Top Management of the AIG and Ebay - Case Study Example

After a public uproar about the bonuses, the top management asked the employees to repay the earnings, which according to Jake was unethical as the company had contractual obligations to its employees.

Question 2

AIG made contractual agreements with the employees as a control measure to ensure that they stayed at the company. Therefore, it paid bonuses to the employees as part of their contractual agreement. The rewards resulted in a public uproar as the money used to pay the bonuses was from federal reserves issued to AIG as a bailout.

Question 3

The employees of AIG believed that the company had an obligation to pay them their bonuses, while the public thought that the bonuses were unethical as the money had come from federal reserves. Companies should have well-detailed contracts with employees clearly showing when bonuses should be paid and cases when the company may fail to issue the bonuses, to prevent such scenarios in the future. External regulations ensure that firms and individuals act ethically towards the general public. They are very efficient as in the AIG case where a 90% tax was imposed on the bonuses thereby protecting the general public.

Question 4

The company had an obligation to pay the employees their bonuses while at the same time had an obligation to the public to use the bailout money prudently. To ensure that both requirements were met the company needed to pay the bonuses in installments depending on future profits that the company made. The company should have used the bailout out money first to get back to profit ways and later pay the bonuses to deserving employees.

                                                            eBay

Question 1

eBay pursued international growth through its three main components; products, sense of community, and aggressive expansion. It had a broad range of product categories and trading platforms that offered a wide variety of pricing formats allowing it to compete directly with major competitors such as amazon.com and to penetrate new markets. eBay created trust between buyers and sellers and enlarged their market ventures through the creation of more localized sites.

Question 2

The greatest source of competitive advantage for eBay at the moment is its broad capital base. With an average net income of about $2 billion yearly, eBay has a large capital base that allows it to deal with competitors through acquisitions and strategic partnerships. Through acquisitions, eBay has attempted to acquire a stake in the Asian markets. However, the acquisitions do not adequately deal with the Asian markets. According to Alibaba’s CEO, this is because changes at a global level by eBay had to be approved in the U.S.

Question 3

eBay’s greatest challenge at the moment is to undo its competitors in the Asian markets. In Asia, competitors outshine them greatly. For example, the Chinese market share is dominated by Taobao, which has a 70% market share. Their acquisition strategies are yet to beat their Chinese competitors.