Although Valdemar successfully implemented several changes, gross and net profit margins were lower. Reasons can range from unfavorable exchange rates to rising interest rates. In the case of RDB, low profit margins could have been due to delay in technological upgrade - other firms in the market would have already done the tech-upgrade, which would allow them of charge lower price resulting from lower average costs. However, for RDB, despite the high cost, they would still have to charge a low price in order to survive competition - this explains why profit margins were low. As explained above, Valdemar refused to cope with internal change which should have met in order to survive the competition in the long-run. It not just prevented from gaining cost reductions (this otherwise could have translated to higher profits for shareholders and misc. benefits to other stakeholders), the company also suffered with damaged reputation of brand image and business image; this was action carried out by a pressure group (groups of people without direct political power who seek to influence decision makers in politics, business and society). In order to improve on this damaged image, they could have involved themselves in CSR activities and carried out a social audit. RDB is a Pvt. Ltd. company - Valdemar carried on a paternalistic leadership style (a leadership style where the leaders makes the decisions, but takes into the account the welfare of employees. Sometimes he's also autocratic (where leader makes all the decisions independently - necessary when labor is unskilled) Although, the workers didn't mind such a corporate culture, however, a more democratic leadership style could improve worker motivation. Hence, in RDB, the corporate culture represents a power culture.