Jim Howard is a sales manager at a software company that produces a search interface for databases with indexed information. The company is an established vendor and has a good reputation in the market for its high-quality products, fast and personal customer support, and strong loyalty to its customers. Part of the values statement of the company includes, “We will treat our customers with respect and dignity.” 

In his first year with the company, Jim noticed that the sales force was having difficulty acquiring new customers and retaining existing ones. The problem was complex: a shrinking market with continuously increasing buying power, increasing competition, and the emergence of free alternatives from the Internet. These problems started to significantly affect the company’s revenue. The company’s reaction was to drastically decrease the cost of its products, bundle databases into packages, and start to alter product introductions by including several value-added services that were new to the market. 

Jim’s boss suggested that Jim take over the responsibility for the yearly renewals of customer subscriptions from the company’s secretary, which previously had been regarded as an easy clerical procedure. When he started to check the old accounts and follow up with renewals, he faced a problem that he thought would never have occurred: unfair treatment of old customers in comparison to new customers in terms of the product pricing. Existing customers were offered renewal at triple the price of the same package offered to new customers. 

When he asked his boss whether he should inform the old customers that the price had changed and whether the old customers could now benefit from the lowered price, the answer was, “Why don’t we try to get this price? If the customer refuses to pay it, then we’ll negotiate.” An additional difficulty was that, in the last few months, information had been disseminated to all customers that made the company’s new pricing strategy visible to customers. Jim shared the fact with his boss that this information was already available to customers and pointed out the contradiction. His boss remained insistent, to the point of shouting, that Jim follow his previous instructions with the sales force.

Jim felt he was betraying the company, the customer, his sales force, and his own professional values. He didn’t want to lose his job, and he didn’t want to lose any more customer accounts.

Questions

1. If you were Jim, what would you do in this situation?

2. What are the issues here? For whom?

3. Who stands to be hurt the most from following the advice of Jim’s boss?

4. What would a values-based stakeholder management approach suggest that you do, if you were Jim? Lay out an action plan and be ready to role-play your suggested approach.

5. Compare your answer to question 1 to your approach in question 4. Any differences? If so, could you still follow what you said in question 4?