Corporate Governance

Corporate Governance

Daisy Chesley

Walden University

Abstract

In this paper, I will discuss alternative goals for the maximization of wealth. I will also compare a firm in the international market and the different goals and strategies practice in other countries versus the United States. I will conclude with contrasting the difference between stakeholders focus goals and shareholders focus goals and possible problems that may arise between the two.

Alternative Goals for Shareholder Wealth Maximization

The financial management objective is to earn the maximum profit for an organization. In exploring ways to maximize profit, the financial manager must realize the importance of increases in profit that may increase risks. Therefore, consideration must be given to factors involved in the organization as a whole, and an increase in profit cannot be the sole component for maximizing earnings for the organization.

Financial managers may look at alternatives, decide the timing of profits, and what is beneficial to the organization. For example, there may be two alternatives where the total profit is equal. One alternative earnings may transpire prior to the other alternative, which is beneficial to the organization, because of opportunity for the organization to reinvest.

In the past, organizations have been more concerned with maintaining their status then in increasing the shareholder wealth. This is changing. Financial managers are well aware that they must be sensitive to shareholders concerns. Organizations insensitive to shareholders will realize poor stock prices and undesirable takeovers and proxy fights for control (Goals of Financial Management, 2008, para. 11).

. U. S. Goals Differentials

TESCO is a retailer store located in 14 countries, including the United States (U.S.). TESCO originated in the United Kingdom (UK) as a food marketer and grew their business to include retail and on-line retailing. In 2007, TESCO launched their first...