Arck Systems Case Study Essay

1996 Words Jan 30th, 2014 8 Pages
Arck Systems Case Study

Introduction
This paper will discuss how an optimal sales system should be implemented by Arck Systems through analyzing the changes incorporated by Bryan Mynor for the recently acquired Lux Software’s sales force’s compensation plan. We will begin with an overview of the major issues Arck Systems faced when assessing how the company should modify the plan. An examination of Arck Systems and Lux Software Inc.’s current compensation plans as well as the benefits and disadvantages of making changes to those compensation plans will then be introduced. Next, our recommendation for Arck Systems to create one unified compensation plan for both sales forces will be discussed, stressing the
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His first change was to increase management’s oversight of discounted sales which resulted in an overburdened sales management team. Mynor’s second change was to drastically alter the incentive system. In comparison, seventy percent of the sales department would receive increased compensation but the top performers would receive reduced commissions. This change resulted in a majority of the sales department leaving the company, regardless of their current performance status.
Analysis of Mynor’s Actions
The main purpose of a sales incentive plan is to drive sales and generate growth for a business. As the EVP of Worldwide Sales, it was Mynor’s responsibility to ensure the sales plan is appropriate and effective. We do not endorse Mynor’s decision to immediately eliminate almost all of the plan’s accelerators after Lamar Snow inappropriately discounted and divided a $9.4 million sale into 47 pieces to avoid management’s scrutiny and earn more commission. Instead, Mynor should have rescinded Snow’s excess commission for that deal, citing the inappropriate way it was obtained, to send a message throughout the organization that this manipulation would not be tolerated. This would have resulted in the sales force understanding the company has zero tolerance for similar shenanigans and lowered the chances of facing similar schemes in the future. Instead, the entire sales force felt punished and underappreciated for the illicit

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