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Profissional Documentos
Cultura Documentos
Reviewed by
Dhaval Doshi
11413
Mexico
Product
Refrigerators
Production
Mexico
Sales
Mexico
Differentiator
Growing
demand
Denmark
High priced
kitchen Appliances
U.S
Denmark
No
competition
Japan
Low cost laundry
machines
Japan
U.S
Low cost
Question 1
Under the current performanceevaluation system (PES) at Falcon, how
would you assess the financial
performance of the division managers in
Mexico, Denmark, and Japan?
Which manager should be awarded the
highest bonus, and which should be
awarded the lowest bonus?
Year 2004
Mexico
Denmark
Japan
Budgeted
Profits( US $ )
14,910,000
8,282,640
20,420,825
Actual profits
( US $ )
14,937,721
9,691,788
17,839,177
27,721
14,09,148
(2,581,648)
Difference
Highest Bonus
Lowest Bonus
Question 2
Using the approach outlined in Appendix A, calculate the
nominal and real changes of exchange rates for Mexico,
Denmark and Japan during 2004?
In light of your calculations what revisions if any would
you make in the 2004 dollar budgets at the time of
tracking them?
How would you assess the financial performance of the
three country managers of Falcon?
Which manager should be awarded the highest bonus?
Why?
Evaluate appropriateness of the three country managers
responses to the changes in exchange rates?
Mexico
Denmark
Japan
2003
10.72
6.88
119.8
2004
10.985
6.47
111.8
11.00
Denmark : 6.88*1.043/1.023
7.014
Japan : 119.8*1.0225/1.023
119.74
Mexicos ROI:14937721/149100000*100=10%
Denmark's ROI:9691788/20706600*100=47%
Japans ROI:17839177/510520625*100=3%
Hence Denmark should be awarded highest bonus and Japan
the least
Advantage
Limitations
Thank you