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interests aligned

Page history last edited by PBworks 11 years, 11 months ago




Alignment of interests


For Human Resources


key to getting the most out of your organization (see Human Resources discussion).  The key here is to get your employees to have a vested interest in the success of the company.  This can be achieved if they have their interest aligned with the companies.  One way to achieve this is to use stock options, whereby the employees are going to get richer if the stock price of the company goes up.  That way, they benefit if the company benefits.  Studies, however, have shown that stock options are not necessarily the best way to motivate employees, and to ensure employee satisfaction.  Be thoughtful and careful about how you use stock options as a motivation technique.  Other "soft techniques" such as recognition, work sharing, and flexible hours are sometimes better for motivation and keeping employees happy.  But to get to executives to have the shareholders interests in mind in decision making, it is clear that pay grades that are some-how tied to stock performance do have a positive correlation. 




In a family business, this is especially essential to achieve because of the dual nature of the home / work environment.  Also, because promotions are often based on family hierarchy, you may find less-than-qualified, or less-than-interested family members with roles of responsibility.  Making sure their interests long term are in fact tied to the best interests of the company are especially challenging.  see our discussion on Family business for more....



For Supply Chains


Question "How to you make sure the interests of all suppliers are aligned with your own?"  The key here is to devise an incentive system where the supplier and the buyer have incentives to improve the overall cost effectiveness, responsiveness, and agility of the ENTIRE supply chain, and not just their own little portion.  Aligning the interests of all parties will ensure that there is not excessive inventory built up in certain locations, or that pressures for JIT deliveries dont pressure suppliers to stock up on safety stocks.  Focus on incentives to make sure the right signals are being sent to suppliers, and that they are improving the entire system when they are acting in their own best interests. 





International strategy



The strategy component of competing internationally is very interesting.  Some of the key issues are:


1. How does a local company compete against large multinational

2. How can foreigners compete in emerging markets against entrenched local companies (with subsidies, government protection, etc).

3. How do you choose the right markets to compete in?

4. How to you make sure the interests of all suppliers are aligned with your own?


see more in our international strategy section























































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