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They also have capital budgeting where employees are given rights to decide and spend the
money on purchasing capital equipments. However, for the large investments, a capital project
council investigates the request to check the actual requirement.

2. Problem Statement

The Morning star is one of the top players in the market of the tomato-paste industry.
With this unique structure of “Self-management,” there are some disadvantages also. Some of
the employees faced issues with the company's current structure in terms of compensation and
culture. Mr. Chris has decided to float new compensation structure. But, he is thinking that
whether this new proposal is enough for driving accountability behavior. Also, the self-
management structure will work if they scale up.

3. Alternatives available

Mr. Cheris have two alternatives:

1) To continue with the same lattice structure of the organization like no hierarchy, same
procedures for the compensation, gaining agreements
2) To make some changes in the current structure and current compensation structure

The newly suggested compensation model by Mr. Cheris:

This includes two components. The first is a minimum fixed component and the second is a
premium component. The minimum fixed compensation is the work's market rate and premium
fixed compensation will decrease by 20% every consecutive year.The compensation committee
will review the proposals for premium renewal. They will raise the compensation for the top
performers by 20%.

4. Evaluation criteria

To decide which alternative to choose first we can compare the current structure with
the commonly used hierarchical structure in most of the organization. We can find out the
merits and demerits of the current structure. Also, we need to evaluate the effect of the proposed
new compensation model.