Question one
There are several options that exist, but not all of them need equity compensation for employees from foreign countries. Therefore, there are some different options to be adopted, and they are as follows:
The founder of the business should offer similar structures of equity and the company policies that applies to all employees irrespective of the location of the office. By adopting this system, Ben will be able to demonstrate a commitment while creating a culture of the organization around the globe especially by valuing every employee internationally on the similar employment terms that are equitable right from the opening of the office of the company. However, there is a major challenge to this method in the sense that the perception of the Chinese employees may be that Ben Freed is making the American workers dominate the approach, and this might neglect the business values and style of management of the Chinese.
Similarly, the business founder should make some modifications in the structures of equity based on the location of the region in which the business operates. Consequently, this option will enable the business owner to make efficient accommodation of regulations in local tax as well as the cultural needs. Similarly, the option will also enable Ben Freed in creating a flexible ownership structure especially when Tech Design will be opening new branches in foreign countries. The limitation of this option is that the accounting and tax reporting of Tech Design will be increased since different nations have different accounting systems and tax laws.
Ben Freed should be in a position to provide different options in stocks particularly to the American employees, and he should also rely on different mechanisms to create a culture of loyalty and ownership among the Chinese employees. By taking such actions, Ben Freed will be capable of separating two types of ownerships that are financial ownership and psychological ownership. Therefore, he will depend on the local staff instead of developing and proposing for their incentive structure for the new group. However, the staff from America may react negatively by demanding for their benefits.
Ben Freed, the founder of Tech Design, should not make an immediate decision on hiring local employees from China, but he should transfer the majority of his workers on a temporary basis to China to launch the new company office. This strategy will allow the American staff in China to hire, train and build the new employees in China on a gradual basis to make them understand the nature of work and how to operate the new business in China. Since the new employees are always empowered to make an influence on the strategy of the office in China, Tech Design Company should not offer options for equity. However, this option will enable the founder of Tech Design to address less experience in a foreign country (China) since he will depend on the employees that he already knows and trust better. On the other hand, employees from America and China are not equal in terms of experience. That is the American workers are more inexperienced with the business operations and culture in China. Similarly, the time that they take in China will always take away from their hard work of developing other foreign markets.
Question two
According to this case study, the decision of Ben Freed will rely on many business factors. Some of them are the long term and short term objectives of the company, the growth of the company and the revenues that should be available for the company, and support of business ideas especially from the Board of Directors of Tech Design Company. The founder should also make a consideration of the tax and legal laws regarding equity compensation in U.S and China, the number of workers that he should hire and employ and their levels of experience and job responsibilities. Lastly, the founder should consider the reactions of his current staff.
Question three
Regarding this question, the option of giving out stocks and donations from the government will not automatically be a substitute for the deep commitment among employees. However, the thought of people concerning the options of stocks and grants will affect their thinking about the organization. Therefore, both financial and psychological ownerships should be matched. The creation of the culture of ownership will always depend on the participation of the workers while making work decisions.
The basic level of participation asserts that participatory management means the act of empowering workers to make a contribution towards decision- making within the organization. However, the decisions being made are not executive since lobbying for the input of the employees especially at this high rank has got less impact during the creation of ownership and culture. But the matter revolves around the amount of control that the employees do have while making decisions concerning the progress of their work and how it is done more than what the company is strategically doing. When employees become involved in employee related decisions, some scholars propose that employees will feel more bestowed within their respective firms.
On the other hand, not all employees would wish to shareholders of any company even within the initial stages of starting up a company. Consequently, the ownership of the workers needs a proper sense regarding the sense of personal responsibility. Therefore, not all employees will desire for extraordinary commitment to the company or will be able to purchase the shares of the company at the similar degree. However, the strategic employees are eager to do extra work concerning the growth of the company. Therefore, such workers should be rewarded by their efforts by the business founders and managers especially at the beginning of the company. In contrary, the general workers always desire for the security of the jobs, and this is supported by some academic research which indicates that almost 22% of all employees would like to choose a contract for classic workers.
Question four
While making decisions for his company, Ben Freed should ask himself the validity of the following questions:
How many percentage of the total stocks of the company will it share with the new employees from China?
Should the top performing employees receive the options for stocks upon hire?
At what intervals should the stock options be offered to the key performing employees?
Even after most employees have bought the shares of the company, will the ownership distribution be sufficient to create real ownership for most employees?
Within the company, who will supervise and track the compensation of the company’s employees?
Are the current procedures for hiring new employees skillful and knowledgeable?
Concerning the investors, Ben Freed should consider the following questions to ensure that there is adequate support:
Is the culture of ownership meaningful to the investors?
Are the investors concerned with the shareholders from China?
What are the specific metrics of performance the investors would like to witness from China?
Have the investors ever worked under professional guidance concerning employee ownership?
Likewise, Ben Freed should consider some business experts from China by asking them the following questions:
What are the expectations of the employees from China concerning their compensation?
Does the compensation package change depending on the job level?
What considerations that the employees from China would like to consider regarding the equal ownership in a startup?
While considering the reverse exportation, should Ben Freed bring the previous workers from China to the headquarters?
Question five
For the purpose of creating a long lasting and good organizational culture, the research has indicated that the values concerning the values of employee ownership have to be fixed by the company during the startup stages of the company. Regardless of the change in priorities among the staff members, the management should be responsible for passing important information to the workers regarding their ownership so that it can become a continuous information. The employees should not be remunerated financially at steady intervals, but it should be a continuous process that is originating from the management that includes other ownership of rewards such as intangible benefits. Similar, the company should embrace an open system of communication since it is an important method of satisfying an effective culture within the company.
In order to make good communication channels in Tech Design, Ben Freed can start by making a combination of the following tactics of communication: more importantly, the business founder should adopt the use of both formal and informal meetings in the company. Secondly, he should pass a message to various departments by making announcements through emails and the company’s pamphlets that usually contain the information regarding the profile of the company. Thirdly, Ben Freed should use the wide voice mail of the company and at the same time, he should use the policy of open door particularly for impromptu queries and issues in the company.
Lastly, Ben Freed should pass appropriate messages concerning the sessions for training the employees. Similarly, the meeting for orientation for new workers should be properly scheduled and the role that every employee play in the organization as well.
In summary, messages for communication purposes in the company must be simple, straight to the point and should be genuine (Carleton: 6). This implies that Ben Freed should be in a position to make a clear and concise speech while addressing his employees so that the employees can understand the situation of the company. All employees should be in a position to communicate with one another because it is critical to the business activities when they communicate accurately while passing important information. For instance, if Ben Freed, the owner of Tech Design is planning to engage all workers in improving the business operation of Tech Design Company as a common shareholder, then the aims of his communication to the employees should contain some elements of business education. Similarly, the content of his message will rely on the understanding of his workers regarding important matters like the strategy of the business, improvement of performance goals, and the financial statements of the company.
Work cited
Carleton, Tamara. "Using Ownership and Incentives in China". Teaching Notes 1.10 (2011): n. pag. Print.
