Vega Corp's Corporate Income Has Declined to Unacceptable Levels

question 124

Essay

Vega Corp's corporate income has declined to unacceptable levels. To change the direction of the company, the board of directors hired a new chief executive officer. She is currently considering three alternative ways to reward division managers for performance. They are:
1.Give each manager a competitive salary with no bonus for performance.
2.Give each manager a base salary with the largest portion being a bonus based on performance, ROI being the yardstick.
3.Give each manager a base salary with a bonus based on comparative performance with the other divisions.
Required:
Evaluate each of the ideas, giving strengths and weaknesses.

---

Definitions:

Input

Resources, information, or effort that goes into producing a service or manufacturing a product.

Time To Market

The duration it takes for a product or service to move from conception to being available for sale to consumers.

Consumer Adoption

The process by which customers accept and purchase new products or technologies.

Product Launch

The introduction of a new product to the market, encompassing activities from marketing to distribution.