Meeting the budget is very crucial for Texas Instruments since it will measure

Meeting the budget is very crucial for texas

This preview shows page 7 - 10 out of 10 pages.

Meeting the budget is very crucial for Texas Instruments since it will measure how the company’s efficiency in allocating their resources. 3. Implication for reporting Criteria Hewlett Packard Texas Instruments Frequency of informal reporting and contact with superiors The company gives more focus on reporting the policy issue as the company is more involved in developing new products. Its reporting operating issues is less frequent. The company gives more focus on reporting the operating issue as the company is more involved in operational activities such as manufacturing and assembly . Its reporting policy issues is less frequent. Frequency of feedback from superiors on actual performance versus the budget The frequency of feedback from superiors on actual performance versus the budget is less often in this company. Review of the company’s progress is always conducted by the higher levels in the organization. Monthly status report of each action program were distributed to all levels. 4. Implication for incentive compensation and performance evaluation Criteria Build - HP Harvest - TI Percent compensation as bonus Relatively high Relatively low Incentives are given to innovation/discoveries and successful market acceptance of the new products. Relying The company’s profit margin may be low, but sales, in general is consistent. This entails lower risks thus, special compensations are
Image of page 7
on research and development will put a lot of uncertainty on the company, therefore management expects higher compensation. limited. Management are more reliant on regular salaries and compensation than bonuses. Bonus criteria Non-financial criteria Financial criteria As the company is very dependent on new innovations and target sales are more dynamic, thus market development, new product development and HR development are considered very important. The harvest strategy’s goal is to be consistently cost effective to complete at lower prices. Therefore, cost control, operating profit and cash flow, and ROA or EVA are all seen as important because they promote efficiency and productivity. . Bonus determination approach Subjective Formula-based The criteria are difficult to measure objectively as the effects are long-term. The criteria is very applicable to day-to-day operations. Frequency of bonus payment Less frequent More frequent Since the nature of assessment is long-run, therefore bonuses are not expected to be given regularly. As the criteria can be realized in a short period and focus on day-to- day operations, therefore time bound targets (monthly, quarterly, and annually) are often rewarded consistently. Conclusion and Recommendation Texas instrument and Hewlett Packard are two giant companies that run their business in the same industry. However, both companies must have different strategies as the objective that
Image of page 8
they would like to achieve is very different as well. Generally, different strategies require different system such as strategic planning system, budgeting system, reporting system, performance measuremaent system and incentive compensation system. In this case, since TI
Image of page 9
Image of page 10

You've reached the end of your free preview.

Want to read all 10 pages?

  • Spring '19
  • Ahmad Mutaaqin
  • Management, Strategic business unit

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors