Managing Integrated Marketing Communication
Integrated marketing communication is an approach to promote products and services (brand promotion) where various modes of marketing are integrated so that similar message goes to the customers. According to integrated marketing communication, all aspects of marketing communication work together to promote brands more effectively among end-users and also for better results. Brands are promoted […]
Business Marketing Models
There are primarily three models in business to business marketing: Business Model 1 – Traditional Local Small Business Model The above model includes small locally operated businesses which are not much organized. Organizations categorized under Traditional local business model still use primitive methods of promoting a particular product or service. Such businesses are generally not […]
Integrated Marketing Communications – Meaning and its Components
It is essential for organizations to promote their brands well among the end-users not only to outshine competitors but also survive in the long run. Brand promotion increases awareness of products and services and eventually increases their sales, yielding high profits and revenue for the organization. To understand integrated marketing communication, let us first understand […]
E Business Transitions – Migrating to E Business
Migrating to E Business has become inevitable. All business Organisations have recognised this fact. It has been understood that E Commerce is going to be the sales engine for the future. Understanding and accepting the need to evolve a E Business strategy brings with it more challenges. The first and foremost challenge that the Organisations […]
What is Brand Loyalty and How to Develop It
Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from another brand which he does not trust. It is measured through methods like word of mouth publicity, repetitive buying, price sensitivity, commitment, brand trust, customer satisfaction, etc. Brand loyalty is the extent to which a consumer constantly buys the same brand […]
The previous articles discussed how shareholders play an important role in promoting good corporate governance. This article looks at the patterns of shareholder ownership that are prevalent in organizations in the corporate world. To start with, any company whether it is private or public limited needs to have shareholders who contribute equity to the setting up of the company and who in turn trade the shares so as to enhance the market value of the firm. In this way, shareholders exercise ownership over the company with their stake in the company.
The forms of shareholder ownership can be in many ways and some of them include outright control of the company by the majority shareholders, participation on the board of directors in proportion to their holding in the company and finally, being minority shareholders in a company and having voting rights accordingly. These patterns of shareholder ownership are more or less followed all over the world.
Turning to the aspect of exercising control over companies, shareholders often resort to having their representatives on the board of directors who would then see to it that the interests of the shareholders are being taken care of. This is the dominant view of the shareholder ownership where the numbers and the way in which a majority stake is held by a particular shareholder bestow ownership rights to the shareholders. Of course, theoretically speaking, all shareholders are owners of the companies and accordingly have power over the actions of the company. However, in practice, it is usually those with the greater numbers who exercise control over the companies. Hence, it can be said that shareholder ownership follows democratic principles wherein the largest shareholder has more control than the minority shareholders.
It is often the case that shareholder ownership is seen as a phenomenon that is fraught with risk. This is because the shareholders by virtue of their holdings represent ownership which can also boomerang if the company goes belly up. What we mean is that since shareholders are owners of the companies, in case of failure they take the hit as well. This is not the case with those who own debentures and bonds in the companies. Hence, it is the shareholders who are liable for risks. On the other hand, as long as things are going fine, it is the shareholders who reap the rewards for their holdings and their risk taking behavior.
Finally, shareholder ownership is a phenomenon that allows for fair corporate decision making and a sense of responsibility and shared risk taking.
The point here is that without a body of investors who would be willing to invest in a company, the promoters might not be able to raise the capital that is needed for the firm. Further, the risk is spread out over more numbers rather than the promoters having to shoulder the entire burden. In these ways, the shareholder ownership has evolved to the point where it has become a prerequisite for good corporate governance.
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