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Case Study The Chicago Food And Beverage Company

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Columbia Southern University
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Case Study: The Chicago Food and Beverage Company
CFB Co.’s restructuring in the year 2000 led to various changes in the company’s overall
strategy. The firm implemented the integrated three regional networks, including the United
States, Europe, and the Asian networks (Bodolica, 2007). The integration significantly affected
the individual rights enjoyed by each subsidiary in respect to their specific local market. The
staffing framework adopted by the food and beverage producer was the mixed compensation
approach where the components included in the compensation strategy represent the concluding
outcomes of negotiations between the firm and the individual expatriate.
The main feature for the integrated staffing framework approach is that the firm would
apply varying compensation systems for the junior and senior expatriates. In light of this method,
senior expatriates are individuals with more than six years of international experience and
compensated in correspondence to the international structure. However, on return to their home
country, the expatriates reincorporate the regular national payment measure. For junior
expatriates, the payment approach conforms to the home nation method referred to as the balance
sheep approach. The parent corporation permits the employees to perform similar expenditures
relating to accommodation, transport, and insurance in the host nation as they would have spent
if they were working from their home country. Secondly, the employer commits to uphold the
purchasing supremacy of their expatriates in the country they work. As such, the employer
performs various modifications to the home payment structure aimed at balancing the additional
expenditure from the host nation. Thirdly, the mixed compensation strategy is aimed at having
the expatriates receive similar incentives, even when undertaking international assignments for
the parent company.

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The mixed expatriate compensation strategy is highly beneficial to the firm. First, the
strategy provides similar work-related benefits for workers in a similar level in the managerial
hierarchy (Collings, Wood & Caligiuri, 2014). Secondly, the firm avoids the instances for extra-
budgetary allocations for employees having international assignments. Thirdly, the host-based
method means the employee receives compensation for the host nation’s payroll and obtains base
and inducement wage founded on host nation reimbursement practices and guidelines.
Additionally, there are limited task-related payments. The host payroll characteristically provides
base salary and inducement reimbursement and above-base stipends. With the firm eyeing cost-
cutting strategies, they have focused on localizing the assignees. The host-based method is a
cost-effective alternative to the old-fashioned home-based method, comprising of local positive
strategy mechanisms.
The staffing framework will significantly affect Paul’s ability to function and improve the
organization's performance. In particular, Paul’s limited experience in international marketing
dynamics limits his ability to implement the new strategy. Secondly, the low net pay which Paul
receives serves as a demotivation factor which in turn affects his work performance as evident
from the poor organizational performance after six months (Bodolica, 2007). The most
appropriate staffing framework is the global market method to expatriate reward, which
necessitates the international assignment be regarded as continuous task process. I would
recommend to the top management that all expatriates to be on the equal payment scale,
irrespective of their home nation. This method is much more comprehensive. Irrespective of
which nation the expatriate is allocated, the key welfares are delivered.
Paul wanted the Vietnam expatriate job to reorient his career in the direction of overall
management post for the same company. Even without international operational experience, Paul

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1 Case Study: The Chicago Food and Beverage Company CFB Co.’s restructuring in the year 2000 led to various changes in the company’s overall strategy. The firm implemented the integrated three regional networks, including the United States, Europe, and the Asian networks (Bodolica, 2007). The integration significantly affected the individual rights enjoyed by each subsidiary in respect to their specific local market. The staffing framework adopted by the food and beverage producer was the mixed compensation approach where the components included in the compensation strategy represent the concluding outcomes of negotiations between the firm and the individual expatriate. The main feature for the integrated staffing framework approach is that the firm would apply varying compensation systems for the junior and senior expatriates. In light of this method, senior expatriates are individuals with more than six years of international experience and compensated in correspondence to the international structure. However, on return to their home country, the expatriates reincorporate the regular national payment measure. For junior expatriates, the payment approach conforms to the home nation method referred to as the balance sheep approach. The parent corporation permits the employees to perform similar expenditures relating to accommodation, transport, and insurance in the host nation as they would have spent if they were working from their home country. Secondly, the employer co ...
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