Finding the Best Buy Case Study (ANSWERED)

QUESTION

Read Case Study 4 “Finding the Best Buy” (page 57) Book: Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic Management.Mason: Cengage Learning.

Corporate governance has become a hot issue in the U.S. over the past two decades. From your analysis of the case study, determine two possible corporate governance challenges that might be faced by Best Buy as a result of its rapid growth and why they could become corporate governance issues.
Make recommendations for how Best Buy can overcome these challenges. Provide specific examples to support your response

ANSWER

Finding the Best Buy Case Study

Corporate Governance Challenges that might be faced by Best Buy

The case study brings to light various governance challenges that Best Buy Company may face in its quest to achieve growth and increase its market reach (Hitt, Ireland, & Hoskisson, 2013). The rapid growth of the company may eventually become irrational, making it highly questionable. As such, there is a high possibility of corporate governance challenges such as unaccountability, operating in an unethical manner, and dishonesty. The quick growth of the company may suggest that some assets, including funds, may either be untrue or exaggerated since every company or business organization has to go through the normal profit-making process to achieve growth, a process that may not happen so rapidly (Churchill & Mullins, 2001). Exaggerating funds or any other assets is a form of dishonesty and unethical behavior. Unaccountability arises when the members of the company fail to conduct themselves in the right manner, resulting in erroneous reporting. Rapid company growth may suggest that the records in the books of accounts of the company have been cooked, which is a violation of corporate governance principles and professionalism.

Recommendations

Some of the recommendations that the company can put in place to overcome the corporate governance challenges that it may face as a result of rapid company growth include ensuring consistent supervising of the employees and carrying out proper periodic audits. With consistent employee supervision, the employees of Best Buy will conduct themselves in the right way and avoid a breach of duty and task omission. By conducting periodic auditing, the management will ensure the validity of the company’s books of accounts. Therefore, the issues discussed may be avoided through the use of supervision and auditing.

References

Churchill, N. C., & Mullins, J. W. (2001). How fast can your company afford to grow? Harvard Business Review, 79(5), 135-143. https://hbr.org/2001/05/how-fast-can-your-company-afford-to-grow

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic Management. Mason: Cengage Learning. https://www.cengage.com/c/strategic-management-concepts-and-cases-competitiveness-and-globalization-13e-hitt/9780357033838/