Unit 4 - Strategy Implementation

Unit 4 - Strategy Implementation

Question# 1

In general, wages are related to the size of the company. Reasoning and probably relies simply on the fact that a company which generates a large income can afford to pay higher salaries. Obviously, we can not say the same for employees in the bottom. The person doing the cleaning in a large corporation does not necessarily gain much more than a small business.

Since there is only one CEO position for each company many employees will fight to get the position. Therefore, the reward for getting to that position and becoming the final person standing must be extremely attractive. The larger the company the nicer the prize needs to be at the end of the fight. Therefore, it could be in the best interest of the shareholders' interest to overpay the CEO as it will assist them in getting the best CEO.

Question# 2

The shareholder value concept states that the employed executives who run a company (only) in the interest of its shareholders. Our primary goal is to increase shareholder value through investment projects whose return is greater than the average cost of capital. The central function of executive compensation, therefore, is the salaried managers of a company through appropriate incentives to motivate, not to pursue their own goals, but to bring about an increase in value of the company.

Question# 3

The inequality of income and wealth is the crossroads of dilemmas and philosophical and political confrontations. A wide acceptance of the beneficial effects of the market economy and the value of a meritocratic society tends to generate a certain tolerance against disparities in income and wealth but it appears to be a threshold beyond which the company becomes uncomfortable, even hostile, to face the fortune of a minority.

This threshold tends to ...