Barberry Inc Manufactures A Product Called Fruta

Posted By Admin @ Mar 01, 2022


1. For the compensation of the lost bonus of employees, a loan should be applied from the bank. Then, the next step is the employees’ lay off so that fixed costs can be reduced. For better future development, a new bonus system is needed with some considerable points. The insurance compensation used in Europe should be applied until then. It has been observed that 50 to 70 percent loss can be covered by this insurance. However, it is important to explain the issue and also give an apology. It is difficult for the company to come up with any substitute product or even reproduce their product for a European customer, so it is viable to provide compensation through a complete refund.

Advantages Disadvantages

• The cripple cash flow can be repaired immediately • The future development would potentially be stressed because of paying back the loan

• A new and better bonus system will encourage all employees to give their best by making more efforts • The downsizing of the company is forced

• The new bonus system can have more space and flexibility • Next year, the insurance fee will be increased

• It will help them to get their reputation back in Europe because they will compensate the customer for his/her satisfaction • The remaining employees will lose their confidence in the company in terms of hiring and retention of employees

2. In Europe, customers should be refunded through insurance compensation. The current employees should be handled properly with an existing bonus system, whereas employees should be compensated once the issue is resolved. The customers from Europe should be paid money at less cost so that the insurance company can give them the money. It is also critical to take employees into confidence regarding the situation. They should be explained the situation, why refund cannot be paid right now, and how they will be compensated later if they continue working with the company.

Advantages Disadvantages

• The productivity & efficiency will be increased when original bonus system will return • The cash flow would not be repaired as majority part of the insurance compensation is going to be spent for refund

• It is evident that the company values its employees as they want them to retain even in this difficult situation • Many employees can go for the option of leaving the company because they are not able to get their bonus as well as compensation

• The European market can be maintained on its maximum limit • The bonus system does not have any kind of flexibility

3. The European customers should be paid a refund with the help of insurance compensation. The other viable thing is to fire those employees, who have been hired in the last 5 years' time, which means any employee over five years of experience with the company should not be fired. It will help to save some extra expenses. The remaining employees should be compensated accordingly, whereas the bonus system should be canceled for the future.

Advantages Disadvantages

• The cash flow problem should be solved immediately so that bonus can be paid • The relationship with Europe should not be considered

• The costs for the company should be as less as possible so that company does not face any development pressure in the nearby future • Directly firing employees is unethical especially without giving any compensation

• The reduction in extra workers will reduce the expenses • If there is no bonus system, the employees will be discouraged and de-motivated