Case Fred recently became a manager at a local hardware store that employs six managers and 55 nonmanagement employees. As new, larger chains such as Home Depot come to the area, the owner is concerned about losing many of his customers because he cannot compete on the basis of price. The management team met and discussed its strategic response. The team determined that the hardware store would focus on particular items and make personalized service the cornerstone of its effort. Freds responsibility was to train all nonmanagement employees in good customer relations skills; for that he was given a budget of $70,000. Over that past six months, Fred received a number of training brochures from outside organizations. One of the brochures boasted, Three-day workshop, $35,000. We will come in and train all your employees (maximum of 50 per session) so that any customer who comes to your store once will come again. Another said, one day seminar on customer service skills. The best in the country. Only $8,000 (maximum participants 70). A third said, customer satisfaction guaranteed on our customer satisfaction training for sales clerks. Three-day workshop, $25,000. Maximum participants 25 to allow for individual help. Fred liked the third one because it provided personalized training. He called the company to talk about its offering. The consultant said that by keeping the number small, he would be able to provide actual work simulations for each of the trainees. He also indicated that he would tailor the simulations to reflect the hardware store. Fred noted that they would need two sessions and asked the consultant if he could take a few more per session to accommodate the 55 employees. The consultant agreed. The training went ahead, and the cost was under budget by $20,000.

Do you agree with Fred's decision to conduct the training and use the third vendor? Using concepts from the chapter, explain your answer.