FIN unit 5 IP Essay Example | Topics and Well Written Essays - 1000 words

FIN unit 5 IP - Essay Example By establishing production facilities in other countries especially where the cost of production is low, the firm starts to import its products back to home. Vernon’s product life-cycle theory was initially developed in US due to the fact that the most of new products were initiated in the US market. As more regions became developed, the theory was emulated by other countries such as China and Japan among other countries. One of the notable strengths of the Vernon’s product life-cycle theory is that it clearly explains the historical development of foreign domestic investment (Moffett et al, 2009). Nevertheless, based on the complexity in the production process globally, Vernon’s product life-cycle theory cannot neatly hold. For instance, as many countries initiate production systems, new products are being introduced at the same time in addition to establishment of production facilities in many countries simultaneously. Based on stiff competition that is been ex perienced in the current business atmosphere, many countries are focused at supporting their local companies by offering incentives such as tax subsidies and training of their work force. One of the major reasons as to why host countries, resist cross-border acquisitions is that they view them as foreign companies who are aimed at taking over their local firms without creating employment opportunities. On the other hand, host countries, view green field investments as economic drivers that are focused at establishing new production facilities that acts as major sources of employment for the local residents (Wang, 2005). Additionally, some host companies are viewed as competitors whose aim is to create products that are similar to those of the host companies. As a result, the local firms are faced with fewer sales leading to reduced amount of tax paid to the government thus resulting to slow development of the host countries. As local companies adopt foreign domestic investment, they are faced with various risks that range from currency risk to political risks. Based on the need to produce a budget that entails all the assets and liabilities that firms have at a certain date, it is imperative to incorporate the risks so as to provide fair position of the companies’ financial position. Political risks entail the complications that local and foreign businesses may face due to a political change. Beside macroeconomic factors, political risks can be caused by social policies as well as changes in investment, labour and changes in development among others. Political risks can be divided into macro political risks and macro political risks. While micro political risks are specifically related to a project, macro political risks affect all sectors of a country. During capital budgeting, firms should incorporate political risks in various ways. First, an organization can adjust the cost of capital upwards in order to indicate the impact of political risk. This i s followed by discounting the expected cash flows at an increased rate. Secondly, a firm can deduct insurance premiums associated with political risks from the future cash flows. This is followed by using the normal cost of capital which is adopted by the domestic capital budgeting. The need for expansion in foreign countries has forced many firms to emulate various strategies in order to expand their tangible and intangible assets. Two notable

HR Issues in the Organisations Essay Example | Topics and Well Written Essays - 1000 words

HR Issues in the Organisations - Essay Example Such a degree of centralisation is leading to employees’ frustration and disengagement (Vosburgh, 2007). There is a totally flawed reward system (Secord, 2003) working in the organisation, which again is designed by the ministry of defence. This design is not pragmatic (Pilbeam, S. & Corbridge, 2010) when it comes to dealing with civilian workers. Apparently, most of the work in these organisations is done in teams, but the reward system in place is not suited to this form of working. Moreover, this type of a reward system is anti teamwork and leads to a rift created between employees (Ulrich & Smallwood, 2005). With employees not receiving their deserved recognition and line mangers being helpless in this regard, organisational motivation is falling exponentially (Yeung & Brockbank, 1994). This entire problem is being caused by the â€Å"Cluster Panel†, which is totally callous to the working environment and is responsible for making appraisal decisions. The group has a defective method in place to assess an employee. The entire appraisal system (Yeung, Woolcock, & Sullivan, 1996) is dependent upon the line manager’s recommendation of an employee and that too is further conditional on his writing effectiveness. Even if a manager effectively encodes an employee’s accomplishment on the appraisal form, there is still no guarantee that this would secure an appraisal for the employee. This deficiency has two folded repercussions, one has to do with the line manager’s motivation level and the other has to do with an employee’s alienation with the organisational procedures (Newman & Hodgetts, 1998). One aspect that needs special attention over here is that of the military staff. Since they form a part of the total workforce of these organisations, they deserve to be treated like any other employee. On the contrary they are considered as alien to the organisational setting when they receive their compensation from the defence ministry. This sort of handling of the military personals is leading to a confusion arising in their midst with regards to their role, both in the military and in these organisations. Another important draw back in these organisations has to do with the absence of a motivator. Since employees consider performance bonuses as some sort of a lottery rather than a form of recognition, and manager’s acclamations as shallow, there exists a serious deficiency of a driving force (Miner & Crane, 1995). In these organisations mangers are the ones who are occupying the most pitiful position. They have no power what so every to express their viewpoint. They are mere spectators who are just watching the show, having no power what so ever to exert influence on any level of the bureaucracy (Losey, Mesinger, & Ulrich, 2005). Recommendations for Changes: In these circumstances in which the employees are feeling totally dejected with the organisational procedures, and mangers rather than being inspirational are showing a sorry picture it is important to come up with more effective Human Resource policies (Kramar, Mcgrew, & Schuler, 1997). It is inevitable that organisational productivity will fall and the purpose for which these organisations are in place will suffer a deep blow. In order to prevent such damaging consequences, change management needs to be implemented on an emergency basis. In this change management program,