The Debate on Executive Compensation Essay Example | Topics and Well Written Essays - 2250 words

The Debate on Executive Compensation - Essay Example Instead of the inverse proportionality of their pay to the performance of the firm, it should be such that the relationship is directly proportional to each other. Usually, the executive pay is a combination of the salary, extra bonuses, reimbursements, and shares on the company stocks. The compensation is given a stringent configuration to comply with the necessary legal requirement, which includes tax law, regulations of the government, the desires of the company as stipulated by the executives and the organization itself, and of course the reward and performance. Most important is the fact that the executive pay is always a subject of approval from the board of directors and meanings that the salary is predetermined before the actual performance of the executives is noticed (Bertrand and Mullainathan 2001, p.62). Different schools of thoughts have thus arisen over the executive pay by hypothesising on the motivating factor for the increasingly rising pay for the CEOs and two schoo ls of thoughts have been brought forth. ... The other thought process perception is rather opposed to the compensation level and asserts that it is a socially unaccepted phenomenon that is largely fuelled by the social and political order that allows the executives to self-determine their own pay and have absolute control over it (Chen, Liu and Li 2010, p.54). Thus, the payment of the executives is not a covert that is whimsically decided by the CEOs themselves but is also approved by the board of directors who also determine and give consent to the figures. Despite this, the economists are not persuaded by this and therefore maintain that the executives’ pay must be aligned to the performance of the company, without which it is irrational and unjustified (Bruce, Buck and Main 2005, p.41). In reference to the objective brought by the economist over the hefty pays that go to the executives even during the period of economic crunch, this paper critically examines the agency theory and explains why it is impossible to expl ain the compensation of the executives with the provision of the theory. Besides that, the paper also gives comparative approach of evaluation from other theoretical sources that consider the relationship between the principal and the agents apart from the agency theory. The Agency Theory This theory shows the connection that exists between the principals and the negotiators in a business scenario through managing the business affairs to the best interest of each. The principals in the case companies are the shareholders while agents are the executives; in this relation, the agency theory tackles any problem that may arise between the principal and the agent in the course of running the business. Thus, the agency theory is known to be instrumental

IB Assignment Example | Topics and Well Written Essays - 2500 words

IB - Assignment Example The other marketing strategy are franchising, licensing and other mode of entries. It is important for the retail business, opening stores abroad retail business cannot succeed. The price of the product, the promotion strategy, store design and customer service of an international retail business should be appropriate for business to prosper. A company needs to look into many factors like political, environmental, social and technological when entering a international market. In an international business the governmental policies, weather condition, the needs and demands of people from various culture and technological influence affect the success of the business. Other factors like pricing and promotion strategy and customer service also affect the business promotion on an international platform. The company has to analyze the marketing strategy by taking into account ins strengths, weakness, opportunities and threats. In such a case this garment company will be able to enter the international business in a successful way. E-tailing is a business operation of retailing which occur with the help of internet. It has been introduced in the 20th century and is a business to consumer transaction. According to Rouse (2005)â€Å"E-tailing began to work for some major corporations and smaller entrepreneurs as early as 1997 when Dell Computer reported multimillion dollar orders taken at its Web site†. In e- tailing the online catalogues and business management is done with the help of software tools. This new technological retailing is the new trend in Western countries. In this type of retailing, the consumer interacts with virtual shops to purchase their services and products. In this system, the customer can pay online acquire products by courier and shipping service. Since a decade there had been a hike in E- tailing in western countries however it is still in an infancy stage. Across the world,