profit sharing

Examples of profit sharing in the following topics:

• Management in Different Types of Business: For-Profit, Non-Profit, and Mutual-Benefit

  • A for-profit business is an organization engaged in the trade of goods, services, or both to customers with the goal of earning profit to increase the wealth of the business's owners.
  • In contrast, a non-profit organization is legally prohibited from making a profit for owners.
  • This means managers must motivate by community-building and a sense of shared accomplishment.
  • A mutual-benefit non-profit corporation can be non-profit or for profit.
  • For example, a manager of a for-profit company may be able to motivate employees through bonuses for sales targets or profit sharing.

• The Importance of Fringe Benefits

• Porter's Competitive Strategies

  • Empirical research on the profit impact of marketing strategy indicates that firms with a high market share are often quite profitable, but so are many firms with low market share.
  • The least profitable firms are those with moderate market share.
  • Porter explains that firms with high market share are successful because they pursue a cost-leadership strategy, and firms with low market share are successful because they employ market segmentation or differentiation to focus on a small but profitable market niche.
  • Firms in the middle are less profitable because of the lack of a viable generic strategy.

• Financial Rewards for Managers

  • The basic premise is simple: the more sales or profits generated by the individual, the larger the share of the organization's profit that individual will receive in return.
  • CEO pay growth compared to employee salaries, U.S. gross domestic product, and overall U.S. corporate profits

• Internal Stakeholders

  • For example, employees may be most concerned about such things as job security, pay and benefits, rewards and recognition, while stockholders care most about business growth, share price, and profitability.
  • Managers may own shares in the company, or may receive bonuses or other perks if the company does well, which is why they push for success.

• The Importance of Productivity

  • For businesses, productivity growth is important because providing more goods and services to consumers translates to higher profits.
  • Profitability is both a result and a criterion of business success.
  • Profitability of production is the share of the real process result that the owner has been able to retain in the income distribution process (profits earned).
  • Factors describing the production process are the components of profitability, which are revenues and expenses.

• Competitive Dynamics

  • The competition is a moving-target, ever-evolving and adapting to better capture market share and profitability; therefore competition is a critical area of analysis for strategic managers.
  • The folio plot visualizes the relative market share of a portfolio of products versus the growth of their market.
  • Note that the highest-selling product, Dorian, shows the highest market growth and a high (though not the highest) market share; the lowest-selling, Zodial, shows both low market growth and low market share.

• Types of Organizations

  • They can be either for-profit or non-profit.
  • Proponents of this strategy argue that it can help create a more creative work environment and allow for more problem-solving and sharing of information.
  • But regardless of whether a for-profit business uses formal or informal communication strategies, they all share the same goal of making a profit.
  • In contrast, a non-profit organization (NPO) is legally prohibited from making a profit for its owners.
  • Associations may take the form of a non-profit organization or a not-for-profit corporation, so communication structures and strategies for small and large non-profit and for-profit organizations may apply.

• Types of Stakeholders

  • The concept of a stakeholder is explicitly broader than a shareholder; shareholder refers to specifically to someone who owns shares (or stock) of a company, while stakeholder may be any group that may be affected by an organization.
  • High levels of customer satisfaction, of course, are likely to lead to positive business outcomes: high levels of customer satisfaction can lead to higher sales and profit margins, profits that can be re-invested in the company.
  • A stockholder, or shareholder, is an individual or institution that legally owns a share of stock in a public or private corporation.
  • Funding is the lifeblood of any venture and is especially important for smaller organizations and non-profits.
  • The type of funding depends on the type of organization; non-profits, for example, solicit donations from individuals or foundations, while some new companies may seek venture capital funding to fund growth before the company has sufficient revenues to grow on its own.

• Positive Reinforcement

  • These programs help companies capture market share, launch new products, reduce cost of sales, increase product adoption, and ultimately drive sales.
  • "Reaping the Rewards" sales incentive programs are primarily used to drive sales, reduce sales costs, increase profitability, develop new territory, and enhance margins.
  • To facilitate the creation of a profitable program, every feature of the incentive program must be tailored to the participants' interests.