1.It is denoted in the past studies that there are some elements that need to be considered by the management of the organization in order to be in the market and to compare with the rivals in the most productive (Tricker, 2015). Though, those companies that are not able to run their rules as per the basic standards of the society face a lot of the difficulties to survive in the market. This is the same reason with the Parmalat faced the downfall.
- It has been observed that the major governance failings of Parmalat are empirical evidence that confirms the lack of monitor structure. It eventually damages that factor of accountability of the firm.
- There was no proper role of control structure and the controlling shareholder is present. This became the main reason for the failure.
- Italian corporate governance standards are not entirely fulfilled by Parmalat.
These were the main reasons that become the reason for the Parmalat failure. However, it has also been observed that Parmalat’s corporate governance structure is eventually failed to comply with some of the key existing Italian corporations (Bushee, 2013). Other than this, the role of the external auditor along with the internal auditor as the non-effective monitors seems to this major issue in to the global argument (Grossi, 2015). The concerns that are highlighted in the above discussion became the reason for the downfall of the Parmalat as this organization did not consider the ethical issues of the society which lead them towards the path of destruction.
2.The management of Parmalat must need to incorporate the brief knowledge about the legal affairs of the Italian environment because it eventually affected the performance of the organization. It is denoted in the study of Qian (2015), those companies that are not able to understand the legal issues cannot be able to stand in the competitive environment. This is the same case happened with the Parmalat. It is denoted that those companies that are able to cope up with their concerns can be able to sustain in the competitive environment for the long period of time. In contrast, those organizations that do not try to maintain their standards are not able to be the part of the society.
On the other side, it has been found that there was no proper role of the control structure that was the reason for the failure. However, this factor could be avoided by if the higher authorities of Parmalat can be able to design the control structure (Berger et al., 2016). It can then save the company from the downfall. The legal advisors of the Parmalat Company were the one who did not make any decision which is not in the favor of the organization. The controlling system in the Parmalat failure regarding the stakeholders also played a significant part for the downfall. It is due to the reason that if the stakeholders of the company are not satisfied with the operations of the organization then it would eventually lead towards the failure of the company. Same case happened with the Parmalat Company.
3.It is highly important to make sure that all the main authorities of the organization are taking part in the decision making process (Larcker, 2015). It is due to the reason that it helps the management of the company to take such decisions that can help in the progress of the organization in the most productive manner. On the other side, it can be stated that corporate governance can only be developed when the individuals of the company can be able to express their opinion without any hesitation or without any fear (Coffee, 2016). Considering this in mind, it can be stated that when the individuals of the company are able to share their perspective with each other only then they can formulate such strategy that makes good corporate governance. Hence, it can be stated that all the non-executive directors should have to take decision with the audit committee members and the other board of directors. According to the researcher of the report, it has been found that it is very important for the person to analyze the mechanisms that can help in the formulation of good corporate governance (Elson, 2010).However; it can only be built on the strategies (Coule, 2015). It has been found that there are some main tools that can be used in order to enhance the performance of the company and from those elements one of the most important one is to involve all the authorities of the organization. It is observed that when the management staff and the managerial staff both collaborate with only then the company can be able to attain a bigger perspective (Dias, 2017).
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