Question
Landscape Ltd's salaried employees (managers and head office employees) earn 10% lower than the industry average. Its shop floor staff earn the National Living Wage (or minimum wage). Arguably this approach to strategic reward fits in with Landscape Ltd's low-cost competitive strategy. What is the above example describing in terms of strategic reward? A. Horizontal integration B. Vertical integration C. Resource based view D. External relativities
Answer
4.7
(253 Votes)
Keira
Elite · Tutor for 8 years
Answer
D
Explanation
The example given in the question pertains to the system of strategic rewards which is an incentive-based compensation system. The concepts mentioned in the options: horizontal integration, vertical integration, resource based view and external relativities are different aspects/strategies of business that companies use for various objectives. Here, Landscape Ltd. is aiming to minimize the cost of labor including salaries which is evident from their approach to pay 10% lower than the industry average to the salaried employees & minimum wages to the shop floor staff. This effort of theirs to cut down on staff expenses can be interpreted as an aspect of the company's strategic reward policy aimed at sustaining its low-cost competitive strategy. The system utilized here points towards "External Relativities" which entails that pay is usually set in response to market conditions to ensure competitiveness so it's in relative to the external conditions.