Toyota Motor Sales
Assignment Questions:
1. Evaluate TMS’s system of measuring, evaluating, and rewarding the performances of the regional general managers. Be sure to identify the key issues related to managerial authority and financial responsibility.
TMS’s system of measuring, evaluating, and rewarding the performances of the regional general managers was, as they called it, “tiered”. They started the rewards at the top, the general managers, and allowed them to allocate the rewards throughout their salesmen based on sales, and when the sales occurred. With TMS being the largest seller of import cars and trucks in the United States (with sales over one million), they were evaluated based on the number of promotional vehicles they could sell in each quarter. Their bonus’ reflected sales for the year, the managers that sold more earned almost 25% of their salary, where those who didn’t sell as well earned approximately two thirds that amount.
TMS made sure to make the managers primary focus on their goal of growth in the US market and long term commitment to customers. They didn’t want them to focus on finance, marketing, human resources, or point-of-entry operations. They wanted to make sure their managers were creating a realistic sales target and reaching it each quarter. They wanted their focus to be on making the company money and selling as many cars and truck as possible.
When Al Wagner came in and began evaluating the managers, he evaluated them in terms of four primary criteria: total unit sales, market penetration, customer satisfaction, and dealer profit. He didn’t rank the regions’ performances against each other; instead he would rate them in comparison to their own regions history.
2. Should TMS implement the proposal for change? If so, who should take the lead in bringing about the change, and what should be the process and timing for change? If not, why not?
TMS should implement the proposal for change. It should be each of the regional general
1. Evaluate TMS’s system of measuring, evaluating, and rewarding the performances of the regional general managers. Be sure to identify the key issues related to managerial authority and financial responsibility.
TMS’s system of measuring, evaluating, and rewarding the performances of the regional general managers was, as they called it, “tiered”. They started the rewards at the top, the general managers, and allowed them to allocate the rewards throughout their salesmen based on sales, and when the sales occurred. With TMS being the largest seller of import cars and trucks in the United States (with sales over one million), they were evaluated based on the number of promotional vehicles they could sell in each quarter. Their bonus’ reflected sales for the year, the managers that sold more earned almost 25% of their salary, where those who didn’t sell as well earned approximately two thirds that amount.
TMS made sure to make the managers primary focus on their goal of growth in the US market and long term commitment to customers. They didn’t want them to focus on finance, marketing, human resources, or point-of-entry operations. They wanted to make sure their managers were creating a realistic sales target and reaching it each quarter. They wanted their focus to be on making the company money and selling as many cars and truck as possible.
When Al Wagner came in and began evaluating the managers, he evaluated them in terms of four primary criteria: total unit sales, market penetration, customer satisfaction, and dealer profit. He didn’t rank the regions’ performances against each other; instead he would rate them in comparison to their own regions history.
2. Should TMS implement the proposal for change? If so, who should take the lead in bringing about the change, and what should be the process and timing for change? If not, why not?
TMS should implement the proposal for change. It should be each of the regional general