Mobile Business Incorporated (MBI) Is a Worldwide Manufacturing Company That

question 12

Essay

Mobile Business Incorporated (MBI) is a worldwide manufacturing company that specializes in high technology products for the aerospace, automotive and plastics industries.The state-of-the-art technology and business innovation have been key to MBI's success over the last ten years.
After a meeting of the board of directors, there was some feeling that the company was moving away from its goal of striving to maintain and expand its global position through innovative management teams.
One area of concern was with the company's bonus compensation package.The company's current bonus plan focuses on giving reward based on the utilization of capital within the company, i.e.management of inventory, collection of receivables and use of physical assets.Even with such a state of the art bonus plan, the board of directors is concerned with the short-term focus of the compensation package.MBI's basis in current financial standards suggests that the future period consequences of managerial actions will not be reflected when presenting bonus compensation.
Required:
Help MBI solve the problem of basing bonuses on short-term decisions.Develop a bonus package that takes into consideration the long-term financial position of MBI.

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