Task Purpose The purpose of Assessment Task 3 is to have students undertake an analysis of the governance structures and the effects of flawed governance structures within a firm. Task Topic Within...

STRATEGIC MANAGEMENT
ANALYSIS OF THE GOVERNANCE STRUCTURES AND THE EFFECTS OF FLAWED GOVERNANCE STRUCTURES WITHIN A FIRM
Table of Contents
Introduction    3
1. A background to the firm and its pre-existing governance structures    3
2. An analysis describing what led to the governance flaws in the firm    4
3. A discussion of the effects of the tweet upon the firm, the CEO and the market    4
4. An explanation of the actions taken to redress the governance flaws in the firm by the firm and by government    5
Conclusion    6
References    7
Introduction
Corporate governance is all about promotion of corporate fairness, transparency and accountability. It means that business is responsible and accountable for present and future needs of all stakeholders. Business is a ‘dogs eat dogs’ world. The business environment can be a lonely and hostile. It is a struggle. All the time, either you will face the dilemma to trample on others, or you yourself will be trample on. There can be situations where there is no room for ethics, because people would fight for their own interests.
That is why; the need of corporate governance emerged. Corporate governance is a system of processes, rules and practices, by which company is control, direct and involves balancing of interest of many stakeholders of the company. Stakeholders include manager, suppliers, investors, customer, government and community. It simply protects the interest of those who have effective control. The core value of corporate governance includes accountability, transparency, responsibility and fairness (Du Plessis, Hargovan & Harris, 2018).
1. A background to the firm and its pre-existing governance structures
Corporate governance followed by any company is the distribution of the rights and duties of all the participants in the company. It is to ensure that everyone in the organisation follows transparent and appropriate decision-making process. Tesla founded in 2003 by a group of engineers. The company focuses to not only build the electric vehicle but also provide clean energy generation. It believes that future should stop rely on fossil fuels. The company is producing more accessible and affordable products to more and more people (Tesla, 2020).
The pre-existing governance structures of the Tesla had some fault and issues. In 2018, company faced the problem of cash burns, safety of the vehicles, production capacity and a series of employment related lawsuits. These all serves to create negative publicity of the company. Their investors started doubting the long-term value of the Tesla. Elon’s plan was to enable the public shareholder and to retain the share in unidentified fund that helps to limit sales in every six months.
It would force the investors to accept immediate cash premium. Tesla sustainability record is a major part to its customers, workers...