JVA Corporation Simulation

Institutional Affiliation
JVA Corporation Simulation
Possible Strategies: Employees will receive absolutely no raises, and performance management is eliminated throughout the economic crises. Therefore, employee wages will remain the same regardless of position held no performance reviews are given and there will be no adjustments of missions, goals, and duties during this period.
The economic crisis threatens JVA Corp. from going out of business as a result of declined revenues and high wages and benefits offered to employees. Taking this strategy is the forward way to ensure that the company saves greatly on expenses and is able to maintain its operations in all its plants in other countries. The decision to stop operations in some of the plants is quite drastic as it will see several employees retrenched and stay jobless, considering that the economic condition is unfavorable.
This strategy is workable for a temporal period of time. Once the company starts regaining its performance and revenues increase as opposed to expenses, the company can get back to the normal trend of performance appraisal and reward plans for employees. To avoid employees feeling discouraged, it is good to communicate to them regarding the intended changes, and the way they are likely to affect them in the short term. It is important to reassure employees of the projected benefits of the actions being taken in the long term.
JVA Corp. will cut significantly on its operational costs, particularly on benefits and reward system. Reducing benefits for employees to a minimum of five percent of the revenue will help the firm save greatly and be able to deal with production issues, quality and customer service, hence maintain its reputation in the long run. Once normalcy is achieved, the company can think of introducing group or team performance payment plans (Deshpande & Nurse, 2012), which will see employees being awarded for their joint effort and cooperation in getting the company back on its foot.
The community will also be affected by the current decision as the company may reduce on its corporate social responsibility spending. Although the current strategy does not intend on changing its mission, goals and duties, it will be difficult to keep up to most of its promises particularly CSR. This might affect the company`s commitment to its already established projects that may taint the image of the company as not being able to deliver to its promises.
Changes that are to be effected in this strategy are going to affect employees across all the countries the firm is operational. This will enable the firm to be able to reach its targeted cuts in expenditure. Applying uniformity in the changes across all countries will help share the burden among employees. If the strategy is applied selectively, employees may perceive the management as being unfair in its administration, since recovery in revenue and benefits accrued thereafter are expected to be reflected in the entire firm (Sahlman, 2009).
When the current strategy is employed, it does not matter whether employees are at the headquarters or at the subsidiary countries. Employees are subject to sharing the burden of the changes in the short term and in the long term, reap the benefits accrued thereof.
Even though JVA Corp. may take this strategy, its success depends on the way it is communicated and understood by the various stakeholders, including employees and the company`s shareholders. Without proper coordination between stakeholders, the strategy may not work out to the favor of the company. Some employees may feel the need to leave the company and seek better jobs. This is likely to hurt the company`s performance even more seriously and it may not be easier to recover from the economic crises.
Deshpande, A. & Nurse, K. (2012). The global economic crisis and the developing world: implications and prospects for recovery and growth. London New York: Routledge.
Sahlman, W. (2009). Management and the Financial Crisis. Working Paper 10-033. Harvard Business School.

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