Toyota case study
TMS had, as they called themselves, a “tiered” system when it came to measuring, evaluating, and rewarding performances of the regional GM’s. Their system rewarded the general managers and allowed them to give rewards to the salesmen who made the best sales and on when the sales happened. TMS made sure to make the managers focus to make a growth in the US market and make a long term commitment to customers instead of focusing on their finance, marketing, human resources or point of entry operations. They just wanted their managers to sale as many cars and trucks they can so that the company makes a good profit. Al Wagner tended to evaluate the GMs in terms of four primary criteria and these were total unit sales, market penetration, and customer satisfaction and dealer profit. He didn’t like that they were ranking the regions performances against each other instead he preferred to rate the managers as compared with their own regions history.
2. In my opinion they should implement the proposal for change. The managers should take the lead to bring the changes and make sure that every region GM has the knowledge to do a god job and to make good sales and profit. The more decentralization they have the more better it would be because then they can solve the problems easier as we could read in the text book. The implantation of the new proposal should start at the beginning of a new year. Or else it might interrupt the business in the middle of the year. They can start by using it in some of the regions and then if it works good on all of them.
Answers to the questions
1a). Hardwood inc should sell 200 tables in order to break even. The break-even point is the level of sales at which revenue equals expenses and net income is zero 400000-200000-120000=80000 And then 80000/400=200 tables
b) The dollar amount would be 240 000 by using the contribution margin method 400000/200000=0,5 and then 120000/0,5 = 240000)))))))))))...