Case Study 4-7: National Office Machines-Motivating Japanese Salespeople: Straight Salary or Commission? Anthony DiSantoProf. ElamMultination Marketing 3/31/05 The main issue in case study 4-7 focuses on what the Japan company Nippon Cash Machines and their recent US merger National Office Machines should do to their Japanese sales force who has always followed a salary based payment plan and lifetime job security because they are quickly loosing market share in a highly competitive market. Therefore, the main statement for the case is as follows: Should a merged company such as who Nippon/American Business Machines Corporation, who is facing strong competition and loosing market share, change the Japan sales force payment plan and go against traditional Japan values in order to remain competitive in their market? I think that NABMC should definitely begin to change their sales force payment plan. If NABMC can initiate change within their company, and do it quickly and effectively, it will make the company that much more competitive against other companies in the same market. This also may be the company's only choice now because they have lost so much market share.
By implementing a sales plan where part of the payment comes from salary and some comes from commission, then it will increase incentive for creating and sustaining sales and become a catalyst for NABMC to begin to regain lost market share in the Japanese market. I believe that NABMC should initiate a half salary / half commission incentive payment plan. This will allow the company to see increased incentives for sales, however will also allow the staff to get used to the idea that they will not be paid for ineffective work. By initiating the half / half sales plan the company will see increased sales and the employees still will have payment security just not as much as they are used to. If the company cannot use incentives then I would create a company wide policy in the Japan branch of NABMC to increase market share and begin a strong aggressive sales approach. I would also stray away from highlighting what an individual does but focus on how well the group is doing.
Things such as a sales quota chart where it is visible to all employees to see will help get the sales force motivated. The main idea is not to focus individual accomplishments but create a scenario where the employees have strong feelings to see the company that they work for succeed, and in return the employees succeed as well; something along the lines of "Pride for your company." Moving on, to create a payment system that would work to satisfy old sales people, new sales people, and other employees I would base all compensation on how well the company did the previous quarter. This now makes it a group task to be efficient and profitable. For example, an employee would have a floating salary where if the company did very badly the employee would have a very low salary, however, if the company did very well then consequently the employee would also do well. The terms of "doing well" and "doing poorly" would have to be planned out by management however the basic idea will still remain firm. This will also satisfy most Japanese values where they tend to focus on the group instead of the individual.
In America many people value money, self-progression, and individual praise. Japan is quite different as so many motivational tactics might not work. Things that promote individual gain may have a counter effect with the Japanese sales force. Therefore, other motivations and incentives need to focus on the collective progressing and furthering the company.
This also rings true in many other cultures where the act of motivation hinders on what the culture values. Since every culture values different things, each motivational campaign needs to take into consideration what the employees will value and create an incentive / motivation plan accordingly. In conclusion, the ability to adapt and change has been proven to be one of the number one characteristics of long lasting and successful companies, even if it means to go against the country's culture. Therefore, if NCM and NABMC want to regain market share in Japan they need to change their old ways of motivating, promoting, and job security, and begin to adapt to a new view of compensation within the workplace.