Popular Business Models in Decision-Making
Assessment Description
This topic puts students in the mindset of an executive-level manager, and allows them to gain an understanding of laws and how they affect decision-making.
In 550 words or more, describe what types of businesses benefit most from the implementation of each of the four models of governance. How does the implementation of these models define how decisions are made?
This assignment requires the use of at least two additional scholarly research sources published within the last 5 years. Include at least one in-text citation from each cited source.
Prepare this assignment according to the guidelines found in the APA Style Guide.
Businesses of all types can benefit from the implementation of each of the four models of governance. The most effective model to use depends on the size, nature, and objectives of the business.
1. Hierarchical Governance Model: This model is best suited for businesses that have a clear chain of command, such as a large multi-national corporation. It is based on a top-down approach to decision making, where decisions are made by a central authority and then cascaded down the hierarchy. This model is best for businesses that need to be able to respond quickly to changing market conditions and have a clear direction.
2. Market Governance Model: This model is best for businesses that operate within highly competitive markets. It is based on the assumption that the market is the best judge of value, and that businesses should be constantly striving to create value for customers. This model is most effective for businesses that are able to rapidly respond to customer demands, such as technology companies.
3. Network Governance Model: This model is best for businesses that rely on a network of partners to operate. It is based on cooperation and collaboration between different stakeholders in order to achieve the best results. This model is ideal for businesses that need to be agile, such as software companies.
4. Stakeholder Governance Model: This model is best for businesses that need to balance the interests of multiple stakeholders. It is based on the principle of shared decision-making and is ideal for businesses that need to ensure that all stakeholders are represented in the decision-making process. This model is most effective for businesses that operate within highly regulated industries, such as financial services.
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The concept of business models has become an essential part of the modern business landscape (Barabba, 2022). The introduction of technology into businesses has created a need to rethink traditional management and governance models (Andrée Marie López-Fernández & Springerlink (Online Service, 2019). This essay will outline four of the most popular business models today in decision-making: The Hierarchical Governance Model, the Market Governance Model, the Network Governance Model and the Stakeholder Governance Model. It will explain the differences between these models and their advantages and disadvantages.
The Hierarchical Governance Model is the most commonly used in decision-making today (Andrée Marie López-Fernández & Springerlink (Online Service, 2019). In this model, decisions are made by a central authority, such as a board of directors or management team (Marnet, 2022). This model is often used by larger organizations such as multinational organizations. This model is often seen as advantageous because it is efficient and predictable (Marnet, 2022). However, it can also lead to a lack of innovation and creativity as decisions are made without input from other stakeholders (Ferrell, 2019). This model is best suited for businesses with clear objectives and a well-defined system of authority and power (Andrée Marie López-Fernández & Springerlink (Online Service, 2019).
The Market Governance Model is based on the notion that decisions are made based on market forces (Marnet, 2022). This model is often used in industries such as finance, where decisions are made based on supply and demand (Barabba, 2022). This model is advantageous because it can ensure that decisions are based on current market conditions (Schlippe et al., 2021). However, it can also lead to conclusions that are not in the best interests of stakeholders, as the market can be unpredictable and external factors can influence decisions (Kimmel, 2019). This model is best suited for businesses that need to remain competitive and maximize their profits in a highly competitive market (Baker, 2018).
The Network Governance Model is based on the notion that decisions are made based on a ...