Case Study 4-7:
National Office Machines-Motivating Japanese Salespeople: Straight Salary or Commission?
The main issue in case study 4-7 focuses on what the Japan company Nippon Cash Machines and their recent US merger National Office Machines should do to their Japanese sales force who has always followed a salary based payment plan and lifetime job security because they are quickly losing market share in a highly competitive market. Therefore, the main statement for the case is as follows:
Should a merged company such as who Nippon/American Business Machines Corporation, who is facing strong competition and losing market share, change the Japan sales force payment plan and go against traditional Japan values in order to remain competitive in their market?
I think that NABMC should definitely begin to change their sales force payment plan. If NABMC can initiate change within their company, and do it quickly and effectively, it will make the company that much more competitive against other companies in the same market. This also may be the company's only choice now because they have lost so much market share. By implementing a sales plan where part of the payment comes from salary and some comes from commission, then it will increase incentive for creating and sustaining sales and become a catalyst for NABMC to begin to regain lost market share in the Japanese market. I believe that NABMC should initiate a half salary/half commission incentive payment plan. This will allow the company to see increased incentives for sales, however will also allow the staff to get used to the idea that they will not be paid for ineffective work. By initiating the half/half sales plan the company will see increased sales and the employees still will have payment security just not as much as they are used to. If the company cannot use incentives then I would create a company wide policy in the Japan...
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