1. Business Profile: National Office Machines
Manufacturers of cash registers, electronic data processing equipment, adding machines, and other small office equipment
Domestics sales: $1.4 Billion
Foreign sales: $700 Million
Operates in United States, western Europe, the Mideast, and some part of the Far East

2. Business Profile: National Office Machines Continued
In the United States, has the most aggressive and successful sales force
Highly competitive industry
Recently entered into a joint venture with Nippon Cash Machines

3. Business Profile: Nippon Cash Machines
Old-line cash register manufacturing company organized in 1882
Japan sales: $9 Billion yen; 15% loss from last year
Only produces cash registers
Needs managerial leadership
High competition: Fourteen companies compete such as IBM, NCR, Unysis, and Sweda

4. Situation Analysis / Decision Situation
Sales compensation plan (straight commission, straight salary, or mix)
Sales people need strong incentives
Motivation
High Competition from fourteen companies compete such as IBM, NCR, Unysis, and Sweda
Japanese Distribution Systems based on reciprocity
on: favor of any kind that must be repaid

5. Traditional Labor-Management Relations
Traditional labor-management relations are a problem
Lifetime employment,
Promotion through seniority
Single company unions with contracts that act like the force of law
Dismissal only for just cause such as theft or other major infarction
Receive many fringe benefits through the company

6. Traditional Sales Force
Predominately order takers
Paid straight salary
Bonuses given semiannually
Offered extensive benefits (loans, mortgages, discounted necessities)
Offered little incentive to surpass basic sales quota

7. What should NABMC offer— incentives or straight salary?
Incentive-based salary or Split percentage of straight salary and commission
Changing attitudes of lifetime employment by employers and younger employees and recent grads
Life Goals Chart

9. How Do You Motivate Salespeople and Get Them to Compete Aggressively?
Continue to stress and enforce traditional Japanese business values
Offer and stress the fringe benefits with the offer of employment for life
Recognition systems
Idea of “teamwork” and the overall success of the firm as a whole
Non cash incentives (holidays, vacation)
Set realistic and challenging goals

10. Program for Motivation and Compensation with Implications
Reward programs and pay as part commissions
Challenges:
Senior employees
Union challenges
Japan distribution system
Solutions:
Emphasize the goals for the company with some emphasis on individual production

11. New Pay System Hybrid pay structure
Base salary at xx% with xx% commission based on sales
Bonuses
One based on company performance
Second based on individual performance relative to others including seniority

12. Motivation and Aggressiveness in Japan
Cultural Norms
Collectivist Culture
Politeness
Harmony
Reciprocity

13. Motivation and Aggressiveness in Japan
Implications
Less likely to compete against each other
Less likely to be forceful and aggressively go after the sale
Less willing to disturb or upset system of reciprocity and “on”

14. Principles of Motivation in Other Countries
Promote competition both within the firm and between the company and competitors
Develop a sense of loyalty to the company
Be as explicit and detailed as possible when informing employees of the payment system, and clearly and thoroughly express the benefits of such a system
Use cultural values of specific country to help design the best methods of motivation (i.e. individualism in U.S. and collectivism in Japan)