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Comparison between Hong Kong standard of living and that of home country base Sydney Case Study

The real value of international relocation proves difficult to fancy due to different economical set-ups within different regions. One of the main issues affecting international relocation is currency conversion, for example, Australian dollar is usually considered to be high hence could at times give deceptive results to immigrants.

Financial benefits still becomes one of the most considered challenges leading to high cost of living within Australia. This shows clearly that any movement within overseas jurisdiction converts into greater disposable income owing to existing vast differences.

The real financial benefits involved in the process of international move can be valued based on comparing daily living costs, rate of taxes levied within various jurisdictions as well as salaries (Australian Social Inclusion Board, 2010).

Cost of living within Australian cities such as Sydney has tremendously increased within the last ten years. This is attributed to rising inflation and high value of Aussie dollar.

Cost of living in Sydney is considered most of the times in the process of weighing destination offers since the situation in the city provides more realistic measures on spending. In such cases, cost of living indexes is considered useful since it provides accurate overview of general differences between cities (Australian Social Inclusion Board, 2010).

In Sydney, the cost of transport is considered more expensive than in Hong Kong, therefore demanding that the company reduces Alice’s travelling allowances. At the same time, public transport is more regular and efficient in Hong Kong compared to Sydney hence use of private cars not necessary. Consequently, the cost of owning and maintaining a car is lower in Sydney than in Hong Kong.

However, cost of entertainment and leisure proves difficult to quantify since it is mostly depends on an individual’s lifestyle. In the area of entertainment Hong Kong is considered leading in best arts with Sydney trailing in areas concerning night life and art.

There are numerous and credible options for those finding it easier to pay premium prices in Sydney contrary to Hong Kong where they provide wide range of choices within each price bracket of products.

The use of straightforward currency conversion will grant the company advantage in the process of calculating financial benefits granted to Alice. At the same time, several considerations have to be made on different factors for the purposes of understanding ultimate financial advantage.

Such factors include; structure of payment used for international firms, nature of value attached to tittles and promotions, differences in tax rates, discounting approaches in firms within different regions and approaches to rewards granted to employees amongst other factors.

There is high cost of housing in Hong Kong hence the company will have to provide assistance in making rent tax deductible based on reimbursement schemes. Such provisions makes individuals’ eligible to tax regulation which asserts that all costs associated with employer can be subjected to deduction.

The employers will be forced to set proper rent expense for Alice within Hong Kong since the city is recognized as highly lucrative environment suitable for such professionals. Additionally, Hong Kong city does not impose a number of tax schemes such as VAT, tax on dividends, withholding tax amongst others.

Expatriate reward approach to be used for Alice’s transfer and its advantages and disadvantages

Hong Kong is known to have favorable tax systems with charges of approximately 17% taxation on income. This is considered favorable in comparison to between 30% and 40% rates charged by APAC cities. Various reward systems could be used in this case as the basic foundation on which research done on such endeavors is based.

Rewards systems play an essential role in employees’ participation since it shapes the approach towards theory and method (Marsh & Furlong 2002, p. 17). Reward system based on performance mirrors employees view of what he/she can discern about the company.

There are two distinctions that can be deduced with respected to company’s knowledge. First, it is important for management to enrich employees with knowledge regarding the various market segments within regions of operations. Second, observation is not objective but constantly influenced by the social constructions of reality (Schmidt 1994).

The system used will have to addresses the question of how the international market operates (Marsh & Furlong 2002). Two fundamental distinctions can be made with respect to such approach. First, there is a real world that is free from our knowledge and that life is built upon these foundations.

Second, there is no real world but the world is discursively and socially constructed and therefore reliant on a particular culture (Hay 2002, p. 61). In summary, the various aspects used assume diverse positions which are depicted in different fields of employment.

It emerges from the allowances and kind of Budget Company offers that there is some level of competency expected from the employee which requires increased potential that is manifested within industry of operation. Thus, it is feasible to examine everything that occurs and comprehend it as devoid of any mediation thus denying any reality/appearance dichotomy.

It can thus be used in market research to create hypothesis that can be tested via direct observation (objectivity). Positivity typically employs quantitative techniques since they are objective and the outcomes can be generalized and replicated (Marsh & Furlong 2002, p. 19). In essence they search for explanation of behavior and not for the meaning.


It is very crucial to make governance decisions at this stage as it will be very hard to make governance decisions once the international venture is up and running. The company and employees have to agree on the employment structure and basic reward system applied and also on issues of allowances.

It is therefore critical to define various rewards based on international trade agreements. The performance of the company will be highly boosted when there is a high level of foreign participation, especially in Hong Kong.

Reasons for Alice’s reluctance

Positive reinforcement is needed for most people. For one to strive and attain a sense of accomplishment, high expectations should be set in place. When people like Alice feel sense of pride in their work, they flourish and strive to continue the pattern of success. There is need for such employees to be engaged and motivated at work place without lowering company’s principle standards in the process.

One obstacle that may arise with the high level of standards is those employees who do not achieve personal goals may feel defeated; hence poor behavior ensues to “cover-up” the fact that employees do not understand their duties within international market. A clear understanding of what success is should be communicated to every employee and they should understand that any step towards the positive is a good step.

Additionally, employees such as Alice should buy-in to their own positive contributions. They should set goals for themselves and be held accountable for fulfilling them. Observably, some employees may strive to become one of the managers while others may strive to earn more recognition.

However, if companies are not seeking and using employees’ ideas often, they are squandering an important resource for making organizations better based on first hand information. Importantly, each employee should feel pride in what he/she wishes to accomplish and ensures with the help of the company that the goal comes to fruition. One obstacle for this principle is the lack of motivation in some company organization set-up.

The lack of motivation holds employees back and they are more likely to cause discipline problems within their areas of service. By allowing employees an opportunity to voice concerns regarding education, they gain a sense of pride hence look at the future and opportunities from positive perspective.

Reward solutions recommended

It is true payment based on merit can support the company’s strategy since it is usually tied to various measures of success such as individual performance and organization’s profits.

This method enables the organization to easily direct and control employee behavior since payment is associated to predefined outcomes. Employers are able to encourage most needed behaviors that match the company’s standards from employees.

Cash Compensation

Organizations recognize individual performance through cash compensation. This kind of compensation is always given to employees as gross income. Total gross income normally include various deductions and expenses such as current wages, commissions, all forms of terminations including loans and other forms of credit incurred.

However, there are some amounts not included within expense and debt accounts such as amounts reimbursed. The amount is only considered in the event that it is valued above total employee expenses (Pope et al, 2012).

Offering Fringe Benefits

Fringe benefits are also part of compensation given to employees. However, such benefit is usually granted based on strict analysis of individual’s performances. Fringe benefits are safeguarded by code regulations provided within every government institution.

This leads to possible scenarios whereby fringe benefits can at times be excluded from the basic earnings in the event that such benefits tally below other specified requirements.

Additionally, organizations calculate fringe benefits on the basis of cost and prevailing market trends since evaluation of fringe benefits result from income equated to fair market value exceeding specified salary offered by organizations to individual employees. Such calculations are clearly provided for within provided code of regulations as indicated by the company (Moran & Leon, 2006).

Compensation through Welfare Benefits

Most established organizations provide employees with welfare benefits dealing with some aspects of human life such as health. However, welfare benefits are provided through various means including life insurance as well as self-funded projects all compensated for within final employee salaries.

Employers usually encourage employee to register for such benefits and at the same time educating them on the importance surrounding such commitments. Good example is on the issue of life insurance which comes in packages of either individual or groups. All such expenses are compensated directly from employee’s basic salary (Ben-Zion, 1994).

Deferred Compensation

Additionally, there are those referred to as deferred compensation normally given to employees depending on the nature of activity they are involved in. Such compensation is granted based on the platform of duration of time taken since establishment of the program which also determines its nature of being elective.

The whole idea is calculated from qualified plans since employee at times differ their income after they receive their full dues. The agreement is based on complete trust and beneficiaries usually not subjected to any deductions in form of taxes.

Tax is only calculated on the basis of received distributions on annuities and not on overall contributions. This kind of compensation as tax-sheltered annuity is only possible in highly established organizations (Moran & Leon, 2006).

In the case where communication is paramount, incentives are used for the benefit of the company. This is since employee participation can easily improve whenever they are motivated through rewards. The company should adjust their rewards mechanism based on employee-employer discussions on pay-related decisions.

This is since it is easier for such employers to realize and recognize hands-on knowledge applied by various employees and which can be utilized for organization improvement (Gowen, and Jennings, 1991).

Such level of cooperation existing between employer and employees enables excellent provision of services hence enhancing high performance levels. Applying cooperation principles enables existence of mutual understanding amongst employees making them have eagerness to participate.

There is need for the company to consider employees in their profit sharing-plan within payment system. However, payment based on merit is considered more directly linked to employee performance as opposed to profit sharing plan which considers employees as a group hence easily promotes laziness.

Paul can utilize such strategy for the purposes of increasing Alice’s commitment towards achieving organizational goals within Hong Kong market. At the same time, utilization of balanced scorecard would enable the company to consolidate various performance measures towards organizational goals. Such moves usually results into appropriate utilization of employees within their respective areas of operation.

However, company’s strategy can easily be differentiated through use of customized balanced scorecards (Gerhart and Milkovich, 1990). Additionally, the company can consider including Alice in their stock incentive plan. Research reveals that stock ownership plan motivates employees since it creates sense of belonging and ownership within the company (Gerhart and Milkovich, 1990).

For the purposes of investigating various business practices of the company within Hong Kong, it is necessary to consult sources such as corporate reports, trade association papers, any academic writing on them (which is very little) and news articles. The objective here is to try to discover what aspects of the business have made them successful.

This is not necessarily in contrast to for-profit enterprises, as it is imagined that many business practices in a particular sector (retail, public banking) will be similar across the whole sector. Also, another key point to investigate is whether or not the mutual have innovated or led the field in the development or employment of any unique business practices.

At the same time, customer attraction and retention of businesses within Hong Kong requires investigation. Such considerations can be drawn from international publications or sources such as articles from retail publications and company reports which are likely to contain the most comprehensive and accurate counts.

Understanding how these businesses have either retained or attracted new customers is going to be an important key as well. It may be the case that some of the customer cases within Hong Kong could be attributed to factors beyond the control of the social enterprise.

For example, the recent spike in applications to the Co-Operative Bank follows a public campaign to switch accounts away from the major High Street brands (whose reputations are seen as tarnished) and into co-operatives and building societies (Szulanski,1996).

There is need to consider effects of recession and its impacts on businesses, so as to determine whether or not their success is inherent to their social enterprise business model, or whether it is relative to the successes (and misfortunes) of other companies within the sector. This is important for the purposes of establishing a trend capable of their business practices and eventually success.

For example, if the company has posted record profits, but nearly all other major retailers’ profits are down, that suggests something unique to the company during recession.

However, if company’s profits are down, though perhaps not to the same extent as similar competitors, that suggests an even decline in profits or customer numbers across the sector. This will call for further investigations on various data across every sector (Telser, 1980).

Investigating public perceptions on the company’s products and services is also important. This is particularly important in providing solution to consumer purchasing power based on taste. Public responses towards such foreign companies play a role in their success within international market.

This is particularly true if social enterprises are given a ‘free pass’ in public consciousness, and seen merely as a synecdoche of social enterprises as a whole, or whether impressions about the brand’s image and quality are in fact affected by each brand’s strengths and weaknesses.


Australian Social Inclusion Board 2010, Social inclusion in Australia: How Australia is faring, Commonwealth of Australia, Canberra

Ben-Zion, U 1994, Recent Literature on the Impact of Taxation and Inflation on Interest Rates. In Vito Tanzi, ed., ‘Taxation, Inflation, and Interest Rates,’ International Monetary Fund, Washington

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Gavin, N 1998, Generalization, reliability and validity in media research, Leicester University Press, London

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Gowen, C & Jennings, S1991, “The Effects of Changes in Participation and Group Size on Gainsharing Success: A Case Study,’ Journal of Organizational Behavior Management , Vol.1, No. 11, pp 147–69

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Pope, T, Anderson, K & Kramer, J 2012, ‘Prentice Hall’s Federal Taxation,’ Prentice Hall, Upper Saddle River

Szulanski, G 1996, ‘Exploring internal stickiness: Impediments to the transfer of best practice within the firm’, Strategic Management Journal, vol. 17 no. 1, pp. 27-43.

Telser, G 1980, ‘A theory of self-enforcing agreements’, Journal of Business, vol. 53 no. 1, pp. 27-44.

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1. IvyPanda. "Comparison between Hong Kong standard of living and that of home country base Sydney." June 10, 2019. https://ivypanda.com/essays/comparison-between-hong-kong-standard-of-living-and-that-of-home-country-base-sydney/.


IvyPanda. "Comparison between Hong Kong standard of living and that of home country base Sydney." June 10, 2019. https://ivypanda.com/essays/comparison-between-hong-kong-standard-of-living-and-that-of-home-country-base-sydney/.


IvyPanda. 2019. "Comparison between Hong Kong standard of living and that of home country base Sydney." June 10, 2019. https://ivypanda.com/essays/comparison-between-hong-kong-standard-of-living-and-that-of-home-country-base-sydney/.


IvyPanda. (2019) 'Comparison between Hong Kong standard of living and that of home country base Sydney'. 10 June.

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