Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies
Most evidence regarding the determinants and effects of corporate governance practices is based on large firms. Herein, we explore these issues in the context of small publicly traded Canadian companies. We exploit the fact that such firms were not subject to corporate governance guidelines prior to 2005 and thus analyze the determinants of voluntary governance practice choices, as well as the effects of those practices on firm performance. Using a unique data set, we construct a corporate governance index for each firm. We measure performance by two variables: quality of accounting earnings and financial performance. The results indicate that corporate governance does matter for smaller traded Canadian firms. We find that both accounting and financial performance are positively related to corporate governance; however, their underlying mechanisms may differ somewhat. Given this result, it would be natural to expect all firms to choose higher levels of governance. However, our results also suggest small firms face resource constraints that limit their choices. We conclude that good governance is an important driver of small firm performance that cannot be neglected by the owners and managers of these firms.
Authors :: Irene Gordon, Karel Hrazdil, Daniel Shapiro
Swot Analysis of "Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies" written by Irene Gordon, Karel Hrazdil, Daniel Shapiro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Governance Firms facing as an external strategic factors. Some of the topics covered in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies case study are - Strategic Management Strategies, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies casestudy better are - – wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, there is backlash against globalization, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Governance Firms, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Governance Firms operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies can be done for the following purposes –
1. Strategic planning using facts provided in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies case study
2. Improving business portfolio management of Governance Firms
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Governance Firms
Strengths Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Governance Firms in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies Harvard Business Review case study are -
Learning organization
- Governance Firms is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Governance Firms is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Governance Firms has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Governance Firms in the sector have low bargaining power. Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Governance Firms to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Governance Firms is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Irene Gordon, Karel Hrazdil, Daniel Shapiro can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Governance Firms
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Governance Firms does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Governance Firms has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Governance Firms in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Governance Firms is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Governance Firms in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Governance Firms has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Governance Firms is present in almost all the verticals within the industry. This has provided firm in Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Strong track record of project management
– Governance Firms is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies, in the dynamic environment Governance Firms has struggled to respond to the nimble upstart competition. Governance Firms has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Governance Firms needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Governance Firms has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Governance Firms has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Governance Firms has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Irene Gordon, Karel Hrazdil, Daniel Shapiro suggests that, Governance Firms is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Governance Firms has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies can leverage the sales team experience to cultivate customer relationships as Governance Firms is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Governance Firms is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Governance Firms needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Governance Firms to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies HBR case study mentions - Governance Firms takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Governance Firms, firm in the HBR case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Governance Firms can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Governance Firms can use these opportunities to build new business models that can help the communities that Governance Firms operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Governance Firms can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Governance Firms has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Governance Firms to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Governance Firms can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Governance Firms in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Governance Firms to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Governance Firms has opened avenues for new revenue streams for the organization in the industry. This can help Governance Firms to build a more holistic ecosystem as suggested in the Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies case study. Governance Firms can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Governance Firms to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Governance Firms can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Governance Firms can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Governance Firms can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Governance Firms can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Governance Firms can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies are -
Technology acceleration in Forth Industrial Revolution
– Governance Firms has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Governance Firms needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Governance Firms in the Leadership & Managing People sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Governance Firms can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies, Governance Firms may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Consumer confidence and its impact on Governance Firms demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Governance Firms can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Governance Firms needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Governance Firms needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Governance Firms can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Governance Firms.
Regulatory challenges
– Governance Firms needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
High dependence on third party suppliers
– Governance Firms high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Governance Firms
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Governance Firms.
Weighted SWOT Analysis of Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Corporate Governance in Publicly Traded Small Firms: A Study of Canadian Venture Exchange Companies is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Governance Firms needs to make to build a sustainable competitive advantage.
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