Using Ownership Incentives in China Essay

1500 Words Oct 6th, 2013 6 Pages
International Accounting – Case #1

Question 1:
There a different ways for Roy Weber to export a local culture of ownership.
He could do so by paying his employees in China the same way he pays his employees in Silicon Valley, meaning that their payment would consist of salary and a percentage of stock ownership depending on their position in the company. With employee ownership he motivates the workers to work hard and responsible because their own success depends on the success of the company.
Also this sends the signal that he values everyone in his company the same way, because everyone is treated equal.
The problem here is his Chinese workforce could think that he tries to force the American way of doing things on them,
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If their aim is to grow a lot in China there will be more stock ownership because there are more key employees like managers, etc. from China needed to obtain that.

Question 3:
It doesn’t necessarily require stock ownership by employees because there are other ways to integrate employees into the ownership culture. For example by letting employees own properties or other assets of the company or paying employees annual bonuses if the company is doing well.
Also simply granting employees stock ownership is not sufficient to build an ownership culture. The main goal is to achieve that workers build trust to the company and get motivated to work hard for the company’s success. This can only be done by letting employees be more involved in company decisions. Through this employees have a higher responsibility but because, with employee ownership, their decisions have a direct impact on themselves as well as the company this might lead to a more efficient, motivated workforce.
Nevertheless should Roy Weber consider that not all employees want to be stock owners because some might only look for job security or prefer a regular salary.

[1] http://www.britishchamber.cn/content/latest-developments-variable-interest-entities-vies
Question 4:
The main questions he should ask are how much of the company’s stock he wants to share with new employees and how the ownership will be distributed.
Should everyone or just key employees

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