Choose two questions to answer

Question 1:

Based on the table below, answer the following questions.

Table 1.1: Profitability of Screening at an Investment Bank and a Commercial Bank

	Screen?	Productivity	Salary	Screening Cost	Profit
Investment Bank	No	$110	$100	$0.0	$10.0
	Yes	193	100	2.9	90.1
Commercial Bank	No	110	100	0.0	10.0
	Yes	112	100	2.2	9.8

Which bank should do screening? Explain. Based on your answer, under what circumstances screening is more profitable?

Question 2:

Imagine that you are a partner in an investment bank in Kuala Lumpur and are deciding between two candidates to fill a position as a junior investment banker. Suppose that you have only two candidates (the risky and predictable), with the help of an illustration, explain why it is possible for your company to hire the risky candidate? Is there any other factors that are important in deciding whether to take a chance on a risky hire or not?

Question 3:

Investments in on-the-job training (OTJ) that are specific to the firm are likely to be made similarly to the investments that are purely general human capital or education. This means there is no difference between the specific and general training. Do you agree? Discuss your answer by using suitable illustration. Is there any effects of costs and benefits of investment in education?

Question 4:

Multiproduct companies often face a tension between centralization and decentralization of product design. Decentralization fosters creativity and may lead to new product lines and more interesting innovations. However, such companies often desire economies of scale in production, marketing or distribution. Companies sometimes change their structures over time to re-balance such trade-offs. A recent example is Microsoft. In 2013, CEO Steve Ballmer announced a major restructuring with greater centralization of product design. As with many technology companies, Microsoft wants to foster innovation in product design, but it is important that its products work well together and create a consistent experience for costumers. Over time, the companys design had become somewhat fragmented. Ballmers memo to employees was titled One Microsoft - single strategy as one company - not a collection of divisional strategies and that the strategy will focus on creating a family of devices and services.

Source: Baller (2013)

Based on the above statement, do you agree with Ballmers decision? Explain your answer.

Question 5

Turnover can be costly especially when the investment in employee skills is match with idiosyncratic need of the firms business. By giving relevant example, explain how to retain good employees? Under what conditions the no offer matching policy is suitable?

Only two of the questions need to be answered