Pros And Cons Of Alibaba Goes Business

Corporate governance: “The set of laws, policies, incentives, and monitors designed to handle the issues arising from the separation of ownership and control.” (Cornett, Adair, & Nofsinger, 2016, p. 16).

Corporate governance is a set of actions used to handle the relationship between stakeholders by determining and controlling the strategic direction and performance of the organization. Corporate governance major concern is making sure that the strategic decisions are effective and that it paves the way towards strategic competitiveness. (Hitt, Ireland, Hoskisson, 2017, p. 310). In today’s corporation, the primary objective of corporate governance is to align top-level manager’s and stakeholders interest. That is why corporate governance is involved when there is a conflict of interest between with the owners, managers, and members of the board of directors (Hitt, Ireland, Hoskisson, 2017, p. 310-311).

Although stock implies ownership, few equity investors expect to play a role in running the companies whose shares they buy. Such firms are widely held, and few stockholders have large enough blocks of stock to influence management decisions. In small business, of course, owners usually run their companies.

Common stockholders are the basic owners of a corporation, but few stockholders of large corporations take an active role in management. Instead, they elect the corporation’s board of directors to represent their interests. Board members seldom get involved in the day-to-day management of the company. They establish the basic mission and goals of the corporation and appoint

• Control: An S- Corporation only allowed a small number of shareholders and the shareholders must be

Managers and shareholders are the utmost contributors of these conflicts, hence affecting the entire structural organization of a company, its managerial system and eventually to the company's societal responsibility. A corporation is well organized with stipulated division of responsibilities among the arms of the organizational structure, shareholders, directors, managers and corporate officers. However, conflicts between managers in most firms and shareholders have brought about agency problems. Shares and their trade have seen many companies rise to big investments. Shareholders keep the companies running

A company that sells stocks to people in order to invest in to the company and make those stocks profitable and more expensive.

Double taxation: A corporation must pay income taxes on its profits, and then shareholders must also pay personal taxes on the dividends they receive from the corporation.

Shaw communications equity structure is comprised of series A shares and series B shares. Series B shares trade on the Toronto Stock Exchange, and 50% of these shares are owned by the top 25 shareholders. 40% of the shares are owned by financial institutions as part of their investment portfolios. Only 12% of the shares are owned by insiders, i.e. Shaw family and/or executives. Since these shares don’t have voting options, their ownership is mainly for capital gain and dividend purposes. On the other hand, series A shares have an embedded voting option, and 78% of the shares are owned by the Shaw family within the Shaw Family Living Trust (SFLT1). Therefore, Shaw family has total control of the company’s decisions. This increases the overall risk to the firm as ordinary shareholders have no say over the operations of the firm. The main implication is agency risk, as no one can exercise a final vote but the Shaw family. Company decisions could be biased towards Shaw family’s interest, and not in the best interest of other shareholders. Bad signals could make investors to withdraw their investments from the company, and Shaw’s market capitalization would plummet. The dual class structure and the current ownership structure increases the operating risk, and hence the required rate of return for equity. As a consequence the WACC of the firm is deemed to increase.

The law gives corporate managers a great deal of flexibility in determining their capital and governance structure, relying on the market for capital to create competition that will allow shareholders to "choose" the one they think is best.

Alignment of family and business. By keeping family, management organization, and ownership balanced, we ensure healthy family ties, ongoing business performance, and next-generation continuity.

One major flaw built within the business model of Alibaba is its ability on controlling the merchants and their quality of goods. Since both Taobao and Tmall relied on third party sellers to provide goods and services, it lacks the ability to enforce strong quality control and eliminate counterfeit goods. In fact, consumers were well aware of it and this issue had already been damaging Alibaba’s reputation in online retailing markets. However, its major competitor, JD.com would be having much stronger abilities and incentives to eliminate these

* Equity value is established for the firm * Current shareholders can diversify personal portfolios

The basic principal relating to the administration of the affairs of a company is that “the will of the majority is supreme”. The general rule is that the decisions of the majority shareholders in a company bind the minority. 1 In a world that recognizes ‘simple majority rules’, minority shareholders of companies are by default vulnerable to oppression,

In cross-shareholding alliance the companies own stocks in another company and decisions should be made together. Both firms are still independent