A Michigan Company Consists of Three Subsidiaries

question 102

Essay

A Michigan company consists of three subsidiaries. Each has the respective average payroll, unemployment reserve fund, and estimated payroll shown in the table below (all figures are in millions of dollars). Any employer in the state of Michigan whose reserve to average payroll ratio is less than 1 must pay 25% of its estimated payroll in unemployment insurance premiums. Otherwise, if the ratio is at least one, the employer pays 13%. The company can aggregate its subsidiaries and label them as separate employers. For example, if subsidiaries 1 and 2 are aggregated, they must pay 25% of their combined payroll in unemployment insurance premiums. Determine which subsidiaries should be aggregated.

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Definitions:

Organizational Policies

The formal guidelines and rules established by an organization to govern operations and decision-making processes, aiming to ensure consistency and compliance.

Structural Variables

Elements within an organization that can be adjusted or managed, such as hierarchy levels, departmentalization, and span of control, influencing its operations and effectiveness.

High-Involvement

A management approach where employees are deeply engaged and have a significant role in decision-making processes.

Professional Growth

The process of improving one’s skills, knowledge, and abilities in a professional career through training, education, and experiences.