Essay Sample on International Activities: Essential for Firm Monopoly Advantage

Introduction

International activities play an essential role in ensuring that firms have an upper advantage over their competitors. This advantage results in a firm being a monopoly because competitors will fail to keep up with the rate in which the business operates. For instance, a firm that imports its goods from the country of origin will sell at lower prices compared to a firm that buys the products through a supply chain. Lower pricing will ensure that they attract more customers forcing its competitors to reduce their rates, leading to failure as a result of a small profit margins.

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Through differentiation of its products, a company attracts consumers who would like a unique product from the one existing in the market. Porter (1999). Activities such as merging help to create competitive advantage because when two organizations combine to form one company, they will come up with ideas that when put together helps to produce quality goods or service that is attractive. Marketing helps in creating awareness of the existence of certain goods and services, thus, informing consumers of its availability. Adopting modern technology in an organization help in the production of quality goods that are preferred by consumers.

An International Compensation Program

An international compensation program is designed to motivate and suit the needs of expatriates, with a net pay that is equivalent to what they would be earning when working within the country. There are several factors to consider when designing an international compensation program, so that a favorable amount to both the expatriate and the company or the state is agreed. One of the strategies is developing a compensation philosophy and having a well-designed strategy. When there is an elaborate plan for compensation, a company is in a great position to execute its duties as there is consistency in the payment of its employees, thus, facilitating employees’ mobility.

Currency fluctuation is also considered when designing a compensation program. The difference in currency is evaluated to find a compensation program because the value of the currencies varies from one country to another. Evaluation of currencies ensures that employees’ who work in different countries receive equal compensation fee. The rate of inflation in the country that an employee works is considered to ensure that the employee gets a standard pay equivalent to the nature of the job he or she does. When designing a compensation program, accompany should consider having a group of leaders who will oversee the running of operations in different countries. The task of the leaders is to ensure the activities in various countries run smoothly. The leaders will also ensure that the organization growth occurs as expected.

Salary

Basic salary is an important factor to consider when designing an international compensation program. The basic wage is normally equal to the amount one would receive when working within the home country except for a few adjustments as a result of economic differences. The amount is calculated using several approaches such as the home-country-based approach which aims at giving the employee the same standard of living that they would have in their country. The host-country-based approach provides the employees with a salary equivalent to that of the host country, among others.

Incentive compensation is a facet considered when designing compensation programs and involves rewarding individuals based on their performance. It may not apply to all countries or organization due to financial constraints. The main aim of compensation rewards is to motivate the employees. Premiums and allowances are also considered when designing compensation. They are issued when the employee is assigned in harsh conditions, for example, the military or to aid in educational purpose if there is a difference in the cost of education between the two countries.

Emergency Leave

Emergency leave is included in a compensation program in scenarios where an expatriate has an urgent situation. It allows as the expatriate to be fully paid while away for a short period to attend to functions like funerals. Home leave is included to allow an expatriate to visit their families who may not be living abroad together. Spousal employment is done to enable the partners of those working abroad to have the capacity to provide necessities to themselves. The international compensation program includes the assignment completion bonus to expatriates who work abroad. The payment is made after completion of the assignment. This bonus acts as a token of appreciation for the time an employee spent abroad.

Conclusion

The balance sheet approach to expatriate compensation is used to ensure that expatriates can maintain their home purchasing power while on a temporary international assignment. Curran. M. (June 16, 2017). Employees of a certain country or organization are paid their net salary, including allowances, to enable them to sustain their bills abroad and provide for their families at home. Calculation of the compensation is influenced by the amount the expatriate usually earns and the family size. There are adjustments done to the pay to take into account the current exchange rates and inflation in both countries.

References

Michelle Curran, ( June 16,2017). The balance sheet approach to expatriate compensation. Forum expert management.
https://www.forum-expat-management.com/posts/17910-the-balance-sheet-approach-to-expatriate-compensation#the%20Balance%20Sheet%20Approach%20to%20Expatriate%20Compensation,on%20a%20temporary%20international%20assignment

Porter, M. E. (1999). Competitive aadvantages. Antitrust Bull., 44, 841.
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