Question One

CASE $1$: THE ALPHA, BITA AND GAMA CASES

Post$-$COVID business environment has introduced a lot of turbulence in global business. Many

companies have restrategised and reorganised in order to remain going concern businesses. The

restrategisation and reorganisation include a relook at corporate objectives, respective emerging

policies, implementation and monitoring of policies, and board accountability. A renowned CEO

from a prominent entity indicated that $"...$in fact, we have to overhaul our entire corporate strategy

and our corporate governance system, which are key to our economic, social and environmental

sustainability". He continues, $"$we relooked at our legal obligations and figured how we could

ensure that we fulfilled all of them to avoid default. We also re$-$evaluated the way we conduct our

business to ensure that we still do things right. This is due to the financial challenges that covid

posses which could make us cut corners in our operations and processes. We still want to remain

ethical, which is core to our business. In all these, we do not fail to drive home to our community

and society the great value we provide and also show them that we still value their core values and

culture and we fully align." He continues, $"...$ although we have been a profitable company prior

to Covid $19,$ with robust corporate governance structures, the pandemic has tested the robustness

of our structures and we have realised that we needed to do things differently within the covid era

and more importantly post covid. We noticed that our profits have been challenged, but our

enhanced efficiency enabled us keep afloat".

A quick glance through the global business environment shows that many companies struggled

and are still struggling to remain going concern. For example, a CEO from a company that is

perceived to be struggling iterated, $"....$ Our competitors have been badly bruised by the "fiery

darts" of covid $19....$but we are fortunate to be less affected, though we sustained some injuries".

Judging from the CEO's submission, we perceive a struggling firm that is trying to paint a positive

image of itself. He continued $...$our company suffered a damaging scandal that touched our public

image, but from all indications we had fulfilled all our legal obligations and so we could'nt be

blamed for that

$.$the other accident was also due to the negligence of a third party

Another CEO in his annual report reiterated $......$ covid $19$ violently shook our business at it's

core, particularly, our supply chain, but we remain resilient. This has been due to a global

phenomenon which adversely affected many companies but we survived it$.....$we remain

poised.....

From the the foregoing, corporate restructuring and reorganisation could be eminent in many

companies.

You are Required to:

A$.$ From the case above, two $(2)$ theories are apparent: the Institutional Theory and the

Legitimacy Theory. Explain these two theories.

$(4$ marks$)$

B$.$ Identify three $(3)$ issues in the case that could be explained by the Institutional Theory and

comment on the issues.

$(8$ marks$)$

C$.$ Identify three $(3)$ issues in the case that could be explained by the Legitimacy Theory and

comment on the issues.