ACC640 Week 6 Assignment Business perspective

Name

ACC640

25/10/2022

Business perspective

Brief Overview Successful organization

Apple Inc. is the organization of my choice that has management compensation plans tied to organizational performance. The organization is well­known in the world of technology, and there is no doubt that Apple is the most successful company (in technology) in recent history. Apple Inc. started as a small company made up of Steve Jobs, Steve Wozniak and Ronald Wayne in 1976. The company was called “Apple Computer” back then, but it quickly made a name for itself with the release of the first public computer – the Apple I, which Steve Wozniak himself manufactured. Fast forward to today, and we have many things to be proud of on our favourite computer organization’s part: The most successful product line ever, with over 100 million units sold today! With an astonishingly fast growth rate (O’Grady,2019). The company is located in Cupertino, California, US and has big plans for the future. Apple has a good management compensation plan, and its workers are motivated very well, reflected in the good results. Apple provides 4­5 weeks of paid vacation per year with an excellent overall salary and a bonus system that rewards employees who have contributed more to the company with even higher salaries. The organizational culture is an excellent mix of young and experienced people from around the globe.

I chose this organization because I have been using its goods for years, so I am familiar with it and could write about it without much outside research. I am also interested in the way it works and its structure. I also feel Apple is one of the best examples of how a company can grow from a small start­up to the most prominent computer organization in the world without losing its vision.

Company’s structure Policies for Management compensation

Apple’s policies for management compensation are to reward employees with a good salary and a bonus system based on company performance. Apple provides its employees with an overall salary of $80,000­$1,000,000 per year, depending on their job. Bonuses are given to employees who have contributed more to the company and their products. Bonuses can be in cash or stock shares from Apple’s " RSU " stock program. (Restricted Stock Units) This kind of compensation plan promotes a positive culture and aligns management’s goals with other stakeholders by rewarding workers who have contributed more to the company. Bonuses are based on the company’s financial performance, which motivates the management and employees to do their best and provide the best products to the company’s stakeholders. Bonuses are also given to workers who have worked at Apple Inc. for some time. Apple’s overall good corporate culture can be described as “a culture of excellence” because it believes in constant improvement. One way they achieve excellence is by keeping excellent workers within Apple’s company structure and attracting new, better workers (for every job position) to improve work quality.

The organizational structure of my chosen organization is very horizontal because all decisions are made by executives within each division or department instead of from above, like most corporations. For example, the finance department handles its budget, and the marketing department makes its own decisions about which new products should be made or when. The overall organization is distributed in its structure because employees have much freedom to do what they are told to do, and managers have their teams to manage. This structure creates a very flexible organization that can adapt quickly to changes in the market or changes in the product line.

Another policy for management compensation is that employees must be able to work at Apple and are not afraid to make a decision. Apple provides permanent jobs with internal promotions, and there are no long periods of unemployment or layoffs. This promotes a positive environment for all employees because, in the past, people who have had their jobs taken away from them have gotten depressed about their situation or left the company for another job elsewhere. They feel that they have lost value because their skills or productivity has decreased and therefore, they don’t feel appreciated by Apple’s management structure. This policy motivates employees to try harder for Apple’s benefit.

Unsuccessful organization

Brief Overview

Example of a company that has exhibited poor performance using a management compensation plan in FOX Sports. This company has yielded poor performance in the management compensation plan. FOX Sports is a media company that Fox Entertainment Group owns. The company is the leading producer of sports television networks in the United States (Butterworth,2018). It has been a significant broadcaster of sports events, especially from professional leagues such as the National Football League, National Hockey League and

National Basketball Association. The broadcasting of sporting events generates revenue for FOX Sports in advertising and license fees from paid television providers. For this reason, most broadcasters wish to get affiliations with sports bodies to increase income. FOX Sports Networks were originally part of the Fox Television Stations group, but they were spun off into an independent company in August 2014.

Management compensation policies

In terms of the management compensation plan, FOX Sports is a company that a large media conglomerate owns, so it is one with a very high income compared to its majority shareholder. This company has not been able to live up to the expectations that it set for itself, despite being founded since 1996. The reason for this was because of the poor management compensation plans or policies of this company.

One such plan that has significantly contributed to the poor performance was its stock plan. The stock plan of this company was being criticized on attributes such as expansion into new and emerging markets, which implied a less than stellar performance in terms of growth at a faster rate. It was also criticized as there were many companies that had higher growth rate and quality but had smaller capital base. This meant that it would take years for them to grow at a speed that would exceed the performance of FOX Sports. The company was also criticized as it had plans that failed to take into consideration the strategic opportunities in the industry, coupled with a lack of capital investment to drive revenue growth.

The other poor management compensation plan or policy was the incentive compensation plan or policy. This plan is usually given to senior officials in an organization and it is based on the income performance of its stock. There are many cases where this plan fails because there are too many factors that influence stock value, such as market share and consumer confidence. There are also cases where it fails because the company is not able to match the projections that it laid out for itself. An example of such a company that has failed in this aspect is Fox Sports. The company’s performance has been poor and this was due to the reason that it has been unable to meet its targeted revenue growth, causing it to experience poor stock value growth.

Recommendation

In order to improve, I would suggest that the management compensation plans of FOX Sports be reviewed thoroughly. This may be done by having a strategy team and taking stock of their performance. The variables in the plan should be more than just a number that is freely calculated by an accountant, rather it should take into consideration other elements such as growth and the impact of risk factors (Lynch,2020). A good plan for FOX Sports would include the review of risk factors to make sure that these have been properly weighted and that there are enough buffers to protect investors in case of missed targets. In this way, there will not be a big hit when they fail to meet their targets as they will have an adequate cushion in case they fail to achieve goals.

References

O’Grady, J. D. (2019). Apple Inc. ABC­CLIO.

Butterworth, M. (2018). Fox Sports, Super Bowl XLII, and the affirmation of American civil

religion. Journal of Sport and Social Issues, 32(3), 318­323.

Lynch, L. J., & Perry, S. E. (2020). An overview of management compensation. Journal of

Accounting Education, 21(1), 43­60.