Leadership Challenge: A Quota By Any Other Name, assignment help

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Leadership Challenge: A Quota By Any Other Name

Ralph Dickerson knew an adjustment was needed. In more
than 20 years with Bright Right Plastics, he had been around for many changes,
and as director of sales for the company, he had initiated a number on his own.
Now Ralph knew that he had to reevaluate the quota system that had been used at
Bright Right for more than 15 years.

The system had been revised years ago to focus the sales
force on financial goals, specifically sales volume. At the time, business was
slow and senior management had wanted salespeople to drive sales for the
company. It had worked as the company prospered and was now enjoying great
success. Selling to large hardware stores, the company had built a reputation
as a good supplier of quality plastic fittings and joints in the retail
plumbing industry. At the same time, many aspects of the business environment
had changed since the quota system was last revised. Most notably, foreign
competitors had come in offering competitive prices and better service. Several
of Bright Right’s old competitors had been driven out of business, and Ralph
knew that part of the problem was the quota system in place at the company.

Essentially, the system in place was based on sales
volume. As it had evolved the system focused on unit sales. It involved a
complex plan that allowed each salesperson to set unit sales goals for every
product in the company’s large inventory. Senior management considered quotas a
critical element in their strategic planning. At the same time, they were used
as motivational tools for the sales force. Each overall quota was set high, but
within that the salesperson could develop individual product quotas based on
his or her customer’s needs.

The problem, as Ralph saw it, was that customers wanted
greater coordination and support from their suppliers. Specifically, customers
like Home Depot and Lowe’s wanted salespeople to offer product demonstrations
to their own sales force as well as help in arranging displays for the
products. Ralph had heard complaints that Bright Right salespeople were less
interested in doing these kinds of activities than salespeople from other
companies. Unfortunately, he had heard these complaints for several years and
was concerned they might be losing business, or soon would be.

He sat is his office pondering his next move. The CEO of
the company had set up a meeting for tomorrow to discuss this issue and was
looking to Ralph for answers
(Johnston & Marshall, 2013). 

Questions:

1. 
What are the advantages and disadvantages
of a sales volume–based quota system?

2. 
What are the advantages and disadvantages
of an activity-based quota system?

3. 
What quota system would you recommend Ralph
present to the CEO and why? What challenges would Ralph face in implementing
your recommendation?

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