1q 1: Most important stakeholders and their influence in financialdecision making
Thepost answers the question in a very broad way by explaining the rolesof different stakeholders in an organization. The post only statesthat customers and stockholders are the important towards the end andfails to explain how the two types of stakeholders influencefinancial decisions of a company. It is true that customers are amongthe most important stakeholders, but managers are more influential infinancial decision making than the stockholders. Currently, customersare very sensitive quality, which has forced modern companies toinvest more finances in research and development (Jahanshahi,2011). Thisway, customers have an indirect and a significant influence incompany’s financial decisions. In addition, the rapid change in theexpectations of customers has forced modern organizations to spendmore money in innovative services and products (Verhief,Lemon & Parasuraman, 2009). Althoughthe stockholders contribute finances that run the organizations, theyhave a limited role in the process of decision making. This isbecause strategic plans on how finances will be spent are made bymanagers (Cheffi& Beldi, 2012),which means that the managers are more significant than stockholdersin term of financial decision making.
1q 2: Influence of investors in governing a start-up company
Thepost supports the idea that investors have a more significantinfluence on startup companies during the initial stages, but thisinfluence reduces with time. This is a correct observation given thatinvestors are more cautious when investing in start-up firms ascompared to established companies. This is because start-ups are morerisky and chances of closing down are quite high (Nanda &Rhodes-Kropf, 2012 and Hoffman & Kelley 2012). Although theauthor emphasizes on the fact that investor get more involved duringthe pre-investment period when agreements and policies areformulated, uncertainties associated with a new business forinvestors to get more involved in the governance issues in order toprotect their money. For example, a start-up company may urgentlyrequire additional funding from investors to finance unforeseenexpenses, which means that investors’ engagement in thepost-investment is still necessary (Festel, Wurmseher & Cattaneo,2013). However, it a conclusion that investors’ involvement ingovernance reduces with time is correct because they tend to gainconfidence in the management and the project as time goes by.
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Jahanshahi,A. (2011). Study the effects of customer service and product qualityon customer satisfaction and loyalty. InternationalJournal of Humanities and Social Science,1 (7), 253-260.
Verhief,C., Lemon, N. & Parasuraman, A. (2009). Customer experiencecreation: Determinants, dynamics, and management strategies. Journalof Retailing,85 (1), 31-41.
Festel,G., Wurmseher, M. & Cattaneo, G. (2013). Valuation of early stagehigh-tech start-up companies. InternationalJournal of Business,18 (3), 217-231.
Hoffman,D. & Kelley, N. (2012). Analysis of accelerator companies: Anexploratory case study of their programs, processes, and earlyresults. SmallBusiness Institute Journal,8 (2), 54-70.
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