William George is the marketing manager at the Crunchy Cookie Company. Each quarter, he is responsible for submitting a sales forecast to be used in the formulation of the company's master budget. George consistently understates the sales forecast because, as he puts it, “I am reprimanded if actual sales are less than I've projected, and I look like a hero if actual sales exceed my projections.” 1. What would you do if you were the marketing manager at the Crunchy Cookie Company? Would you also understate sales projections? Defend your answer. If I were the marketing manager at Crunchy Cookie Company; I would not intentionally understate the quarterly sales forecast. Understating the sales forecast is only going to not going to allow the companyAs this is not going to help the company in exceeding 2. What measures might be taken by the company to discourage the manipulation of sales forecasts? Measures that might be taken to discourage the use of manipulation of sales forecasts
If I were the marketing manager I would not intentionally understate the sales projection. This sets a bad precedent that will likely result in lower than possible sales results. The marketing manager should set reasonable stretch goals for sales expectations and tie each sales person’s yearly compensation to these goals. To discourage manipulation of the sales forecasts, the targets should increase year over year to drive performance up incrementally, depending on internal and external factors. Performance should be increasing and not become stagnant.
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