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Business Profile: National Office Machines

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Business Profile: National Office Machines. Manufacturers of cash registers, electronic data processing equipment, adding machines, and other small office equipment Domestics sales: $1.4 Billion Foreign sales: $700 Million

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business profile national office machines
Business Profile:National Office Machines
  • Manufacturers of cash registers, electronic data processing equipment, adding machines, and other small office equipment
  • Domestics sales: $1.4 Billion
  • Foreign sales: $700 Million
  • Operates in United States, western Europe, the Mideast, and some part of the Far East
business profile national office machines continued
Business Profile:National Office Machines Continued
  • In the United States, has the most aggressive and successful sales force
  • Highly competitive industry
  • Recently entered into a joint venture with Nippon Cash Machines
business profile nippon cash machines
Business Profile:Nippon Cash Machines
  • Old-line cash register manufacturing company organized in 1882
  • Japan sales: $9 Billion yen; 15% loss from last year
  • Only produces cash registers
  • Needs managerial leadership
  • High competition: Fourteen companies compete such as IBM, NCR, Unysis, and Sweda
situation analysis decision situation
Situation Analysis / Decision Situation
  • Sales compensation plan (straight commission, straight salary, or mix)
  • Sales people need strong incentives
  • Motivation
  • High Competition from fourteen companies compete such as IBM, NCR, Unysis, and Sweda
  • Japanese Distribution Systems based on reciprocity
    • on: favor of any kind that must be repaid
traditional labor management relations
Traditional Labor-Management Relations
  • Traditional labor-management relations are a problem
    • Lifetime employment,
    • Promotion through seniority
    • Single company unions with contracts that act like the force of law
    • Dismissal only for just cause such as theft or other major infarction
    • Receive many fringe benefits through the company
traditional sales force
Traditional Sales Force
  • Predominately order takers
  • Paid straight salary
  • Bonuses given semiannually
  • Offered extensive benefits (loans, mortgages, discounted necessities)
  • Offered little incentive to surpass basic sales quota
what should nabmc offer incentives or straight salary
What should NABMC offer—incentives or straight salary?
  • Incentive-based salary or Split percentage of straight salary and commission
    • Changing attitudes of lifetime employment by employers and younger employees and recent grads
    • Life Goals Chart
how do you motivate salespeople and get them to compete aggressively
How Do You Motivate Salespeople and Get Them to Compete Aggressively?
  • Continue to stress and enforce traditional Japanese business values
    • Offer and stress the fringe benefits with the offer of employment for life
  • Recognition systems
  • Idea of “teamwork” and the overall success of the firm as a whole
  • Non cash incentives (holidays, vacation)
  • Set realistic and challenging goals
program for motivation and compensation with implications
Program for Motivation and Compensation with Implications
  • Reward programs and pay as part commissions
  • Challenges:
    • Senior employees
    • Union challenges
    • Japan distribution system
  • Solutions:
    • Emphasize the goals for the company with some emphasis on individual production
new pay system
New Pay System
  • Hybrid pay structure
  • Base salary at xx% with xx% commission based on sales
  • Bonuses
    • One based on company performance
    • Second based on individual performance relative to others including seniority
motivation and aggressiveness in japan
Motivation and Aggressiveness in Japan

Cultural Norms

  • Collectivist Culture
  • Politeness
  • Harmony
  • Reciprocity
motivation and aggressiveness in japan13
Motivation and Aggressiveness in Japan

Implications

  • Less likely to compete against each other
  • Less likely to be forceful and aggressively go after the sale
  • Less willing to disturb or upset system of reciprocity and “on”
principles of motivation in other countries
Principles of Motivation in Other Countries
  • Promote competition both within the firm and between the company and competitors
  • Develop a sense of loyalty to the company
  • Be as explicit and detailed as possible when informing employees of the payment system, and clearly and thoroughly express the benefits of such a system
  • Use cultural values of specific country to help design the best methods of motivation (i.e. individualism in U.S. and collectivism in Japan)