Incentives Essay

Sultan Molla

MGMT-325

Thursday, December 15, 2011



Incentives

Incentives are a major factor to consider when you are responsible for a business. Incentives can greatly affect an organization in many ways, and the type of organization determines what incentives are most suitable.   These incentives are not standardized; they depend greatly on the region and location. For example each region has laws and benefits for businesses, so what might work for one company might not necessarily work for the other.   These organizations make decisions based on the location that offers the best incentives for the business the organization engages in.



There are two different types of incentives for businesses tangible and intangible incentives. Tangible incentives are typically Material incentives; monetary currency or it’s equivalent. Material incentives would typically be more desirable to any organization to any organization that seeks profit as its major goal. The second type of incentives is divided into two kinds. The first, Soldiary these are incentives that help an organization gain status or sociability. For example, voluntary organizations are organizations that require volunteers that do not seek tangible incentives, such as social clubs where people gather for social events. The second, purposive incentives, which are also intangible, are rewards related to organizational goals (achieving the goal is the reward) For example, an election campaign.

The types of incentives that organizations will pursue depend on what the organizational goals are. For example, a financial institution would most likely want to obtain material incentives, while an election campaign would go after more goals oriented purposive incentives.



Furthermore, we must also learn about the different types of organizations as this plays a role in determining which incentives are the best fit for the type of organization. There are three types of organizations. First,...