Coporate Governance & Globalisation Essay Example | Topics and Well Written Essays - 2250 words

Coporate Governance & Globalisation - Essay ExampleThe troubles in the entire assemble culminated in the sale of this subsidiary. This report try outs problems leading to the collapse and recommends relevant corporate governance measures, which would have prevented such(prenominal)(prenominal) managerial malpractices. Introduction Daewoo is a South Korean company founded in the late 1960s. It represented pioneering entities in the automobile sector in not only South Korea but also Asia. Kim Woo Choong contend a vital role throughout the early years of the corporation. The entity benefited massively from the authoritiess blessing. The government enacted policies, which ensured that the entity did not face major competition. Additionally, it offered credit to the entity at friendly rates. This reduced the overall cost the entity incurred. The reducing of cost gave the entity a massive competitive edge over rivals. This shows the impact of governments goodwill on the entitys fortun es. The success of the entity did not last long since it encountered major managerial problems. This write-up will analyze problems which this entity encountered culminating in its sale. Further more(prenominal), it will propose corporate governance measures that would have impeded the chaos that emanated and led to its collapse. Daewoos history and managerial problems Daewoo is a conglomerate with numerous subsidiaries, which included Daewoo Motors, Daewoo Bus Company, Daewoo Electronics, Daewoo Heavy Industries and Daewoo Securities. This was a massive corporation with several subsidiaries and joint ventures. The sheer size and complexity of this entity made its management challenging. Managers in such an entity encounter countless constrains. The multinational had diversified its operations into several industries. Diversification enabled the entity to sustain its financial stability (Lopez 2000). The collapse of this entity resulted from some diverse factors. The governments p olicies were key to the collapse of the entity. The government enacted protectionist policies. Such policies ensured that the entity got tatty raw materials. This reduced the entity cost allowing the entity to make phenomenal profits. Additionally, the entity got cheap financing from the government. Similarly, this reduced its costs availing more funds for further investment. The government also focused on policies, which favoured one entity. Therefore, the government failed to support publication of other smaller entities. Therefore, such policies shielded Daewoo from competition, costly raw materials and high cost of credit. This provided a better market for the entity to succeed. The government seemed not to have a clear policy to ensure fair treat in its economy either. These policies were friendly to the entity since the entity gave political support in exchange for such skewed political strategies, which favoured the entity (Lopez 2000). The expansion of the entity entail ed several five-year plans. These plans would outline what the entity should accomplish within the period. Daewoo Motors commenced operations in the early 1980s. Daewoo Group acquired an entity that was weakness in the automobile sector owing to competition from Hyundai. Using its massive resources, Daewoo Group turned most the fortunes of this entity and renamed it Daewoo Motors. This acquisition added another subsidiary to the already expanding corporation. The Daewoo conglomerate seemed to be undertaking an expansion strategy. However, such a strategy