Section III: Operation Management (Part IV)

Key Recommendations and Figures

• Entry Mode:

• Promote using social media to get investors.
• To reach this target market of investors, creating a joint venture
• Human Resources:
• When hiring; factors to consider are pay, taxes, and benefits.
• Need to hire employees who already live in that area.

3.1       Entry Mood

The main way to enter a new market like Nashville is to promote using social media to get investors. Of course, getting investors to buy-in is not an easy task, as investors will not be easily persuaded with simplistic promotion in social media. One must utilize a special approach to reach the target market of investors. Joint venture is the path to open the market that we offer. Joint venture is a common way of combining the resources and expertise of two unrelated companies. This type of partnership usually offers great benefits, but it can also present certain risks, as such arrangements are generally very complicated.

As for the advantages of joint venture as follows:

·       access to new markets and distribution networks

·       increased capacity

·       sharing of risks and costs with a partner

·       access to greater resources, including specialised staff, technology and finance

·       use your joint venture partner's customer database to market your product

·       offer your partner's services and products to your existing customers

·       join forces in purchasing, research and development

Joint venture also has disadvantages to consider, such as:

·       the objectives of the venture is unclear and not communicated to everyone involved

·       the partners have different objectives for the joint venture

·       the partners bring in different levels of expertise, investment or assets into the venture

·       different cultures and management styles result in poor integration and cooperation

·       the partners don't provide sufficient leadership and support in the early stages

Base on the graph, Joint Venture is better for businesses long-term. While automation is not ideal in the short-term, they need some time to develop the business to the customer. Thus, making joint venture is suitable with our plan for new market in automation.

3.2       Human Resources

According to law, the minimum wage that an organization has to pay in this area, is $7.25 per hours. In addition, the termination law provides protection to employees, from their employers, who try to terminate an employee in retaliation for reporting illegal activities. This is called the “Retaliatory Discharge” statute. This concept of protecting employees who find the courage to speak up about illegal activities is extremely important to any type of organization. When employees have no fear in speaking out about unfair or illegal behavior, it creates a more comfortable and more productive environment. If employees are fearful of losing their job in response of speaking out, the corruption and unfair treatment happening will continue to grow.

On the other hand, vacation benefits is not a requirement from the state that employers have to offer. Such benefits include both of paid and unpaid vacation to their employees. In regards to maternity and paternity leaves, based on the regulation in Tennessee,  employers must provide unpaid time off to employees for pregnancy, childbirth and nursing an infant. Employees are able to leave, up to 4 months, if they are full-time worker for 12 consecutive months.

There are several independent contractor that have to follow which is:

·       Free from direction and control

·       Has necessary skills and training to complete job

·       Has a business location

·       Performs services for multiple customers

·       Sets own hours

·       Determines own price for contracted services

·       Not eligible for employee benefits

·       Provides equipment and tools used to complete job

·       Supplies materials needed to do job

·       Personally liable for errors and/or accidents

·       Files self-employment taxes

·       Has right to hire and fire workers

·       Must legally complete each contract

Then for requirement benefits which have three main issues which is Pay and Holidays like full-time employees will receive 11 holidays off with pay every year. Insurance such as Health insurance, dental insurance, and medicare supplement. The number of leaves an employee receives depends on the years of services. For 0-5 years of services, the employee would receives 1 annual leave day per month, with 30 days maximum. Then employees with 5-10 years of services will receive 1 and a half annual leave day per month, with 36 days maximum. Follow by employees with 10-20 years of services will receive 1 and a third annual leave day per month, with 39 days maximum. Lastly, employees with 20 or more years of services will receive 2 annual leave day per month, with 42 days maximum.

It is illegal to discriminate against any employee based on gender, race, religion, and national origin. Examples of employment discrimination are; denying certain employees benefits, and excluding potential employees during recruitment. When talking about anti-discrimination within the workplace, there are two main forms. The first form is disparate treatment discrimination, which occurs when an employer intentionally discriminates against an individual because they possess one of the protected characteristic. The other form is disparate impact discrimination, that occurs when an employer’s facially neutral policy or procedure unduly burdens employees from one of the protected classes of individuals.

In terms of recruitment, Nashville needs to hire new employees when they expand and enter the new market. In fact, they should recruit and select candidates who live in the new local market. This would be very beneficial because they are already accustomed with the local environment and cultural norms. As a result, they can understand and directly relate with the customers on a much higher level. They could also respond to their need more quickly and effectively.

Though there are several ways to recruit potential employees, website recruitment is one of the most popular methods. Out of the three top websites, LinkedIn is the most popular site for a recruiter to find well qualified job candidates. The website Indeed is also one of the top most effective website to combine the information from job boards, news sites and company listings. Lastly, the website Glassdoor has new job postings added every day, as well as provides the context to see if it’s right for specific candidates. 

The expenditure for posting job ad on resources depends completely on the specific website. For example, LinkedIn charges $495 for a month job posting, 20% discount for 5 job pack, and 40% saving for 10 job pack. They create these deals to get companies to post more than just one opening.

The first and most important factor when posting an advertisement, is to make sure the job title is clear and descriptive. This ensures the prospective employer can tell what kind of job it is right away. There are hundreds of postings on these websites, so if a company comes off confusing or hard to understand, the viewer will move on and not waste any time. Secondly, the advertisement has to provide specific requirements such as experience, knowledge, skills and qualifications clearly, including position details such as responsibility, salary, and location of workplace.This is important because then the company will not receive hundred of unqualified candidates, and the candidates do not waste their time applying to jobs they have no chance of getting.

For the compensation, there are 5 levels of structure which is cash wages, non-wage costs, Statutory welfare costs, voluntary social benefits, and retirement allowance. There are also two main forms of compensation; direct and indirect form. Direct forms include salary, hourly, commission, bonuses. Based on the location of Nashville that under Tennessee state, the minimum wage that employers have to pay their workers are $7.25 per hour. On the other hand, indirect forms include benefits and equity based program.

With minimum benefits that have to provided like Disability insurance, Family and Medical Leave, Paid Time off and Other, Leave Benefits, Social Security and Medicare Taxes, and Unemployment Insurance. In addition the employee stock options or a common stock of company are one of the indirect benefits too. This is the mostly offered to management with restrictions on the option in an attempt to align the holder's interest with those of the business shareholders. There are two types of employee stock options which is incentive stock options and non-qualified stock options. Furthermore, there are some other benefits that provided by agreement between an employer and an employee, most of these benefits are not required by law. For example, training program, company car or transportation, and accommodations.

Moving on to the topic of taxes that employee have to paid, the Tennessee income tax does not apply to salaries and wages, but most income from stocks, bonds and notes receivable is taxable at a flat rate of 6%. Then There are only a handful of wage compensation items that can be exempt from the Social Security and Medicare taxes like Medical insurance premiums (both employer-paid and employee-paid), Employer contributions to a retirement savings plan,, Contributions to a health savings account, and Long-term sick pay (after 6 months since the employee last worked).