Question

Fundamentals of Financial Management Beijing Institute of Technology GRADE SHEET HOMEWORK 01 Student NAME: ID: Problem Problem Statement Answer Points Grade The front desk receptionist routinely takes an extra 20 minutes of lunch to run personal errands. Division managers are padding costs estimates to show short term efficiency cost gains when the cost come in lower than the estimates. The firm's chief executive officer has secret talks with a competitor about the possibility of a merger in which (s) he would become CFO of the combined firms. A branch officer lays off experienced full-time employees and staffs customer service positions with part-time I-d for temporary workers to lower employment costs and raise this year's branch profit. The manager's bonus is based on profitability TOTAL Homework 01 Grade Sheet of 1

Answer 1

1 - a) The receptionist taking extra lunch time is unproductive for the company.Since it cost the company , several methods can be adopted to take corrective measures. One thing is to pay the receptionist on hourly basis.Another method is to fix a time schedule for lunch.The management must talk to the receptionist about the situation and remind her about the duties & responsibilities.

1 - b) A proper reward system should be maintained in the company.Reward must be given according to how close the employee's estimates come to the actual cost.Otherwise division managers should not be rewarded.

1 - c) The merger could be beneficial to the CEO.One way to reduce the loss of shareholder wealth is to open the firm up for the purchase bids from other firms, once the manager makes it known that the firm is willing to merge.

1 - d) Appointing part time or temporary workers is not a wise choice because they are not experienced and will be less productive.But the firm will gain short profit because they do not have to pay as much as they paid to experienced employees.The firm will be more productive and profitable only if the employ experienced employees.