Because Mr. Wallace is the chairman and president of the Wallace group. He continues to make the decisions for the companies of the individual's employed by him. It is like one person is dictating and running all three companies with no input from anyone else.
Mr. Wallace is so concerned with profit that he isn't concerned with hiring the best employees for any open positions. What recommendations would you make to Mr. Wallace and in what order of priorities?
The first order of business for Mr. Wallace is to reorganize and obtain new members of the board of directors. Mr. Wallace needs a board of directors that is made up of outside and inside directors. These boards of directors should have the education and experience to hold these positions.
The typical large US Fortune 1000 corporation has an average of 11 directors, 2 of whom are insiders. Event though outsiders account for slightly over 80% of the board members in these large US corporations, they account for only about 42% of board membership in small US companies. (Wheelen & Hunger, 2006) It has been stated that outside directors are less biased and more likely to evaluate management's performance objectively than are inside directors. Even research reveals that the likelihood of a firm engaging in illegal behavior or being sued declines with the addition of outsiders on the board. (Wheelen & Hunger, 2006)
Then Mr. Wallace needs to make sure that everyone on the board understands their roles and responsibilities as they apply to strategic management. The roles are as follows: 1.Monitor- Through committees the board will stay abreast of developments inside and outside the corporation and...