Company Back Ground And A Description Of The Company

Company Back Ground and A Description of the Company Fayaque is the largest retail chain of electronic products in Taiwan. Fayaque can be traced to Fanc which was found by French. In 2003, Shin Kong Mitsukoshi (SKM) took over Fanc electronic store and changed the name from Fanc to Fayaque (About Us, n.d., para. 1). It is because Fanc opened electronic stores in Taiwan and it could not earn normal profit; thus it got out of business and sold its branch, that is located in Taiwan, to SKM. In other word, marginal costs exceeded marginal benefits, so it had to either shut down the stores or sell the stores to others. Otherwise, they would lose more money (Brickley Smith Zimmerman, 2016, p. 18). SKM’s founder appointed his son as CEO in†¦show more content†¦Therefore, sometimes they are not helpful for employees. Fayaque has three slogans that are â€Å"Good Life, Wonderful New Things, and Find Fun Everyday† (About Us, n.d., para. 2). Fayaque has a strong corporate culture and its goals focus on the quality of service and sales. Furthermore, Fayaque pays attention to employees’ skill. For instance, it requires every employee to remember any information that electronic products have. Every Monday lower level employees have to take a small quiz before leaving the workplace. The small quiz would be about the information of new electronic products. Moreover, store managers sometimes have a centralized training approach and decentralized training approach. Generally, every six months store managers have a training lesson for a week in the headquarter which is located in Taipei. Agency Problem The CEO of Fayaque grants decision management to the store managers and decision control to the floor supervisors. Once company uses decentralized decision system, incentive conflicts within firm are more likely to be appeared. Subsequently, once incentive conflicts appear, firm should use reward system and performance evaluation system in order to reduce incentive conflicts. Similarly, agency problem is like the CEO of Fayaque as an agent to grant his managers as a principal to do some special tasks. Therefore, it might have some incentive conflicts between