This memo is in response to the company’s decrease in sales and profit because of the current state of the economy. The company will be executing more cost-effective measures because of this present situation. These new procedures will begin immediately with approval from the company owners. The first change will be a reduction in the monetary incentives for the sales department. To be successful in implementing this change a complete understanding of the sales process is mandatory.
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Consumer and salespeople feedback will be instrumental in gathering the data necessary to make a concise and informed decision on the best way to reduce the incentives for every party involved. The first step in the decision-making process is determining the facts of the situation at hand (Hartman & DesJardins, 2011, p. 47). The facts are that the company is losing income because of the economy. Additionally known is the company profits are on the finished product that meets the need of the consumer.
A written survey will ascertain what the specific needs and wants of the consumer toward a particular product are. Once the feedback is analyzed, the products most in demand by the consumer will continue with production, whereas the products in less demand will begin interruption until the sales or the demand from the consumer are in need. This step will aid in cutting costs for products with unnecessary production.
As an example, there was a significant increase in sales the first few years, opposed to last year’s sales that decreased substantially for the products not in demand. By investigating and discovering products in demand will aid in painting a clearer picture, thus assisting in cutting production cost that will get the company back in line with increasing sales and profits. Additionally, investigating and discovering will keep the plan of reducing monetary incentives for the sales force until sales and profits are on the increase again.
However, the plan is to once again start issuing monetary incentives to the sales force once the company starts again seeing an increase in sales and profits. Forthis plan to be successful it will be necessary to motivate the sales force with tools to set achievable goals relating to increasing company sales and profits. This also has a direct impact on the sales force pertaining to the company’s organization and management.
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Upper management as well asthe owners of the company has to be on the same accord concerning aiding the sales department in reaching their goals by providing motivation and support to the sales department. A strong support system is imperative if the sales team along with the organization is to reach their primary objectives. This plan will also include evaluations on the progress of the sales department pertaining to reaching their goals. The second and final change will be implementing a month-long layoff for some of the production employees.
Laying-off production workers for a month will cut production costs of producing products unnecessary for the economy. While keeping in mind that this layoff will also have an adverse result on producing products in demand. Instead of laying off production workers, the more cost-effective way would be to keep them at work to help meet the current demand for products. The workers still working with the organization will receive more overtime, and this is not cost-effective because the result is increasing payroll for employees.
Although removing monetary incentives for the sales department and laying-off a portion of the production department is legal, it does nothing for morale. Ethically there will be some repercussions to implementing these changes. Some of the repercussions may include employees leaving the organization and a decline in sales means possible bankruptcy. Implementing a more amicable plan will have a more positive influence that will promote a higher morale and happiness. With a higher morale, this will more likely promote a boost in productivity.See More on Decision making, Ethics