JVA Corporation profile and operations

JVA

The change is permanent in nature. The compensation structure is simply too high in the long run, and needs to be brought under control. 8% of revenues for bonuses is just too much, so this change is going to be permanent.

JVA's revenues are $311.7 billion based on the $53 billion loss being 17%. A total of 3% of that will be eliminated, so $9.35 billion is on the table. This is a significant amount of the money, which is why this option is intriguing.

As noted JVA will save $9.35 billion, the same amount as comes from the employees. There are only two groups in this question and it is a zero sum game between the two groups.

The employees will see reductions in their perks. The travel perk is most likely to be the first to be reduced, but there might be reductions in the other benefits as well. A significant issue here is how it will affect the employees in terms of their morale and their motivation. The employees might at this point feel a sense of entitlement to some of those perks and find that they care less about their work, since they no longer have enticements that are as good.

5. JVA Corp will save money. The company will also face whatever affect this plan will have on the employees. JVA is going to need to find different and creative ways to motivate its employees, since they are no longer going to have the same high-end perks that they had before. It is worth noting that this initiative is not going to save JVA nearly enough money to cover the losses it faced last year. However, it will cut some of the losses and it large enough to be a good starting point.

6. The community is not likely to be affected by this action. The families of the employees of course will not receive the benefits of these perks, but that does not really qualify as a community issue. Most stakeholders of the organization are likely to laud the move as necessary restructuring to help the company get back on its feet. Otherwise it does not appear as though there are any significant legal or ethical issues that would have a significant community impact either way.

7. International employees should also be subject to this change. First, there is the issue of fairness, in that all employees should be treated alike. International employees should not be treated differently. Also, giving these perks to international employees is not free. The point of this endeavor is to reduce costs, and therefore all employees who are receiving these perks will need to have them cut in order to bring the cost down to 5%, or save the $9.35 billion.