$9-197-085$

REV, AEGUST $31,2017$

EORERT SHMONS

ANTONTO DAVILA

Compagnie du Froid, S$.$A$.$

Jacques Trumen, CBO and major shareholder of Compagnie du Froid, S$.$A$.,$ was reviewing the performance of the three regions of the business: France, Italy, and Spain. Evaluating the performance of the regional vice$-$presidents was not a task that he enjoyed. Jacques had traditionally given each regional manager the same bonus: $2\%$ of corporate profits. Jacques believed that this system avoided arbitrary evaluation criteria and excouraged open and fruitful communication among the regions about new ways of doing business.

The results in $2009$ challenged the fairness of this evaluation system. The performance of the Spanish Egion had been extremely poor and had driven the company's overall probis to their lowest level in $10$ years Jacques thought that it was unfair to have the French and Italian managers pay for the problems of somebody else. But he was nod sure how much Andres Molas, the manager of the Spanish division, was to blame for Spain's poor results.

Compagnie du Froid, S$.$A$.$

Founded in $1985$ by Jacques Trumen's father, Compagnie du Froid, S$.$A$.$ had grown steadily over the years to be a major competitor in the summer ice cream business. It had a dominant position in the coastal tourist areas from Perpignan to Nice and Monaco, the region where it was founded. In $2007,$ Jacques took over the business and re$-$directed the company into an aggressive growth strategy. By $2009,$ the company was a market leader in the eastern part of France, the northeastern coast of Spain, and northern lialy. Jacques kept a watchful eye on the efforts of the three regional managers to expand the operations to other key tourist areas in their regions, but his attention was mainly devoled to the creation of a new bosiness a year$-$round ice cream operation bused in Paris

facques believed very much in decentralizing decision muking as much as possible. Each region had its own manufacturing marketing distribution, and sales organzation Regional managers chose distinctive names for new products, the level and mix of advertising, and local suppliers. The central office maintained responsiblity for the accounting and financial aspects of the business, development of new products in ice creams and "specialtise" categories, and the sharing of experiences and learning across the regions.