...Part 1 (Short Response) 1- How do differing perspective (society, managers and employee) affect the views of compensation? • Societal perspective: compensation is viewed as a measure of justice as well as a cause of increased taxes and price increases. • Managers: view compensation as a major expense and a means to influence employee behaviour. • Employees: view compensation as a return in an exchange with their employer, an entitlement, or a reward. 2- Explain the difference between base pay and performance pay. • Base pay: Base pay-wage or salary is the monetary compensation an employee receives for the work performed. For example, the base wage for machine operators may be $18 an hour but some individual operators might receive more because of their experience. • Incentives (or variable pay): Incentives tie pay increases directly to performance. It differs from merit increases. Incentives do not increase the base wage, and must be earned each pay period. The potential size of the incentive payment generally will be known beforehand. 3- What are the three tests used to determine whether a pay strategy is a source of competitive advantage? Are these tests difficult to pass? Can compensation be a source of competitive advantage? • Equity Theory: Fairness Equity theory focuses on how employees compare their work, qualifications, and pay to those of others. • Tournament Theory: Motivation and Performance Tournament theory suggests that the greater...
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...Chapter 2: Strategy: The Totality of Decisions Multiple Choice Questions 1. (p. 39) “Everyone wears several hats” and “succeed by working together” are examples of which of the following? A. Objectives B. Internal alignment C. Externally competitive D. Employee contributions Difficulty: Medium 2. (p. 41) “Putting some skin in the game” refers to: A. employees paid entirely on commission B. being paid as a contract vs. a regular employee C. below market base pay with stock ownership D. above market base pay with low benefits Difficulty: Medium 3. (p. 41) A compensation system that pays employees such that “some skin is in the game” means that A. a portion of employee pay is at risk B. employers risk high labor costs C. level of base pay is below competitors D. base pay is low while benefits are generous Difficulty: Medium 4. (p. 41)______________ changed its compensation strategy as the company grew and matured? A. SAS B. Google C. Microsoft D. CNET Difficulty: Medium 5. (p. 42) At the corporate level, a strategic compensation perspective addresses the question: A. What business should we be in? B. What is our desired return on assets? C. How can our total compensation help gain competitive advantage to achieve organization success? D. How can job analysis help us select the most appropriate certain compensation technique(s) for our organization? Difficulty: Medium 6. (p. 42) What level of strategy...
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...National Competitiveness of Japan ABSTRACT: Japan is the third largest economy. It had been so successful and competitive before 1990. It has been in stagnation for two decades. This paper is going to examine if Japan still retains her national competitive advantage and as an attractive place for MNE from different internal analysis. There will be suggestions of how Japan can improve her international competitiveness. INTRODUCTION Japan had experienced tremendously economic growth after World War II until 1980s. Nikkei stock market index has experienced a high hit of 40,000 in Year 1989. After the appreciation of yen, mistakes in fiscal policy and a serious bubble economy in 1990s, Japan fell into recession for more than two decades. To make it worse, the economic crisis in 2008 and March 11, 2011 earthquake and tsunami in Japan were a great hit to the economy. A decline in exports and increase in imports, especially fuels and energy, made Japan has to face trade deficit and how to increase its international competitiveness. There were some signs of recovery from 2012, especially with Shinzo Abe became the Prime Minister and implemented “The Three arrow”, which is a series of fiscal, monetary policy and structural reforms, so called “Abeconomics”. The PEST model which macroeconomic environment will be analyzed and see whether it is attractive for MNE come to Japan. From Porter’s Diamond model, how Japan can increase its national competitiveness will be further discussed...
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...ASSIGNMENT 1 - 1. How do differing perspectives (society, managers and employees) affect the views of compensation? (11 marks) Differing perspectives certainly do affect the view of compensation. Our textbook discusses in pages 2-5 (Milkovich et al) that society in general may "view pay as measure of justice" (pg. 2). The example used in our textbook refers to the pay gap between men and women in society. It is stated that the pay gap is narrowing but it still persists compared to various other OECD countries. Economists have concluded that various factors may have contributed to this gap. For example: human capital, demographic characteristics, and job characteristics. What this may mean is that "women are more likely to study health and education, whereas men are more likely to study engineering and other technology fields" (Mikovich et al, pg. 3) Women are also more willing than men to adjust their work location and hours in order to take care of young children and elderly parents, and to do most, if not all, of the "unpaid" housework. From the manager's point of view, compensation directly influences their success in two ways. According to Milkovich et al on page 4, it is a "major expense." Managers need to think of and be aware of both global and local competitive pressures when making compensation decisions. Moreover, managers need to either minimize or optimize pay in a way to influence employee behaviour and to improve organization performance. This...
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...What Business should do to Restore Competitiveness America’s global competitiveness is dropping and it would appear that the main reason for this is its weak economy. The political environment has three main perspectives as to who should be blamed for this or whose fault it is. The first would be that the national competitiveness is the responsibility of the policymakers of the business, rather than the business leaders themselves, who needs to concentrate on running their companies, the second would be that the companies should show loyalty to the country in which they run their business, the country which supports them. If the American jobs were to be moved overseas then the executives responsible for this would be considered traitors to the American economy. The third perspective is that the managers should be able to run their companies well. But firms would draw from the commons, which means that these firms should draw from the business environment in which they conduct operations. Business leaders have the capacity to affect the commons in which they draw. Also, if a firm were to improve on its commons this would lead to an increase in the profitability of the business. Therefore, these firms should opt to improve and develop these commons in order to gain more profitability in the long run. Competitiveness is of great importance in America; one of the reasons why this is so is because when a firm is considered to be competitive in America, it is already considered...
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...Requirements for the Degree MASTER OF SCIENCE IN MANAGEMENT Faculty of Management University of Lethbridge LETHBRIDGE, ALBERTA, CANADA © Salvador Barragán, 2005 ii Abstract It has been ten years since the signature of the NAFTA agreement among Canada, U.S., and Mexico. For Mexico, this was a decisive step away from a protectionism model toward a free trade market. One of the main purposes for Mexico in joining NAFTA was to increase the competitiveness of its manufacturing sector, especially the automotive industry. In this paper, Porter’s Diamond Model of national competitiveness and some critiques that attempt to extend the usefulness of the model are analyzed. The Doubled Diamond and the role of MNEs in a host country are both examined through a case study research of the foreign-owned automobile industry in Mexico. The findings of this study show evidence of a broader role of MNEs than in the original framework, as well as the usefulness of the doubled diamond extension to explain alternative sources of competitiveness in early stages of development. iii Acknowledgments The culmination of this thesis can be seen as a successful project. An analogy with Porter’s Model, one of the premises to have a successful industry is to have supporting and related industries. In the case of this thesis is not the exception. There has been supporting and related people that offered me extraordinary support. My wife Adriana has provided me a great amount of support in...
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...Insight Report The Global Competitiveness Report 2014–2015 Klaus Schwab, World Economic Forum Insight Report The Global Competitiveness Report 2014–2015 Full Data Edition Professor Klaus Schwab World Economic Forum Editor Professor Xavier Sala-i-Martín Columbia University Chief Advisor of The Global Competitiveness and Benchmarking Network © 2014 World Economic Forum World Economic Forum Geneva The Global Competitiveness Report 2014–2015: Full Data Edition is published by the World Economic Forum within the framework of The Global Competitiveness and Benchmarking Network. Copyright © 2014 by the World Economic Forum Professor Klaus Schwab Executive Chairman All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum. Professor Xavier Sala-i-Martín Chief Advisor of The Global Competitiveness and Benchmarking Network Espen Barth Eide Managing Director and Member of the Managing Board ISBN-13: 978-92-95044-98-2 ISBN-10: 92-95044-98-3 Jennifer Blanke Chief Economist This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. THE GLOBAL COMPETITIVENESS AND BENCHMARKING NETWORK Margareta Drzeniek Hanouz, Head of the Global Competitiveness and Benchmarking Network and...
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...Answer 3 Geneva could obtain a salary increase through broad banding. Broad banding refers to the collapsing of job clusters or tiers of positions into a few wide bands to manage career growth and deliver pay (World at Work. This important tool allows an organization to establish a job worth ranking system and provide maximum rate of pay limitations for each job through pay structures. Geneva’s position could be compressed into another pay band with a higher maximum rate of compensation. Such a task should prove less difficult for a secretary’s role. Geneva could be cross trained for another position and develop a more comprehensive base of workforce skills. This analysis will also show how internal equity and external competitiveness are achieved. Keith was correct in his assertion that personalities could not be considered. Bob and Rita were about to overstep their authority and perform a job analysis that was better left to Geneva’s immediate supervisor. Keith’s insistence that the secretary job be evaluated rather than Geneva Hayes was in alignment with the true purpose of a job evaluation. Answer 4 The job evaluation process emphasizes focus on the specifics of a position. p. Assume Geneva is earning the maximum of the range for her pay grade and Leeper’s policy is that a salary increase cannot be given if it will cause an employee’s salary to be above the maximum of the range. Within range promotions allow for Geneva to have a higher level of responsibility and authority...
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...History and Development The Brown-Forman Corporation (BFC) entered the market producing bourbon in 1870 under the Old Forester brand name. They survived the Prohibition through approval to produce alcohol for medicinal purposes. BFC continued to survive even through the period of World War II through provision of alcohol for wartime supplies; rubber and gunpowder production. Throughout the years BFC made several acquisitions which proved to be profitable; Early Times, Jack Daniels and Southern Comfort to name a few. Through successful marketing relationships and investing in international alcohol distributing companies, the timely acquisitions, and BFC’s innovative efforts - developing a new whiskey in 1988 - as well as their ability to diversify via purchasing well-known global luxury consumer durables BFC has continued to prosper. From 1998 - 2002 BFC’s stockholders’ equity and company assets had continuously increased with a relatively small increase to the companies operating income in contrast to their significant gains in gross profits. By 1965 the company entered the wine business. A few of their marketing and distribution arrangements led to eventual ownership of several international vineyards, hence the creation of the Wine Division (WD). The wine division like its parent-company thrived and did well, particularly through their acquisitions. By mid-year 2001 a new venture was created to house a portfolio of small, upscale brand wines. This separate division became...
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...factors can decide a country’s competitiveness:- * Factor conditions are human resources, physical resources, knowledge resources, capital resources and infrastructure. Specialized resources are often specific for an industry and important for its competitiveness. Specific resources can be created to compensate for factor disadvantages. * Demand conditions in the home market can help companies create a competitive advantage, when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of competitors. * Related and supporting industries can produce inputs that are important for innovation and internationalization. These industries provide cost-effective inputs, but they also participate in the upgrading process, thus stimulating other companies in the chain to innovate. * Firm strategy, structure and rivalry constitute the fourth determinant of competitiveness. The way in which companies are created, set goals and are managed is important for success. But the presence of intense rivalry in the home base is also important; it creates pressure to innovate in order to upgrade competitiveness. Apart from the above mentioned four factors, there are another two valuables, i.e. Government and Chance. Chance is uncontrollable and unpredictable; the influence of Governmental policy is also very important. * Government can influence each of the above four factors of competitiveness. Clearly government can influence...
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...Introduction----- The diamond model is an economics model developed by Michael Porter in his book The Competitive Advantage of Nations. In the mid-1980s, Professor Michael Porter of Harvard Business School developed the model to assess the competitiveness of regions, states and nations. It’s a model that attempts to explain the competitive advantage some nations or groups have due to certain factors available to them. Porter used a diamond shaped diagram to illustrate the determinants of national advantage. That’s why it is called the Porter’s diamond model. The body -------- Now we will use some examples to illustrate the determinants of national advantages. For example:- • Germany is associated with good car making • Japan is strong with respect to micro-electronics and cameras. • France is strong with respect to wine. • The UK (at least until recently!) was associated with a strong financial services industry The chart --- Factor conditions: Some countries enjoy natural advantages. For example, France starts with an advantage in the wine industry because of its climate and soil. Finland, however, is never likely to be good at producing wine. Germany has an abundance of iron ore, ready to be used in the car and other industries. Climate and natural resources are known as basic factors. In addition, countries can develop advanced factors such as their transport infrastructure, telecommunications, and educational system. Demand conditions: The first step...
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...Factor conditions are human resources, physical resources, knowledge resources, capital resources and infrastructure. Specialized resources are often specific for an industry and important for its competitiveness. Specific resources can be created to compensate for factor disadvantages. Demand conditions in the home market can help companies create a competitive advantage, when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of competitors. Related and supporting industries can produce inputs which are important for innovation and internationalization. These industries provide cost-effective inputs, but they also participate in the upgrading process, thus stimulating other companies in the chain to innovate.[2] Firm strategy, structure and rivalry constitute the fourth determinant of competitiveness. The way in which companies are created, set goals and are managed is important for success. But the presence of intense rivalry in the home base is also important; it creates pressure to innovate in order to upgrade competitiveness. Government can influence each of the above four determinants of competitiveness. Clearly government can influence the supply conditions of key production factors, demand conditions in the home market, and competition between firms. Government interventions can occur at local, regional, national or supranational level. Chance events are occurrences that are outside of control of a firm....
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...How do firms in the supermarket industry make money? Operating on very thin profit margins, players in the supermarket industry traditionally either focus on a premium segment or follow a discounter strategy at the low end. Premium players address educated and more price elastic consumers who value healthy, natural and organic food; the share of perishable items for these players is normally distinctly higher. Players that focus on a discounter strategy offer a higher share of simple necessity items and value price competitiveness over premium features like healthiness or organic origin. Independently of the focused customer group it is imperative for players in the supermarket industry to be cost efficient and optimize operations rigorously. Driving down costs is one of the few levers which allows the control of the, already low, profit margins. What are the key sources of Trader Joe’s competitive advantage? Trader Joe’s competitive advantage consists of two main drivers: The company’s unique approach to cut down costs and the unconventional marketing and customer communication strategy. Trader Joe’s is able to cut down its cost in a number of ways. Firstly, the company regularly adjusts and alters its product mix, not only to attract and entertain customers, but to get rid of poor selling items. The frequent introduction of new innovative products helps to keep customer interest high and at the same time enables the company to switch its lowest performing products. The downside...
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...to examples from at least two different industrial sectors. Answer. Porter’s diamond model is a model that can help understand competitive position of location in global competition that suggest a inherent reason why some firm within location are more competitive that other on a global scale. The argument is that the local are provided organization by specific factor, which created more potential competitive advantage for country or region. The Porter's model includes 4 drivers of local advantage, which are shortly described below: 1. Local factor conditions A company in local is exploited by factor conditions. Factor conditions can be seen as advantage factors such as workforce shortage, as a factor potentially strengthening competitiveness, this factor may heighten companies' focus on automation and zero defects. For example, in analyzing of film production industry in the Hollywood, has pointed out the local skilled labor, in the area. Also, resource constraints may encourage development of substitute capabilities; Japan's relative lack of raw materials has reduced and zero defect manufacturing. 2. Local demand conditions Focusing on the domestic market provide the primary driver of growth, innovation and quality improvement. The strong domestic market is stimulates by stat up the to a slightly expanded then became bigger organization. The firm potential is depends on the size of market, put more emphasis on improvement to local market may larger than foreign market...
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...greater insecurity in employees. Intro People Resourcing and Talent Planning – Pilbream and Corbridge People make the difference to organizational performance and are a source of competitive advantage, but a redundancy situation can unbalance and the organization and destroy the motivation, trust and commitment of the people upon whom the organization will rely on for future success. Redundancy often endangers fear and insecurity which damages the psychological contract between employers and employees, which is detrimental to the organization. What is redundancy and downsizing ACAS: ‘British industry requires constant review of products , methods of work and the application of new technology. The ability to remain competitiveness in the worlds markets depends on this. It is inevitable, however, that the redeployment of labour and redundancies will sometimes be necessary. A poorly thought out approach to change can result in a level of uncertainty which damages company performance and, should redundancies be unavoidable, may lead to financial and emotional costs to the individuals affected’ (Advisory, Conciliation and Arbitration Service, 2009, Redundancy Handling: Advisory Booklet 12. London) People Resourcing – Steven Taylor ‘In the uk the term redundancy is defined by law as a situation, in which, for economic reasons, there is no longer a need for the job in question to be carried out in the place where it is currently carried out’ (Page 456) employment...
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