In 1992 the state of California charged Sears Auto Centers with overcharging customers for unneeded or unperformed repairs. Sears agreed to a settlement that could cost as much as $20 million. Sears had compensated its salespeople with commissions based on total sales. Following the settlement, Sears dropped the commissions and went to a straight salary. Sears recently indicated that it is planning to reinstate commissions for salespeople in their Auto Centers. It even plans on paying commissions for selling customers brake jobs and wheel alignments. These two products were the core of the 1992 scandal. Sears says that it has taken steps to prevent a recurrence of past problems. In particular, the decision right to recommend repairs is granted to mechanics that are paid a straight salary. Sales consultants are paid commissions for selling repair services but are not authorized to recommend repairs. Under the old system that caused problems, these individuals diagnosed repair problems and sold the corresponding service to customers. Why do you think Sears wants to reinstall commissions for its salespeople? Do you think that the new safeguard that separates diagnosing problems from selling services will prevent a recurrence of past problems? Explain.
Answer to relevant QuestionsWhat are two ways that break -even analysis can be used?How does creating a budget for your personal life or professional life, help?You hear someone comment that any inventory is a sign of waste. Do you agree or disagree? Can managers simultaneously justify holding inventories and still seek out ways to lower inventory levels?1. Who are the most powerful people/units in your organization?2. Why? What is the basis of their power?One can think about cultural diversity in many ways. How, in your opinion, should an American organizations approach cultural diversity issues?
Post your question