Case Study Essay Example | Topics and Well Written Essays - 250 words - 6

Case Study - Essay Example The company found itself left out in the cold financially when they were blocked from accessing needed investment resources. An additional significant internal influence in the demise of Burgmaster was a sense of complacency (which damaged the entire industry) that led to a drop in quality, and the neglect of the characteristic benefit that was formerly most associated with the company: innovation. External factors also played an important role in this organizational tragedy. Some would argue that the political environment at the time is what doomed Burgmaster, as it failed to adequately protect the company from international competition. The competing businesses may have been the most crucial issue. Japanese companies were quick to capitalize on all opportunities, including a swing in market demands toward the perceived (and real) benefits associated with Asian technology. Accordingly, the operational strategy that would have been the best hope for saving Burgmaster should have been focused on improving

Defense strategies against hostile takeovers Thesis

Defense strategies against hostile takeovers - Thesis Example Dismissal of the existing employees would mean that the acquiring company will have to pay hefty benefits as send-off packages to the dismissed employees (Harris, 1990). This makes acquisition expensive for potential acquirers, making them to think twice about their acquisition intentions. The Golden Parachute is effective to the extent that it benefits stakeholders and enables a company to prevent any hostile takeover (Harris, 1990). Golden Parachutes make it easier for stockholders to hire and retain managers in industries that are prone to mergers and acquisition. The defense mechanism also helps the executive to remain objective about the company during a takeover process. Furthermore, it increases the cost of a takeover; hence discouraging bidders from acquiring the target company. This is because Golden Parachutes make it prohibitively expensive for potential acquirers to acquire a target company if they want to dismiss the managers of the target company. Dismissing managers in a company with Golden Parachutes comes with a high price. Golden Parachutes were applied at Fortune 1000 companies from 35% in 1987 to 81% in 2001. Citigroup Inc. applied Golden Parachute when they offered John Reed $30 million as severance pay and $5 annually for life. A company seeking to acquire another company may try to get representations in the board of the targeted company so that the acquirer can have voting power and influence other board members to accept the bid or persuade shareholders to accept the takeover. This type of defense against takeovers requires the approval of shareholders in a shareholders’ meeting in order to be created. Members of the board are chosen with the support of shareholders. In order to be a member of staggered board, the acquirer needs to purchase shares to vote in order to enable a single shareholder to sit with members of the targeted company’s board (Bebchuk et al, 2002). Staggered board makes the process