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grigory [225]
3 years ago
12

Two successful firms are observed with quite different compensation plans for their salespeople. One firm pays its salespeople o

n a commission basis, whereas the other firm pays its salespeople fixed salaries. Do you think that one of the two companies is making a mistake? Explain.
Business
2 answers:
cricket20 [7]3 years ago
5 0

Answer:

Salary and Commission compensation benefit has its pros and cons. However, The Company that adopts Salary Compensation benefit might be making a mistake.

Explanation:

If you pay salesmen a straight salary, some may have limited motivation to exceed basic expectations. However, commission based remuneration is pro performance in that drive salesmen to set more aggressive goals, work through obstacles and rejection to meet their target for a particular period.

Businesses that pay fixed salaries incur higher overhead costs because you have to pay whether you are making profits or not. But the case is different in Commission based compensation benefit where the risk is shared and commission is only paid when money is made.

jasenka [17]3 years ago
5 0

Answer:The firm who pays on fixed salary is making a mistake.

Explanation: A compensation plan this is the total package which shows details of an employee's salary, wage, terms of payment, and benefits. They also includes comission and bonuses to be paid to employees.

Both firms have different compensation plans, for their ‘salesperson’. firm A would benefit more from paying a commission to their employees because this means they would only have to pay the employee if there is a sale ( or for job done.). This cancels the need to pay employee's for work which does not result in sales. Unlike Firm B who operates on a fixed salaries which translates to having to pay employee's salary even when they are not productive.

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8 0
1 year ago
Assume that you are a high-level manager for a shoe manufacturer. You know that your firm could increase its profit margin by pr
Vesnalui [34]

Answer:

The issue here is that you need to balance your company's profits and possible negative due to bad press.

On one side (the good and righteous side), if you do not produce shoes in Asia, your long term survival economic is doubtful, but people view your company as a company that does the right thing no matter what. Will it increase sales? Theoretically it should, but in practice it doesn't. Are Nike sales hurt because each shoe is produced in an Asian country that pays $0.25 per day? No, they aren't. The same applies to Reebok, Adidas, Puma, New Balance and every single major shoe manufacturer in the world. Bad press hurt tuna back in the 80's, but some companies are not affected by it.

The alternative (the evil, dark side of the force side) results in your company being able to survive on the long term. It will not necessarily mean that your company will grow and become the world's largest shoe manufacturer, but you will be able to survive and continue to operate.

There is also a trick that you can use to avoid reputational damage and bad press, and that is to establish a foreign subsidiary in Indonesia using a different name. Then your foreign subsidiary sells you the manufactured goods, and the blame fall son the subsidiary. Believe it or not, that simple solution is used by most corporations including clothing manufacturers, electronics, toys, etc.

If you analyze this from an ethical point of view, the alternative is much simpler. Producing in Indonesia (or India, or Burma, or Pakistan, or Vietnam, etc.) and paying a $100 salary will allow a family to live a very decent life and probably even prosper. They will have a much better lifestyle than the rest of their neighborhood. Each Indonesian worker represents one less poor family in Indonesia. On the other hand, American families will probably get hurt, but it is also much easier for an American worker to get another job that pays a normal wage (in US standards) and allows them to live well.

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vekshin1

Answer:

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