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.National Offi ce Machines?MotivatingJapanese Salespeople: Straight Salaryor Commission?CASE 4?4a bomb. Unfortunately, the problem is considerably more complexthan it appears on the surface.One of the facts to be faced by NOM management is the traditionallabor?management relations and employment systems inJapan. The roots of the system go back to Japan?s feudal era, whena serf promised a lifetime of service to his lord in exchange for alifetime of protection. By the start of Japan?s industrial revolution inthe 1880s, an unskilled worker pledged to remain with a companyall his useful life if the employer would teach him the new mechanicalarts. The tradition of spending a lifetime with a single employersurvives today mainly because most workers like it that way. Thevery foundations of Japan?s management system are based on lifetimeemployment, promotion through seniority, and single-companyunions. There is little chance of being fi red, pay raises are regular,and there is a strict order of job-protecting seniority.Japanese workers at larger companies still are protected fromoutright dismissal by union contracts and an industrial traditionthat some personnel specialists believe has the force of law. Underthis tradition, a worker can be dismissed after an initial trial periodonly for gross cause, such as theft or some other major infraction.As long as the company remains in business, the worker isn?t discharged,or even furloughed, simply because there isn?t enoughwork to be done.Besides the guarantee of employment for life, the typical Japaneseworker receives many fringe benefi ts from the company.Bank loans and mortgages are granted to lifetime employees onthe assumption that they will never lose their jobs and thereforethe ability to repay. Just how paternalistic the typical Japanese fi rmcan be is illustrated by a statement from the Japanese Ministry ofForeign Affairs that gives the example of A, a male worker who isemployed in a fairly representative company in Tokyo.To begin with, A lives in a house provided by his company,and the rent he pays is amazingly low when compared withaverage city rents. The company pays his daily trips betweenhome and factory. A?s working hours are from 9:00 a.m. to5:00 p.m. with a break for lunch, which he usually takes inthe company restaurant at a very cheap price. He often bringshome food, clothing, and other miscellaneous articles hehas bought at the company store at a discount ranging from10 percent to 30 percent below city prices. The companystore even supplies furniture, refrigerators, and television setson an installment basis, for which, if necessary, A can obtaina loan from the company almost free of interest.In case of illness, A is given free medical treatment inthe company hospital, and if his indisposition extends overa number of years, the company will continue paying almosthis full salary. The company maintains lodges at seasideor mountain resorts where A can spend the holidays or anoccasional weekend with the family at moderate prices. . . .It must also be remembered that when A reaches retirementage (usually 55) he will receive a lump-sum retirementallowance or a pension, either of which will assure him arelatively stable living for the rest of his life.National Offi ce Machines of Dayton, Ohio, manufacturer of cashregisters, electronic data processing equipment, adding machines,and other small offi ce equipment, recently entered into a jointventure with Nippon Cash Machines of Tokyo, Japan. Last year,National Offi ce Machines (NOM) had domestic sales of over $1.4billion and foreign sales of nearly $700 million. In addition to theUnited States, it operates in most of western Europe, the Mideast,and some parts of the Far East. In the past, it had no signifi cantsales or sales force in Japan, though the company was representedthere by a small trading company until a few years ago. In theUnited States, NOM is one of the leaders in the fi eld and is consideredto have one of the most successful and aggressive sales forcesfound in this highly competitive industry.Nippon Cash Machines (NCM) is an old-line cash registermanufacturing company organized in 1882. At one time, Nipponwas the major manufacturer of cash register equipment in Japan,but it has been losing ground since 1970 even though it producesperhaps the best cash register in Japan. Last year?s sales were 9 billionyen, a 15 percent decrease from sales the prior year. The factthat it produces only cash registers is one of the major problems;the merger with NOM will give it much-needed breadth in productofferings. Another hoped-for strength to be gained from the jointventure is managerial leadership, which is sorely needed.Fourteen Japanese companies have products that compete withNippon; other competitors include several foreign giants such asIBM, National Cash Register, and Unisys of the United States,and Sweda Machines of Sweden. Nippon has a small sales force of21 people, most of whom have been with the company their entireadult careers. These salespeople have been responsible for sellingto Japanese trading companies and to a few larger purchasers ofequipment.Part of the joint venture agreement included doubling the salesforce within a year, with NOM responsible for hiring and trainingthe new salespeople, who must all be young, college-trained Japanesenationals. The agreement also allowed for U.S. personnel insupervisory positions for an indeterminate period of time and forretaining the current Nippon sales force.One of the many sales management problems facing theNippon/American Business Machines Corporation (NABMC, thename of the new joint venture) was which sales compensation planto use. That is, should it follow the Japanese tradition of straightsalary and guaranteed employment with no individual incentiveprogram, or the U.S. method (very successful for NOM in theUnited States) of commissions and various incentives based onsales performance, with the ultimate threat of being fi red if salesquotas go continuously unfi lled?The immediate response to the problem might well be one ofusing the tried-and-true U.S. compensation methods, since theyhave worked so well in the United States and are perhaps the kindof changes needed and expected from U.S. management. NOMmanagement is convinced that salespeople selling its kinds ofproducts in a competitive market must have strong incentives toproduce. In fact, NOM had experimented on a limited basis in theUnited States with straight salary about ten years ago, and it was
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