost every field. Therefore, any organization that needs to improve its performance must seek to understand its customers. The organization should ensure their production procedures are efficient. The organization should be ethical when providing services or when producing goods (Adams, Almeida & Ferreira, 2005).

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There are certain conditions or standards of trade that every management team should practice when satisfying needs of customers. Customers are always right; it is up to the corporation to reflect on best performance of an organization. A company reaches at the competitive advantage when their marketing strategy is stronger than that of competitors. For competitiveness advantage achievement, best practices are crucial in the development of strategies. Strategic management decisions affect the performance of an organization and on its reputation. Reputation of an organization reflects on the efficiency of the organization in the market (Larcker, Richardson & Tuna, 2007). Marketing structure of Emirates ensures that they remain a superior Airline organization in the world. Reputation on the way they handle employees needs, reliability, their social responsibility, leadership, management and their responsibilities on quality, have made the organization prosper.

Essay on Corporate Governance on Organizational Performance Assignment

A strategy of "best practice" promotes customer contributions to the overall organization output. Corporate reputations include trustworthiness, responsibility, credibility and reliability on the part of the corporation. Reputation of organizations attracts employees, customers and institutions. Employee's health and safety needs, investments on community projects, respect of the people surrounding the organization needs management considerations. Organizations should adhere to the principle of fair competition, transparency, accountability and in maintaining supplier relationship. Company's reputation influence on customers loyalty and thus increase on performance of organizations. For Emirates, good reputation status acquisition is an effort of all departments. Employees of all departments promote reputation. Good reputation is an asset, for any organization, an application of it enhances performance. Customers prefer organizations that produce high quality products and services (Cornett, Marcus, & Tehranian, 2008). Good reputation encompasses employee relations, leadership structure, and social responsibility of an organization and communication system. Financial consideration may include financing activities that promote customer relations. These best practices promote performance of Emirates Airline.

Shareholders "Best Practice"

Shareholders are particularly significant in corporate governance. Shareholders own organization their contribution constitute the organization. For Emirates, corporate governance helps in protecting assets of shareholders and improving organization performance. Institution shareholders have a significant influence on performance of organizations and hold the large share holdings. The goal of companies is to reflect on interests of shareholders and that of the management. These means that companies should use best governance policies (Bebchuk, Cohen & Ferrell, 2009). These policies designed with the approval of the institutional shareholder promote performance of organizations. The importance of these policies is that it provides a base for broad solutions, align both shareholder and management interest, enhancing the value of the firm by increasing on productivity. The strategy determines misconduct or fraud and promotes participation of shareholders.

By institutions meeting best practice, they fulfill their responsibilities on investors. Corporations use all technological trends in order to serve as a leader in the modern financial market. The roles of owners of a public corporation are decision making. Owners have voting rights that are relative to the amount of shares held. Since there are different classes of shareholders, super class is the highest class of all and their contribution are highly critical. Shareholders responsibilities are the selection of members of the board of directors. Shareholders influence performance of companies since they have the power to hire and fire board members. If the performance of the board of director is in question shareholders have right to reconstitute the whole board, it is the responsibilities of shareholders to conduct audits, manage finance and evaluate corporate financial system (Aguilera, Gospel & Jackson, Filatotchev, 2008).

Shareholders ensure those executives compensate executive based on their returns. Executive's compensation is a reflection of to the market prices. Shareholders determine all classes of workers to compensate. They review salaries and should provide detailed information on all information about rewards. Shareholders influence performance of organizations by the development of organizational policies with the approval of shareholders. Shareholders develop policies that incorporate those of the state. These policies improve the firm's reputation and performance rating. For Emirates, company's stock listed in the Mumbai stock exchange, has extensive terminals. The bureau provides constant information to shareholders (Bebchuk, Cohen & Ferrell, 2009). The organization publishes reports on their performance and avail them to their shareholders. One can conclude "best practice" on the part of shareholders affects companies' performance.


There is a need for the corporation to develop effective strategies. Application of best practices is essential to full realization of company's goals. The development of corporate governance procedures is essential in the realization of profitability. Management of organizations, shareholders and customers play an essential in the realization of the goal. Therefore, organizations should strive to satisfy the needs of shareholders. Financial assistance is essential in fulfilling the needs of customers, creditors, management and shareholders.


Richardson, D.F., Larcker, S.A., & Tuna, I. (2007). Corporate governance, accounting outcomes, and organizational performance. The Accounting Review, 82(4), 963-1008.

Aoki, M., Jackson, G., & Miyajima, H. (2008). Corporate governance in Japan: Institutional change and organizational diversity. Oxford University Press.

Aguilera, R.V., Gospel, H., & Jackson, Filatotchev, IG. (2008). An organizational approach to comparative corporate governance: Costs, contingencies, and complementarities. Organization Science, 19(3), 475-492.

Adams, R.B., Almeida, H., & Ferreira, D. (2005). Powerful CEOs and their impact on corporate performance. Review of Financial Studies, 18(4), 1403-1432.

Karamanou, I., & Vafeas, N. (2005). The association between corporate boards, audit committees, and management earnings forecasts: An empirical analysis. Journal of Accounting research, 43(3), 453-486.

Adams, R., Hermalin, B.E., & Weisbach, M.S. (2008). The role of boards of directors in corporate governance: A conceptual framework and survey (No. w14486). National Bureau of Economic Research.

Bebchuk, L., Cohen, A., & Ferrell, A. (2009). What matters in corporate governance?. Review of Financial Studies, 22(2), 783-827.… [END OF PREVIEW] . . . READ MORE

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Corporate Governance on Organizational Performance.  (2013, July 24).  Retrieved May 29, 2020, from

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