Shui Fabrics Essay

Submitted By namuunbold
Words: 519
Pages: 3

In China job creation is a big accomplishment, because their population is one of the highest in the world and jobs are not enough there. The American displays performance orientation whereby it places high emphasis on performance and rewards people for performance improvements and excellence. The American wants to see a better economic performance and expects higher profits, more than 20% ROI and not contented with 5% ROI. Tasked Oriented. One option taken was thinking of pulling the plug on Shui Fabrics if no improvement in the performance.

On the other hand, the Chinese exhibits humane orientation. The concern is about job creation. Three hundred jobs made pose a real contribution to the local company. The Chinese does not want to cut jobs. One thing more, the Chinese are relationship oriented.
2. Shui Fabrics, the main problem is the labor cost; it is contributing to the low ROI of 5%. he main objective of Shui Fabrics is to improve the ROI from 5% to 20%.
Ray Betzell can have a list of alternatives that he may consider to improve their ROI. One is to increase the sales in the Chinese market and internationally. But this option is incontrollable. It is depending on the marketing strategy that Ray will provide and it will induce an additional cost to the company. Another option is to decrease the cost. Focusing on this strategy will only adapt to the option of Ray’s boss, to decrease the labor force which in turn will provide a serious problem to the management. And besides, only the fixed cost can be controlled and thereby decreased. One last option is to decrease the workforce substantially by incorporating the more sophisticated technology. This strategy will lessen the fixed cost, which is the labor cost, but will need an additional investment on automation technology. Adding new technology will indicate an additional investment which in turn means an addition to non-current assets. This in effect will provide a negative impact on the ROA (Return on Asset). Low ROA connotes low ROI.
With the alternatives provided