VECTOR AEROMOTIVE CORPORATION CASE STUDY SOLUTION

They never confronted him formally about his poor management or ill-fated decisions and the board will now have a hard time firing him and not receive some form of legal action taken against them. President Wiegart had a great business concept and might have done very well had there been laws in place to dictate the proper duty of care, loyalty, good faith and avoiding deliberate destruction of shareholder value. Possibly in hopes of shifting the power back in his favor. The board members rarely received information prior to their meetings and what information they did receive, just enough was given in order for Wiegart to achieve the conclusion that he wanted. None of the decisions the board made were in the interests of the investors rather they were made in the interest of keeping a feeling of cohesiveness within the company. The board members should only be selected by the investors and should have knowledge and management experience in relation to the business it is a board of.

Wiegart was not only losing the trust of his board members and employees but also his potential investors. Another problem, not mentioned in the case, was the board members themselves. They were all selected by the founder and president of the corporation, with the exception of Baduraman Dorpi he was appointed by the Indonesian investor per the purchase agreement. The most obvious one is a law set in place that does not allow the president and the board member to be one in the same. There should have also been an uneven number of board members, to avoid ties when making decisions. Army Risk VS hazard.

President Wiegart had a great business concept and might have done very well had there been laws in place to dictate the proper duty of care, loyalty, good faith and avoiding deliberate destruction of shareholder value.

A background in real estate would not benefit someone needing knowledge of the exotic sports car industry as in the case of Wiegart selecting Barry Rosengrant as a board member.

The board members should also have been required to sign a conflict of interest statement, saying that they would only act in the best interest of the business and not profit from his or her service on a board of directors, placing the company in jeopardy as Wiegart placed Vector in jeopardy. There should have also been an uneven number of board members, to avoid ties when making decisions. The board members should only be selected by the investors and should have knowledge and management experience in relation to the business it is a board of.

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There were many possible ways in which this could have had a much more favorable outcome. Another problem, not mentioned in the case, was the board members themselves. The board members rarely received information prior to their meetings and what information they did receive, just enough was given in order for Wiegart to achieve the conclusion that he wanted.

vector aeromotive corporation case study solution

He was even so inclined to add another board member, also another one of his long-time business associates, when he did experience a little resistance with the other board members. Possibly in hopes of shifting the power back in his favor.

The most obvious one is a law set in place that does not allow the president and the board member to be one in the same. However, the first initial mistake was the president and founder of stufy company appointing himself as the chair of the board.

Press enter to begin your search. Wiegart was not only losing the trust of his board members and employees but also his potential investors.

vector aeromotive corporation case study solution

The board would finally acknowledge this was a rather solition issue two years later. In conclusion, Vector Aeromotive Corporation has doomed for failure with the initial set up of the board of directors.

Army Risk VS hazard. The only board member that was not personally selected by Wiegart was Dorpi as I mentioned earlierwho was appointed by the Indonesian investor as indicated in the purchase agreement he had with Vector.

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He will have a difficult time achieving success with a bad reputation of trying to deceive potential investors and withholding valuable decision making information from board of directors. Generally, the board of directors are responsible for the following duties: However, if Wiegart was to make a comeback with Vector he might want to think about acquiring some management skills as well as business ethics. In the meantime, Wiegart continues trying to sell his fabricated business plan with potential investors, losing their trust, and burying the company in a huge financial deficit.

The board members also failed to notice As mentioned in the class textbook, board members have two main control responsibilities. Would you like to get a custom essay? There was a clear conflict of interest having the president of Vector not only residing as the board chairman but also the individual responsible for selecting the board members.

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This is a clear example of how the board members chose to ignore other poor actions made by Wiegart in the years that followed.

Vector Aeromotive Corporation Case Study Free Essay

They never confronted him formally about his poor management or ill-fated decisions and the board will now have a hard time firing him and not receive some form of legal action taken against them. The board members should have made sure that they were receiving all the information needed prior to the meeting with the Vector executives so that they were able to make solid informed decisions on behalf of the stakeholders and potential investors.

The amount of excessive spending that the president was responsible for was noticed as a problem but no action was taken.

vector aeromotive corporation case study solution

How about receiving a customized one? The board members did not challenge Wiegart and try to take control of the situation until the financial position of the solutlon was in dire straits and it was, in a sense, too late.

Previous Post George W. Another solution would have been for the board members to evaluate each other and the group as a whole to ensure their performance level was up to par and assess improvements that could have been made.

Vector Aeromotive Corporation Case Study

They were all selected by the founder and cotporation of the corporation, with the exception of Baduraman Dorpi he was appointed by the Indonesian investor per the purchase agreement.

Following this addition, one of the members resigned because Wiegart deliberately lied to the members stating that the investor insisted on there only being four board members. None of srudy decisions the board made were in the interests of the investors rather they were made in the interest of keeping a feeling of cohesiveness within the company.