The management and board of Directors of Smith corporation are faced with difficult, but potential profitable condition. Jones industries, a larger competitor, has made unsolicited offer to purchase smith at a significantly higher price than the stock is currently trading.
Smith is a regional firm with long history in area and is a major employer in community. It is in a solid financial position, with ownership held by the diverse group of shareholders. Management also holds the stake, as well as stock options. The board members have diverse backgrounds that roughly represent stockholders, members from top management, and the community.
Jones management has given Smith management 30 days to decide if they will agree to the friendly acquisition, but haven't indicated their position if turned down. Jones has made acquisitions before; most of them friendly. Smith management and its board want to reach the decision that satisfies all relevant stakeholders, but realize this will be quite difficult.
A) Determine and categorize the relevant stakeholders
B) Given stakeholder theory and current practice, what decision should Board make in responding to the proposed takeover
C) Measure stakeholder reaction to your strategy