Global Tech Scenario Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Global Tech Scenario

1. The key governance issues:

The key corporate governance issue faced by Global Tech at present are as follows:

a) Poaching by the firms

Global Tech is facing competition from several competitors and search firms, who are poaching its employees. Therefore, now it is important for Global Tech to develop strategies to sustain their workforce and talent pool. Due to poaching, the costs associated with employee turnover and attrition has raised serious concerns for Global Tech. So, this issue needs governance as employee retention is a crucial part of corporate governance.

b) Succession planning

Another important governance issue for Global Tech is succession planning. Shareholders now demand excessive disclosure for planning issues for the people, who are planning to leave. However, this area is subject to limits on disclosures; therefore, complete access can’t be granted. For succession planning, Global Tech needs to look at the two components of the succession planning, which are management development efforts and the strategic direction along with future leadership needs. Global Tech has made succession decisions for Maurice Gagnon with respect to the company’s long term plans in an efficient manner (Bowen, 1994).

c) Difficulties in employee retention in our industry as well as in related industries

As companies in the industry are poaching employees from Global Tech; hence, is seen that Global Tech is also facing difficulties in preventing itself from getting poached from other industries. For example in this case, though Ms Jennifer Smith has faced a three year suspension from the Ontario Commission services, where she was not allowed to serve as a director for any publicly traded company, still many of the industry and outside the industry incumbents were aware of her potential. Many resisted at the idea of Smith replacing Maurice, but the President and CEO of Global Tech had a fair idea that Smith is highly qualified and will help Global Tech in execution of their long term strategic plan of moving forward (Schmidt, 1997).

d) Aggressive pursuit of potential acquisition targets

The Global Tech is pursuing a strategy where it plans to acquire targets through mergers and acquisitions. These strategic implications are to be supported by company’s core competitors, who want to hasten the process of mergers and acquisition but as Global Tech needs to solve the organizational issues first; therefore, this strategic implication is delayed.

e) Efforts to retain strong talent pool for the Initial Public Offering (IPO) in quarter 4, 2014

In order to retain the talent pool in the organization, Global Tech needs to sort out ways in which employee retention can be done. Before the Initial Public Offering, it needs to sustain its talent pool so that their very own employees help the organization in the strategic implementation of their goals. The environment is characterized by poaching issues and there has been non-stop employee contraction in the industry. Global Tech is also facing issues like these; therefore, before they get hands on to another company they need to sustain their employees otherwise they will fall short of talents and competencies possessed by their employees.

f) Stock Options Grants

For executive compensation plans, Global Tech is planning to give stock options to its employees. The board at Global Tech needs to disclose what restraints are set forth for the compensation decisions and what the expected pay for the performance is. In addition to this, transparency with respect to what is the primary measure for performance and sensitivity is required. Global Tech at present is seen to give its board members stock grants for motivating them, which makes options as percentage of company grants. The disclosure requirements may be inclusive of what the executive level pay ratios are and what the scratch back policies and procedures are to recover incentive compensations (Bowen, 1994).

2. Describe what you would do:

As a board member of Global Tech, one will have dual responsibilities of giving advises to the management regarding strategic and operational directions for the company and the other is to have an oversight, which refers to monitoring the company’s performance and costs of operations. They just perform these two functions, and rest of the implementation is in the hands of management. These responsibilities include approval from the board for the corporate strategy, work on successions, identifying risks and devise risk mitigating strategies as well as ensure company’s assets and shareholders welfare (Sarbanes-Oxley Act of 2002).

a) Before the meeting

Before the meeting on 5^th of August 2014 as an independent director at Global Tech, one will be overloaded with a hell lot of questions for example why someone can’t be a replacement for Maurice Gagnon. Nevertheless, one will also want to raise voice on the decision of making Jennifer Smith, the new Chairmen and replacement for Gagnon. There are several issues regarding the organizational restructuring ................

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