Give a summary of the below case ,find the main issue and explain what it is then give a recommendation in 30 words then analysis. how Situation:is it customer, company\/cost, culture.condition(economic\/political), collaborator\/competitor. Recommendation: strategy, tactics and analysis:does your recommendation address the problems you identified in situation? additional information that is important for the reader to better understand your recommendation and take action.
\nNational Offi ce Machines\u2014Motivating
\nJapanese Salespeople: Straight Salary
\nor Commission?
\nCASE 4?4
\na bomb. Unfortunately, the problem is considerably more complex
\nthan it appears on the surface.
\nOne of the facts to be faced by NOM management is the traditional
\nlabor\u2013management relations and employment systems in
\nJapan. The roots of the system go back to Japan\u2019s feudal era, when
\na serf promised a lifetime of service to his lord in exchange for a
\nlifetime of protection. By the start of Japan\u2019s industrial revolution in
\nthe 1880s, an unskilled worker pledged to remain with a company
\nall his useful life if the employer would teach him the new mechanical
\narts. The tradition of spending a lifetime with a single employer
\nsurvives today mainly because most workers like it that way. The
\nvery foundations of Japan\u2019s management system are based on lifetime
\nemployment, promotion through seniority, and single-company
\nunions. There is little chance of being fi red, pay raises are regular,
\nand there is a strict order of job-protecting seniority.
\nJapanese workers at larger companies still are protected from
\noutright dismissal by union contracts and an industrial tradition
\nthat some personnel specialists believe has the force of law. Under
\nthis tradition, a worker can be dismissed after an initial trial period
\nonly for gross cause, such as theft or some other major infraction.
\nAs long as the company remains in business, the worker isn\u2019t discharged,
\nor even furloughed, simply because there isn\u2019t enough
\nwork to be done.
\nBesides the guarantee of employment for life, the typical Japanese
\nworker receives many fringe benefi ts from the company.
\nBank loans and mortgages are granted to lifetime employees on
\nthe assumption that they will never lose their jobs and therefore
\nthe ability to repay. Just how paternalistic the typical Japanese fi rm
\ncan be is illustrated by a statement from the Japanese Ministry of
\nForeign Affairs that gives the example of A, a male worker who is
\nemployed in a fairly representative company in Tokyo.
\nTo begin with, A lives in a house provided by his company,
\nand the rent he pays is amazingly low when compared with
\naverage city rents. The company pays his daily trips between
\nhome and factory. A\u2019s working hours are from 9:00 a.m. to
\n5:00 p.m. with a break for lunch, which he usually takes in
\nthe company restaurant at a very cheap price. He often brings
\nhome food, clothing, and other miscellaneous articles he
\nhas bought at the company store at a discount ranging from
\n10 percent to 30 percent below city prices. The company
\nstore even supplies furniture, refrigerators, and television sets
\non an installment basis, for which, if necessary, A can obtain
\na loan from the company almost free of interest.
\nIn case of illness, A is given free medical treatment in
\nthe company hospital, and if his indisposition extends over
\na number of years, the company will continue paying almost
\nhis full salary. The company maintains lodges at seaside
\nor mountain resorts where A can spend the holidays or an
\noccasional weekend with the family at moderate prices. . . .
\nIt must also be remembered that when A reaches retirement
\nage (usually 55) he will receive a lump-sum retirement
\nallowance or a pension, either of which will assure him a
\nrelatively stable living for the rest of his life.
\nNational Offi ce Machines of Dayton, Ohio, manufacturer of cash
\nregisters, electronic data processing equipment, adding machines,
\nand other small offi ce equipment, recently entered into a joint
\nventure with Nippon Cash Machines of Tokyo, Japan. Last year,
\nNational Offi ce Machines (NOM) had domestic sales of over $1.4
\nbillion and foreign sales of nearly $700 million. In addition to the
\nUnited States, it operates in most of western Europe, the Mideast,
\nand some parts of the Far East. In the past, it had no signifi cant
\nsales or sales force in Japan, though the company was represented
\nthere by a small trading company until a few years ago. In the
\nUnited States, NOM is one of the leaders in the fi eld and is considered
\nto have one of the most successful and aggressive sales forces
\nfound in this highly competitive industry.
\nNippon Cash Machines (NCM) is an old-line cash register
\nmanufacturing company organized in 1882. At one time, Nippon
\nwas the major manufacturer of cash register equipment in Japan,
\nbut it has been losing ground since 1970 even though it produces
\nperhaps the best cash register in Japan. Last year\u2019s sales were 9 billion
\nyen, a 15 percent decrease from sales the prior year. The fact
\nthat it produces only cash registers is one of the major problems;
\nthe merger with NOM will give it much-needed breadth in product
\nofferings. Another hoped-for strength to be gained from the joint
\nventure is managerial leadership, which is sorely needed.
\nFourteen Japanese companies have products that compete with
\nNippon; other competitors include several foreign giants such as
\nIBM, National Cash Register, and Unisys of the United States,
\nand Sweda Machines of Sweden. Nippon has a small sales force of
\n21 people, most of whom have been with the company their entire
\nadult careers. These salespeople have been responsible for selling
\nto Japanese trading companies and to a few larger purchasers of
\nequipment.
\nPart of the joint venture agreement included doubling the sales
\nforce within a year, with NOM responsible for hiring and training
\nthe new salespeople, who must all be young, college-trained Japanese
\nnationals. The agreement also allowed for U.S. personnel in
\nsupervisory positions for an indeterminate period of time and for
\nretaining the current Nippon sales force.
\nOne of the many sales management problems facing the
\nNippon\/American Business Machines Corporation (NABMC, the
\nname of the new joint venture) was which sales compensation plan
\nto use. That is, should it follow the Japanese tradition of straight
\nsalary and guaranteed employment with no individual incentive
\nprogram, or the U.S. method (very successful for NOM in the
\nUnited States) of commissions and various incentives based on
\nsales performance, with the ultimate threat of being fi red if sales
\nquotas go continuously unfi lled?
\nThe immediate response to the problem might well be one of
\nusing the tried-and-true U.S. compensation methods, since they
\nhave worked so well in the United States and are perhaps the kind
\nof changes needed and expected from U.S. management. NOM
\nmanagement is convinced that salespeople selling its kinds of
\nproducts in a competitive market must have strong incentives to
\nproduce. In fact, NOM had experimented on a limited basis in the
\nUnited States with straight salary about ten years ago, and it was<\/p>\n
<\/p>\n
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