Contribution #7 - Chapter 14

After reading through Chapter 14 I came across the Competing Through Sustainability article called “Employers in China Have Issues Shedding Workers.” This article talks about employers in China having issues in cost cutting, termination and redundancies. Landmark labor laws recently enacted in China have strengthened protection for workers, including wage standards and social security benefits. Chinese labor law prohibits “at will” firing practices which is very common in the United States. Employers must have a legal basis for firing any employee. Another important topic in this article is that going on strike is illegal in China. Although it is illegal, workers have been known to engage in work stoppages and slowdowns.

This article was interesting to read because some of the labor laws and practices in China are quite different from that in the United States. On occasion, employees in the United States will go on strike whether it be for a raise in wages or for unsatisfactory work conditions. Also, the “fire at will” practice is common in the United States. It would be interesting to see if that practice was outlawed and how companies would react and what they would do to downsize their workforce.

Contribution #6 - Chapter 12

After reading Chapter 12 in the book, I came across the Competing Through Sustainability article called “Google’s ‘One-to-One’ Exchange Could Prompt Others to Follow”. This article talks about Google Inc.’s exchange offer for employees with worthless stock options. This is a relatively generous offer and could prompt other companies to follow suit. This was interesting to see because Google Inc. does this to help employees whose compensation has suffered in the stock-market meltdown. The past few classes we have been talking about alternatives methods compensation rather than cost-of-living compensation or merit-based compensation. This is a very interesting method to combat employee’s compensation that is suffering, a method I would have never thought of. Many experts say that since Google Inc. is such a large company, that other companies may follow in the steps of Google Inc. and offer option exchanges. One expert said that it is an appropriate method and that generosity is in the eye of the beholder. He also said that the option exchange is better for other shareholders than Google issuing new shares, which would dilute other shareholders’ ownership stakes. This is a good alternative to help employee’s whose compensation is suffering.