Success of the business at recognizing and satisfying stakeholder interests
Initially, Space Center Inc failed to notice the needs of minority shareholders and even concentrated on family roles and sharing or inheritance of powers over payment of dividends and upholding of transparency through forbidding board participation in decision-making procedures. After the split of Space Center Inc, Space Center Enterprises that was later renamed Meritex was able to cater for the needs and concerns of the stakeholders. A good example is the situation where Harry is worried of the outcome, if Management Company decides to pull out of its dealings with Space Center Enterprises.
Since Don pulled out his Space Center Company from business transactions with the management company, the situation had forced Management Company’s agreement to remain only between them and Harry’s company. Space Center Enterprises therefore had to find ways of strengthening the role of shareholders such as control over intellectual as well as financial capital, and ability to have power of deciding, implementing or terminating management. The company was able to achieve this through acquisition of the Management Company and thus control its CEO and other board members succession ‘procedures.
The acquisition of Management Company gave shareholder a strategic advantage of revising and terminating unproductive managerial agreements thus enhancing their minority ownership power.
One of the third generation CEO selection procedure involved ability to meet the objectives that stake holders had set. The interests of stakeholders are also catered for when the firm ensures that the CEO selection process remains transparent and all the board-meeting discussions are shared with all shareholders. The board and the shareholder’s representatives participated in the process of electing CEO and a succession procedure that would ensure business strength and long-term growth beside the family interest.
The board of members and shareholders through representatives eventually had the power to hold the CEO accountable and ability to fire a non-performing Leader unlike the Harry or prior generation’s management styles.
Available mechanisms to manage relationships with stakeholders and to influence the strategic direction and performance of the company
Evidently, the company have embraced the aspect of shareholder’s representation in firm management as a better and improved style of conducting business especially in the aim of promoting unity, competition and revolution. The company focuses on competition, which calls for total integration of all stakeholders’ views, as a human resource plans and policies, in the aim of reshaping the pattern of conducting business and maintain competitiveness in the global economy.
Unlike the early motive, Space Center Enterprises business plans and policies especially in management-entailed procedures aimed at enhancing family succession plans and business profits. They failed to cater for owners and clients satisfaction. The main difference between earlier generation and third generation management mechanisms or plans of managing shareholders relationships and policies entails the use representation for better enhancement and thus quicker and higher profit margins.
Given the resolution to embrace change, the company formed a strategic plan to influence performance. It also included the shareholders’ policies required for a firm to undergo change or innovations such as integrations of new CEO and management. The company had strategies that addressed the future expectations of the shareholders such as competence of the professionals.
The board of directors for Space Center Enterprises
Space Center Enterprises Board of directors were not successful in fulfilment of their obligations governing over business challenges. According to Michael et al (2008), prosperity of the company’s governance change mechanism depends on the management. Initially the company give the impression of a sole proprietorship, where decisions are solely made and family-related challenges are encountered with difficulties. This indicates that the capacity of the board failed to enhance the easiness and administration required for development of a corporation. Lack of board’s capacity brings about failure. It is the changes such as splitting and the differences of opinions of the CEOs for instance Harry’s decision to have a competent person taking over firm leadership, that enables the company to move a step forward hence flourishing at the end of it all.
In line with Slack and Lewis (2009), a company’s board of directors must centralize on change more than any other business field, by emphasizing and having a positive focus towards plans and possible growth. The board should also have joint methods of passing information to enhance the communication pathways and to help working in partnership. At one time, Don had to make a decision of meeting with the third generation members of the family and ban them from business dealings, without considering the brother’s or board’s directions. This was a clear indication that the board was highly unsuccessful in its role of receiving and admitting views from different perspectives, thus enabling the intermingling and exchange of ideas or experiences.
The board members also failed to have more interactions especially when there were family conflicts. Lack of board member’s interaction in the company meant that it failed to acknowledge itself and its role of governance. According to Edwards and Day (2007), board of governors plays a major role in managerial change. Change in a company does not necessarily depend on how much the company holds but on outweigh of the ideas they have came up with midst a conflict situation, to salvage their market conditions. The business partners such as representatives should have a knowhow of the governance strategy through transparency of the board activities. This is not evident in Space Center Enterprises Board of directors.
The board also failed to engage interaction among different parties within the company, to bring about a common understanding or same perspective over an issue, thus brings change within the company. Space Center Enterprises failed to enhance proper transformation of leadership roles because of poor plans to counter ad Hoc relations or family conflicts relating to business decisions and operations. Company’s board of directors need to ensure constant changes to engage its employees including management into spending more time on understanding customer’s needs as opposed to solving conflicts that relate to leadership roles (Edwards and Day, 2007).
Harry (The CEO) was reluctant to hand over the managerial position and his personal decision to work beyond his retirement time is a compromise of the role of board members over the issue of consulting and appointing directors.
Paddy was or was not qualified to fill in his father’s footsteps as CEO of the newly merged Meritex organization based on strategic leadership responsibilities
Paddy had supreme approaches to business growth as evident during his buyout merge negotiations. He obviously valued results more than his relationships among members and thus had to win their support through results. Paddy is not a good and highly qualified CEO because of this assurance of conforming to procedures and policies such as board decisions. Although good CEOs are personal and caring, they avoid to copy other’s rules and conforming to existing statutes, and are thus more innovative and ready to change board managerial roles for the better (Heifetz, 1994).
At one time, when he noted that his father was not ready to let go the CEO position, Paddy threatened to move out. This is a clear indication of some lust for power. Paddy had management style of functionally analyzing, evaluating and solving problems from a personal perspective, but lacked the leaders’ style of non-functional guidance, in the aim of inspiring and motivating others.
Over decades, the issue of leadership in business concerned the ability to hold top management positions that Paddy aimed to garner. This aspect is obsolete and good CEOs have the ability to have considerations, characterized by an emphasis over good relations with stakeholders. He thus lacked the required openness and shareholder’s mental trust, consequently the probable reason the board agrees to have him as CEO under conditions. They needed an external assistant, who had passion, credibility and connection with people. Secondly, Paddy never showed passion of defining its goals, structure and style of executions.
In line with Hargreaves (2003), strategic leadership responsibilities involves the interpersonal characteristics, which create good working morale since the leader indicates a good degree of concern about humanness and pay attention to the follower’s concerns over the leadership or other aspects.
Did Paddy fail to meet some of the leadership requirements and probably ware endorsed on family advantage over other potential professional? Paddy lacked to show the most critical task focusing on shareholder’s attention, during his quest for CEO position. For instance, He could focus on the current tasks without ignoring the future aspects that could affect the firm. Those problems, concepts, ideas or actions that receive the attention determine firm’s sustainability. Paddy therefore failed to show the strategic leadership responsibilities such as ability to determine important aspect of the firm that receives focus or gathers attention of the shareholders at a given time.
References:
Edwards, H. & Day, D. (2007). Creating Passion Brands: How to Build Emotional Brand Connection with customers. London: Kogan Page.
Hargreaves, A. (2003). Teaching in the Knowledge Society. New York: Teachers’ College Press.
Heifetz, R. A. (1994). Leadership without Easy Answers. Harvard University Press.
Michael A. H, R., Duane I, & Robert E. H. (2009). Strategic Management Concepts: Competitiveness and Globalization (concept and Cases). 8th Ed. Canada: Cengage Learners Publishers.
Slack, N., & Lewis, M. (2008). Operation Strategy. London: Prentice Hall.