Vijay Shankar Sharma
Textbook finance, M&A, governance, strategy, and organisation terms. Not UNITE and not Layer 4. 147 terms. Textbook meanings only.
15 terms. Page 1 of 1.
governance · intermediate
A non-binding shareholder vote on a company's executive compensation practices, giving shareholders a formal, though generally advisory, mechanism to express approval or disapproval of how senior executives are being paid.
strategy · intro
The capacity of a business model to handle significantly increased volume or demand without a proportional increase in cost or operational complexity. Software businesses are frequently cited as highly scalable, since the marginal cost of serving an additional customer is often very low compared to businesses with significant physical production or service delivery costs.
governance · intermediate
Efforts by shareholders, particularly those holding significant stakes, to influence a company's strategy, governance, or management, ranging from private engagement with management to public campaigns, proxy fights, or lawsuits. Activist investors often target companies they believe are undervalued due to poor strategic or operational decisions.
governance · intermediate
The view that a company's central purpose is to maximise value for its shareholders, and that this objective should take priority over the interests of other stakeholders when the two are in tension. It has historically been the dominant framework in American corporate law and finance, though it has faced growing challenge from stakeholder-oriented models.
organizational · intermediate
The number of subordinates or direct reports that a single manager oversees. A wider span of control generally produces a flatter organisational structure with fewer management layers, while a narrower span produces a taller, more hierarchical structure.
governance · intermediate
A view of corporate purpose holding that a company should be managed to serve the interests of all its stakeholders, including employees, customers, suppliers, and the community, rather than shareholders alone. It is generally contrasted with shareholder primacy, which holds that a company's central obligation is to maximise value for its shareholders.
ma · intermediate
A contractual provision, often used in the early stages of deal discussions or in the context of a hostile approach, under which a party agrees not to acquire additional shares, launch a takeover bid, or take other specified actions for a defined period.
ma · intermediate
An acquisition structure in which the buyer purchases the outstanding shares of a target company directly from its shareholders, thereby acquiring the entire company, including all of its assets and liabilities, known and unknown, as distinguished from an asset purchase.
strategy · intermediate
An agreement between two or more companies to collaborate on a specific initiative, such as a joint product development effort or shared distribution arrangement, while each partner remains an independent company, as distinguished from a merger or acquisition in which one or both companies lose their separate identity.
risk · intermediate
An analytical exercise that evaluates how a company, portfolio, or financial system would perform under a severely adverse, but plausible, hypothetical scenario, such as a sharp economic downturn or market crash. Regulators require large banks to undergo formal stress tests to assess whether they hold sufficient capital to withstand a severe shock.
governance · intro
The process by which an organisation identifies and develops potential future leaders to ensure continuity in key roles, particularly the chief executive position, when a current leader departs, retires, or becomes unable to serve. Boards are typically responsible for chief executive succession planning as a core governance function.
strategy · intro
The cost, whether financial, effort-based, or psychological, that a customer incurs when changing from one product or supplier to another. High switching costs can lock in existing customers and reduce a company's vulnerability to competition, forming an important component of many competitive moats.
strategy · intro
A strategic planning framework that structures analysis around four categories: a company's internal Strengths and Weaknesses, and external Opportunities and Threats in its operating environment. Despite being one of the simplest and most widely taught strategy tools, it is frequently criticised for encouraging shallow, unprioritised lists rather than deep strategic insight.
ma · intro
The anticipated increase in combined value expected to result from a merger or acquisition, beyond the sum of the two companies' standalone values, arising from cost savings, revenue growth, or other efficiencies unlocked by combining operations. Synergy estimates are notoriously prone to overoptimism and are frequently used to justify a deal price that later proves difficult to earn back.
risk · intermediate
The risk that the failure of one company, or a disruption within one part of a financial system, could trigger cascading failures across the broader economy or financial system, rather than remaining contained to the initial point of failure. It was a central concept in analysing the causes and spread of the 2008 global financial crisis.