The incentives for the car dealership was the bonus they would receive from Chrysler for meeting the monthly quota. They had to sell 129 cars in October. They also had to meet individual quotas to receive a bonus, which were at least 15 cars each. This means they will go to extreme lengths to sell their individual quota and to make the dealership quota. The salesmen and women were selling cars to customers well below the price they paid the manufacturer for them. This was in an effort to make sure they closed the sales. If they felt they were going to lose out on a deal they would speak with Freddie who would tell them to do anything to make the sale since the month had been slow. They were not making a profit off of these cars. They were actually
They hoped to make the quota because the bonus would make up for the money they lost on these sales.
At first, this didn’t make sense to me. The whole point would be to make a profit off the cars they sale and meet the quota for the bonus. After listening to the whole audio case, it started to make more sense. The money they received as a bonus would “keep them out of the red”. So, even though they were losing money on certain sales, they were still making a profit. This is where these sales people actually make their money.
In my opinion, sales isn’t an ethical business. The point in sales is to sell as much as you can to customers. Most sales people work for commission, which means they need to make many sales. They also have sales requirements that can hinder or benefit their position within the company. In order to meet these quotas
I would be lost and stressed. I’m not a salesperson and I know this from experience. I’ve worked in retail. We had quotas we had to meet on signing people up for store credit cards. Personally, I didn’t like to ask people because they would get angry. The incentive wasn’t enticing enough for me to want to ask people. So, there would be days when I would ask everyone who came to my register, and there were days when I didn’t ask anybody. I would think it would be important to try to make some profit off of each car sold every month. However, I can see why Freddie started pushing people to close deals even if it cost them money on a car. The incentive was too good. If they lost money, but met their quota then the money would be made up. I think if I were pushed to meet a quota to receive a bonus like that, I would probably make the same decisions he
When doing an evaluation of any case, you should always look at all the relevant facts and issues involved before jumping to conclusions. As for this case, Mike Thurmond, the operator of Top Quality Auto Sales, a used car dealership, has financed his dealerships inventory of vehicles by creating a financing arrangement with Indianapolis Car Exchange (ICE). ICE then filed a financing statement that listed Top Quality’s inventory as collateral for the financing. After this, Top Quality sold a Ford truck to Bonnie Chrisman, who was also a used car dealer. Chrisman paid Top Quality for the truck and then proceeded to sell it Randall and Christina Alderson, who paid Chrisman for the vehicle. In
Another misleading portion of car commercials is the financial explanation is: “$49 down or $0 down with no interest for 6 months” (Spitzer, 2003). Sounds great doesn’t it? Well, this is where many college students are tricked because they never tell you about the tax, title, and registration fees that are included at the time of your purchase.
A deal with these sales representatives seems like a good idea, they’re experienced and have most likely been doing this for a while. But not only is it illegal, it is strongly against my better judgment. This case is greatly related “value judgment”. It clearly demonstrates an unethical value judgement for me to participate in this deal. It is highly illegal, and wrong for me to steal from my
In 1929 when the stock market crashed they lost a lot of money and had to
Importance of ethics in the business world is superlative and global. New trends and issues arise on a daily basis which may create an important burden to organizations and end consumers. Nowadays, the need for proper ethical behavior within
Chapter 7, another intercalary chapter critiques yet another part of the business system. The owners of the car dealerships mean solely to exploit impoverished buyers. They do not profit from selling cars that will last, but rather from finding the most ill-used vehicle, giving it the appearance of reliability, and pawning it off on desperate farmers wishing to get to California. There is no compassion in the car sales, but rather a perpetual cycle of exploitation. This indicates what the Joad family must certainly have experienced to get their car to go west, yet places it in a larger context. The chapter makes it clear that they are not the only family to experience this.
This means the other way in which Sports direct can extrinsically motivate their workers is through either extrinsic rewards; “valued outcomes or benefits provided by others, such as promotion, pay increases…” (Huczynski & Buchanan, 2013, 306) or punishment for lack of work. This was shown in the “pick rates” scheme mentioned, if workers did not meet set targets a series of times in a row they would lose their job. The more commonly used method of motivation is the opposite of this; extrinsic rewards. This maintains both worker satisfaction as well as motivating workers to increase output and efficiency. However, whilst this method of motivation maintains both, it is more costly for the business; due to paying extra bonuses, and is not as effective as punishment. This is because not all workers will want to work harder to earn bonuses. Some may be content with their current output and wage, whereas all workers will be forcefully motivated if their employer threatens to fire them for low
...useless car to a junk yard to recover some loss, but the difference of the re-sale of the junk-car would be a significant loss. Though there were no adequate assurances to the contract, anticipatory repudiation is the only probable remedy for Jack. However, the outcome would weigh on the predominant factor test, which is met because Tom is covered as a merchant because he is operating in his usual daily business, and Jack is the buyer. The sole purpose of the contract was for Tom to sell Jack a car, and for Jack to buy a car from Tom. The UCC, though less stringent than the statute of frauds, does effectively regulate commercial transfers allowing the free market to operate without diminishing the integrity of trade.
If Moyer would sell the car without trade in, she will have to deduct about 8% from the list price, which makes the sales to $13,248.
American automobile industry has striven through the years with excellence and great dominance both in America and in the global market. The history of it global dominance could be attributed to many factors which include global acceptance of American cars and brand superiority. However, American automobile industry has not strived without major challenges that include: political, global competition, technological, economical, and environmental challenges.
As in any other discipline that entails interaction with individuals, the aspect of ethics must include a conscious principle. To define ethics in its simplest form, it is known as the ability to distinguish right from wrong. In the movie, the sudden pressure from management drives the company’s salesmen to increase sales with no regards to ethics in order to maintain job security. All of the main characters had made their fair share of unethical decisions, out of desperation, to increase their sales and ultimately to keep their jobs. The degree of each decision can be left for viewers to determine the level of appropriateness based on their own values. Personally, although all characters have made unethical decisions, the most ethical salesman was Ricky Roma. Ri...
Randall recently finished graduate school with an M.A. in advertising and works at a major agency in account services. His job requires him to work as an assistant account executive for a client that is introducing a new sports car. His responsibility would be to drive the new sports car for six months while selling the car and hand out supplementary materials to whomever was interested in the car. Randall would not be able to tell the individuals that the car was not his and this promotion seemed deceptive to him.
Sia’s maximum that he would be willing to pay, is $12,000 and Mike’s minimum he would be willing to accept is $10,000. An agreement, if one is reached, will create $2,000 in integrative value compared with no deal, because Sia one-sidedly values the car $2,000 more than does Mike. How that $2,000 is divided between them whether, let 's say, the price agreed to is $10,000, $11,000, or $12,000 is a matter of distributive negotiating: any gain for Sia means pain for Mike, and the other way around. It’s, therefore, fair to describe this as generation of $2,000 in distributive value, distributed in accordance with distributive negotiating skills. On the other hand, what if Mike is an exceptional mechanic and enjoys spelunking in his spare time. Sia, conversely, can’t fix anything, and he hates having to take his car to unfamiliar mechanic shops since he fears that they will take advantage of him. These details propose that more integrative value might be created by the sale of the car if Mike will guarantee to repair any item that breaks for 9 months after the transaction. Let’s assume, for example, that this would cause Sia’s maximum price to increase to $12,500, while Mike minimum price would increase only to $10,200. Any deal that incorporated the repair agreement would be collaborative because it would generate more integrative value than the parties could achieve through the sale of the car alone. The additional $300 can be explained as the value that can be created by the negotiators’ integrative negotiating skills. “In addition, positive emotions make the parties less contentious and more optimistic about the future, which, in turn, increases the chances they will search for multiple alternatives and find a better integrative—win–win—agreement.
The sales incentive plan was a critical part of G.E.’s sales force plan. Each salesman had a portion of his earnings dependent on his performance with respect to quota as well as Barr being awarded a bonus based on the sales performance of his district.
Which concepts from the chapter explain why Porsche sold so many lower-priced models in the 1970s and 1980s? (5 marks)