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Vaughn Manufacturing Company

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Liz Hammond

on 15 November 2012

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Transcript of Vaughn Manufacturing Company

Problems with the Vaughn Manufacturing Case Solutions Vaughn Manufacturing Sales Performance Case Molly Corrigan, Josh Campbell, & Liz Hammond Keith Horton What is a Crankshaft? Style: aggressive, insulting,
results oriented, manager,
little guidance Raul Sajak Style: friendly, people skills, passionate, intelligent, excelled in automotive retail, sensitive 26-year company veteran Team consistently has highest
in sales volume for Vaughn New employee at Vaughn Married and preparing for baby Raul's Internal Environment Unapproachable, distant management The Industry Perceived role conflict and role ambiguity Philosophies Horton promotes External Environment Vaughn is a producer and supplier that sells directly to original equipment manufacturers (OEMS) Competitive industry Difficult customers Legal contract negotiation differences between supplier and customers

Vaughn has Tier 1 status but also has little leverage in negotiations Low valence for Horton's reward's Keith Horton: I don't get it. Raul's compensated on a 100 percent commission basis, so he has the incentive to sell more and make a great deal of money. I even offer free tickets to local professional sporting events....when my salespeople meet or exceed sales goals. If he works as long as I have, he can be promoted to sales manager, too. " " Low motivation Horton needs to change his management style Horton needs to be replaced Implement more extensive and ongoing training Raul needs to change to a different industry or position Adjust the compensation and rewards system Confusion and disengagement Conflicting Styles Discouragement Detroit territory is largest and most important for Vaughn District Sales Manager of Detroit territory Establish each individual's role perception at Vaughn Confused- success in the past
Raul's family an impediment
Company approach, not an industry approach External and Internal Problems Horton's Internal Environment Different Nature
of B2B vs B2C
Industries: Decreased performance Recommended
Course of Action Horton very unlikely to change his decades-old methods
He would not be "believable" if he unwillingly conformed to new methods
Horton has made himself obsolete and unemployable BOTTOM LINE: 1 2 3 4 5 6 Enables Vaughn to switch to relationship-based selling approach
Would still be able to retain a valued and senior member of the company Raul's selling style is not compatible with this "cut throat" industry
Current incentive structure does not motivate Raul or fit his life stage The company The market
The product
The customer The customer's customer Vaughn Manufacturing needs to adapt to the changing Crankshaft industry. HOW? Would reduce role conflict and ambiguity with the sales role
Communicate various role partner's expectations
Develop accurate perceptions based on those expectations
Convert accurate perceptions into appropriate behaviors Receiving a base salary in addition to commission would provide stability for sales team
A low salary that will provide some security, but leave high motivation for commission earnings
Offer incentives that would drive Raul towards better performance
More in line with Raul's current values and life stage Multiple solutions are necessary
for Vaughn's future success: Employees need more training in regards to: Implement training through:
Formalized classroom training
On the Job training Vaughn needs to implement more extensive and ongoing training The sales manager must establish accurate role perceptions of his sales team The compensation and rewards system must be adjusted Vaughn needs to replace Horton Horton has not kept up with the times
His aggressive and transactional sales methods do not establish value for customers
Vaughn could effectively implement training and relationship focused selling with new manager
Sales team would have a leader instead of a manager Will enable Raul and sales team to fulfill expectations of both the company and the customers Will eliminate inaccurate role perceptions, role conflict, and role ambiguity Putting It All Together Salary with commission is more relationship selling based than straight commission compensation plans
A low salary that will provide some security, but leave high motivation for commission earnings The issues with Raul and Horton have brought to light problems that Vaughn needed to address throughout the entire company. The automobile and crankshaft industry will remain extremely competitive establishing value through relationships is how Vaughn can set itself apart. The combination of solutions will improve the sales force and prepare Vaughn for a successful future in a changing industry. Questions? *A more technical product and much larger accounts *A more complex decision making process involving many more people Raul's B2B position with
Vaughn involves... *Broader managerial decisions *Less interaction with the end user Role Ambiguity Role Conflict * Horton does not provide support
and feedback
* Raul uncertain of expectations * Boundary Position (Contract Negotiations)
* Not enough information/training
* Who does he ask for help?
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