Discussion 5.2

Discussion Question 5-2

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Instructions  
Your Discussion Question response should be both grammatically and mechanically correct and formatted in the same fashion as the question itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your responses and document in a bibliography using APA style. Page 2

Discussion Question 5-2

Please review Case Study 1.1 in Chapter 1 of Tarique, I., Briscoe, D. R., & Schuler, R. S. (2016). International Resource Management (5th ed.). See Below

Part A

Yarn Paradise is a micro-MNE. In DQ 1-1, as an HR Director, you determined its likely next stage of growth and the potential Human Resource challenges stemming from further growth. In DQ 3-1, you considered the various choices that MNEs have for designing organizational structure and chose an ideal organizational structure from your perspective as HR Director. You have also responded to your CEO on your thoughts on whether he should pursue an international joint venture (IJV) and how a global virtual team can fit into the structure. Now, your CEO asks you to investigate global remuneration plans for your virtual team employees. What would the major issues be for Yarn Paradise related to the effectiveness of global remuneration plans?

Part B

The CEO has now asked you to consider the various common international assignment management compensation systems. What are the common international assignment management compensation systems, and what are the advantages and disadvantages of each system? When would they be used most appropriately for Yarn Paradise?

 

Case Study 1.1 : Yarn Paradise: World’s Biggest Online Yarn Store (Turkey)

Yarn Paradise was created by Ferit Göksen, who was born and raised in Kaseri, Turkey. After attending college, he relocated to Istanbul to obtain his MBA from Marmara University, where he became interested in international trade and development. After he received his degree in 2001, he and his partner began selling different items on the eBay platform in Istanbul. In 2004, he combined his technology skills with his partner’s traditional business skills and together they founded GSC Tesktil. “After a few years, we wanted to focus on a specific product. We noticed there was a market for yarn, and we decided to try selling it on eBay.” Today, the business successfully utilizes the power and reach of the Internet marketplace to sell yarn products worldwide. Yarn Paradise has two websites— www.yarnparadise.com  and  www.iceyarns.com —and also sells on ebay.com.

The company employs between 15 and 20 people. “It’s great to be able to give 20 different families in my community a job,” explains Ferit, even though 98 percent of the company’s sales are outside of Turkey. While that was not his original intention, the Internet allowed Ferit to reach customers all over the world. About 35–36 percent of sales are to the US and the rest are divided between European countries and Asia. “Yarn Paradise has sold to almost every country in the world including Norway, France, Germany, the UK, Denmark, Sweden, Canada, Australia, Malaysia, New Zealand, Thailand, Trinidad, Ecuador, Egypt, Haiti, and many more. Sometimes I have never even heard of the country, until I get ready to ship the product,” says Ferit. Obviously, there is still much room for growth. Yarn Paradise uses companies like DHL and UPS to help with shipping and logistics. While most transactions are quick and seamless, there are some problems in countries where online commerce is still new, such as Eastern Europe. The biggest issue for Yarn Paradise is customs and customs duties. Buyers are often surprised by them and this creates a bad customer experience.

Source: eBay inc (2014). Micro-multinationals, global consumers, and the WTO, Report from a global conference at the 2013 WTO Public Forum on e-commerce and trade, downloaded at  http://www.ebaymainstreet.com/sites/default/files/eBay-WTO-PF2013.pdf

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