Business Profile and Situation Analysis With Case Questions
Transcript of Business Profile and Situation Analysis With Case Questions
Business Profile:National Office Machines
• Manufacturers of cash registers, electronic data processing equipment, adding machines, and other small office equipment
• Domestics sales: $1.4 Billion• Foreign sales: $700 Million• Operates in United States, western Europe, the
Mideast, and some part of the Far East
Business Profile:National Office Machines Continued• In the United States, has the most aggressive
and successful sales force• Highly competitive industry• Recently entered into a joint venture with Nippon
Cash Machines
Business Profile:Nippon Cash Machines
• Old-line cash register manufacturing company organized in 1882
• Japan sales: $9 Billion yen; 15% loss from last year
• Only produces cash registers• Needs managerial leadership• High competition: Fourteen companies compete
such as IBM, NCR, Unysis, and Sweda
Situation Analysis / Decision Situation• Sales compensation plan (straight commission,
straight salary, or mix)• Sales people need strong incentives• Motivation• High Competition from fourteen companies
compete such as IBM, NCR, Unysis, and Sweda• Japanese Distribution Systems based on
reciprocity– on: favor of any kind that must be repaid
Traditional Labor-Management Relations
• Traditional labor-management relations are a problem– Lifetime employment, – Promotion through seniority– Single company unions with contracts that act like the
force of law– Dismissal only for just cause such as theft or other
major infarction– Receive many fringe benefits through the company
Traditional Sales Force
• Predominately order takers• Paid straight salary• Bonuses given semiannually• Offered extensive benefits (loans, mortgages,
discounted necessities)• Offered little incentive to surpass basic sales
quota
What should NABMC offer—incentives or straight salary?
• Incentive-based salary or Split percentage of straight salary and commission– Changing attitudes of lifetime employment by
employers and younger employees and recent grads
– Life Goals Chart
7.7 16.7 63.2 11.9 0.5
21.7 9.6 46.2 22 0.5
22.3 33.3 16.2 26.3 1.8
6.7 5.1 76 10.5 1.6
2.51.7 84.8 7.5 3.4
3.7 9.2 72.3 11.9 3
7.1 16.4 62.2 10.9 3.4
9 17.8 60.6 5.5 7.5
11.2 13.9 63.4 8.6 2.9
6.2 5.1 77.3 9.5 1.8
35.4 5.8 41.2 6.8 10.8
0% 20% 40% 60% 80% 100%
Brazil
Phillipines
India
Australia
Sweden
Switzerland
France
Germany
UK
US
Japan To get rich
To acquiresocialposition
To live as Ichoose
To work onbehalf ofsociety
No answer
How Do You Motivate Salespeople and Get Them to Compete Aggressively?
• Continue to stress and enforce traditional Japanese business values – Offer and stress the fringe benefits with the offer
of employment for life• Recognition systems• Idea of “teamwork” and the overall success of the
firm as a whole • Non cash incentives (holidays, vacation)• Set realistic and challenging goals
Program for Motivation and Compensation with Implications
• Reward programs and pay as part commissions• Challenges:
– Senior employees– Union challenges– Japan distribution system
• Solutions:– Emphasize the goals for the company with some
emphasis on individual production
New Pay System • Hybrid pay structure • Base salary at xx% with xx% commission
based on sales• Bonuses
– One based on company performance– Second based on individual performance relative to
others including seniority
Motivation and Aggressiveness in Japan
Cultural Norms• Collectivist Culture• Politeness • Harmony• Reciprocity
Motivation and Aggressiveness in Japan
Implications• Less likely to compete against each other• Less likely to be forceful and aggressively
go after the sale• Less willing to disturb or upset system of
reciprocity and “on”
Principles of Motivation in Other Countries
• Promote competition both within the firm and between the company and competitors
• Develop a sense of loyalty to the company• Be as explicit and detailed as possible when
informing employees of the payment system, and clearly and thoroughly express the benefits of such a system
• Use cultural values of specific country to help design the best methods of motivation (i.e. individualism in U.S. and collectivism in Japan)