Baosteel Group Governance With Chinese Characteristics

2044 words - 9 pages

1. DO YOU THINK THE BAOSTEEL GROUP SHOULD CONSOLIDATE ALL OF THE GROUP’S ASSETS INTO A SINGLE PUBLICLY-LISTED COMPANY OR REMAIN A TWO-TIERED STRUCTURE?

To be able to argue whether the Baosteel Group should consolidate the entire Group’s assets into a single publicly-listed company or remain a two-tiered structure one first needs to review the underlying situation, Baosteel was faced with.
In order to stay competitive on the increasingly fierce global steel market Baosteel was required to not only advance in technology but also to increase its output. To reach its aggressive targets, Baosteel continued its quest for domestic acquisitions. In 2008 Baosteel set up a new company which was ...view middle of the document...

As the project might not be benefical right from the beginning it would affect the balance sheet of Baoshan and additionally to handle it under the group would be easier than having to respond to the regulations for listed companies.
The second issue which rose upon this project was the growing potential for competition among the Group’s various steel companies. By acquiring these companies Baosteel owns controlling interests in four listed steel companies. As Baosteel is the controlling shareholder in each of these listed companies, Baosteel is required to respect the interests of minority shareholders in each of these entities. Due to the concept of a modern company, listed on a stock exchange, all interests of every single shareholder is important and should be taken into account. But as the different entities are likely to compete with each other it seems to be an impossible task to satisfy the interests of all investors.
A way to solve this dilemma of honoring the opposing interests of the investors of each entity would be to consolidate all of the Group’s steel assets into a single publicly-listed company. The rising question is whether Baosteel should take this consideration into account. Therefore the advantages of both operational forms, the single publicly listed company and the two-tiered structure, shall be analyzed in the following. (see image 1)
By consolidating all the group’s steel assets into a single publicly-listed company Baosteel could remove the problem of competition and realize a potential of synergistic effects. Thereby Baosteel would be able to cater for the needs of all the Shareholders. The different entities wouldn’t compete anymore and thus the performance of the company as a whole would be decisive for the shareholders. Baosteel would no longer be in the dilemma of having to decide in which entity they should invest and thereby meet the needs of these shareholders whereas neglecting the interests of the other subsidiaries’ shareholders. Additionally the Management of the company would be facilitated and Baosteel could adopt international management processes for all the entities. Besides these tremendous advantages Baosteel would be able to allocate the assets more efficiently and reach a better market coverage and an improved utilization of financial and human resources.
Besides the advantages, the consolidation of the group’s assets inherits also a number of problems. As the different subsidiaries due show differences in management, systems and culture it seems to be a tough job to find common grounds to establish a single company. Besides managerial problems the consolidation would also raise issues concerning status and “face”. If the company Bayi for instance would be merged with Baoshan it would have been degraded from being independent to a grandson of the Baosteel Group. As hierarchy is still an important concept deeply enshrined in Chinese culture this might be problematic and have adverse effects on...

Other assignments on Baosteel Group - Governance With Chinese Characteristics

Essential Health Services Essay

992 words - 4 pages mission of the National Association of Local Boards of Health is to strengthen and improve public health governance (NALBOH.org). Their vision is to cultivate boards of heath that are: well connected to other stakeholders in public health and government, compromised of individuals with knowledge, skills and abilities, to effectively represent and serve, effectively and competently serve the public health needs of their community in accordance

Executive Corporate Governance Essay

474 words - 2 pages What is corporate Governance ? Every organisation, business or company has a group of leaders at the top. They are the executive directors. As a group of leaders, the board of directors has the responsibility to make decisions on how a small business or an organisation must be organised and managed. The board uses corporate governance principles, ideas, institutions and actions in their instructions to the executive managers of the business

General Motors

9412 words - 38 pages UK, where Opel's British subsidiary, Vauxhall, still uses its own "Vauxhall" brand name. In 2012, PSA Peugeot Citroen and General Motors formed an alliance, which involved General Motors acquiring seven% of PSA Group. Asia The company manufactures most of its China market vehicles locally through Shanghai GM, a joint venture with the Chinese company SAIC Motor. The SAIC-GM-Wuling Automobile joint-venture is also successfully selling micro vans

Individual Assignment

3813 words - 16 pages corporate governance and where by association, corporate culture and corporate governance are inextricably linked with CSR. Sheppard (1994) explains that those at the pinnacle of corporate governance, the board of directors, who are the natural people within the corporation to give emotional impetus to moral prerogatives the corporation. Grassl (2010) argues that a moral act is undertaken by, an ethical person, a courageous person, or a person with

On Translation Of English Names From Cultural Perspective

5210 words - 21 pages On Translation of English Names from Cultural Perspective Abstract Chinese transliteration of people's English names not only concerns the accuracy of sound between the source and target languages,but also has much to do with the cultural specificity and the characteristics of the respective languages .Name is the most common language Phenomenon which exists in our society. As the communication between the countries all around the

Any If I Need

1160 words - 5 pages "filter" before the water reaches nearby streams or lakes. In the case of soil erosion prevention, a few common practices include the use of silt fences, landscape fabric with grass seed and hydroseeding. The main objective in all cases is to slow water movement to prevent soil transport. Governance The second World Water Forum held in The Hague in March 2000 raised some controversies that exposed the multilateral nature and imbalance the

Trend In Business In China

1043 words - 5 pages influenced a lot and many private enterprises were bankrupt. Chinese government has made some useful adjusting policies to deal with these troubles in national business and in the end of 2008 the economic growth rate of China was also had 9%. We can know that the business in China is going to be more and more global and luxuriant. 3 New Business in China All of counties

Cultural Issues In Joint Ventures With China

2331 words - 10 pages level of relations within a society Individualist cultures, emphasize personal achievement regardless of the expense of group goals, resulting in a strong sense of competition. Collectivist cultures, emphasize family and work group goals above individual needs or desires. Chinese manifestations of “individualism” do not stress an individual’s separation, total independence, and uniqueness from external authorities of power. Rather

Corporate Governance

950 words - 4 pages Person b. De Facto c. De Jure d. None 12. This type of auditors are usually referred to as a CPA (Certified Public Accountants) firms IIBM Institute of Business Management 2 Examination Paper a. b. c. d. Internal auditors Independent auditors Government auditors None 13. To introduce corporate governance practices in the banking sector the recommendations of the working group of directors of financial Institutions known as the a. Ganguly Group

Whatever

1742 words - 7 pages Focuses on the governance of Telkom Group human capital synergy, industrial relation, and HC communication & effectiveness. Telkom Smart Office Subdit Focuses on the development of Smart Office working environment that would maximize the productivity of the employees. Human Capital Business Partner Center Centralized unit that focuses on the operational process of human capital management through human capital solution, human capital delivery

Maersk Powerpoint

5978 words - 24 pages global reach, our financial strength, our talented employees, our time-honoured values, our approach to sustainability and our drive to innovate. Combined, these strengths form a unique platform for our continued success and future growth. A.P. Møller – Mærsk A/S is listed on the Copenhagen Stock Exchange. Shares in the company are divided into A and B shares, with only A shares conferring voting rights. The group currently has some 66,000

Similar Documents

Intelligence Essay

3412 words - 14 pages oriented and responsive as outlined on the below figure. Figure 1: characteristics of good governance[pic] *Adopted from: United Nation Economic and Social Commission for Asia and the Pacific (ENESCAP, 2013). This paper will be based on six common principles with the merging of the two additional principles outlines on ENESCAP (2013). These principles are briefly outlined below as a basis of understanding the advantages of good

A Study Of The Relationship Between Corporate Governance Structures And The Extent Of Voluntary Disclosure

7994 words - 32 pages Journal of International Accounting, Auditing & Taxation 10 (2001) 139 –156 A study of the relationship between corporate governance structures and the extent of voluntary disclosure Simon S.M. Ho*, Kar Shun Wong School of Accountancy, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong Abstract The primary objective of this study is to test a theoretical framework relating four major corporate governance attributes with the

Bjhkh Essay

2668 words - 11 pages % respondents did not identify the barriers to improve the corporate governance, 69% identified the barriers, 42% had non availability of qualified staff to implement and 21% did have the claim that corporate governance produces sensitive information that cannot be shared with the competitors. According to Maria Mahar and Thomas Anderson (2008) there are some weaknesses, strengths and economic implications associated with corporate governance

Borneo Post Essay

1388 words - 6 pages praised Malaysia as being one of the most active countries in creating awareness of good corporate governance to ensure that the code of ethics was being upheld as the guidelines to safeguard the interest of the employees and companies. “With the financial scandals that are occurring around the world, CIMA has been active the last two years in creating awareness on ethical business strategies and we are going around the world getting people’s