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Sl Business and Management Internal Assessment - Is a Suitable Decision for Imporbarsa S.A to Motivate Employees in Order to Increase Sales Revenue?

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SL Business and Management Internal Assessment, IBO

Is a suitable decision for Imporbarsa S.A to motivate employees in order to increase sales revenue?

Student Name Candidate Number

Nicolás Barros Chiriboga 004269-0006

Word Count: 1489

Session: November 2015

Is a suitable decision for Imporbarsa S.A to motivate employees in order to increase sales revenue?

Introduction

Imporbarsa S.A is a private limited company established in 1995 in Guayaquil, Ecuador with the aim of providing ironmongery and agricultural tools to its customers with its store in Daule Avenue (Imporbarsa S.A, 2015), and operations in the provinces of that country: Los Rios, El Oro, Manabí, and part of the Pichincha province since customers from those places call to the company to request for its products (Sup. Doc. 3). Since 2013, the company had been experiencing decreasing sales revenue. Therefore, the purpose of this commentary is to analyze if by increasing the morale and satisfaction of the personnel the company can increase its sales revenue.

In order to achieve the goal previously mentioned, different sources might be used such as an interview with the CEO, a survey to the employees of the company, a report about their salary, the monthly sales revenue report from the last two years, and a mail of a customer complaint about the attention provided by the employees. Those sources may allow to substantiate the information presented and the issue of the firm. In addition, Business & Management course’s textbook would also be utilized. The theory of motivation of Taylor, of Herzberg, and an investment appraisal technique: the payback period would be used in the analysis of the problem that the company had been facing.

Findings and analysis

The company was established with the mission of being a leader in the market of agricultural and ironmongery tools. For that reason, through the years that follow 1995, each time it had been expanding its product mix as it allows a firm to sell to a larger customer base (“Customer base”, 2015) and, in that way, it had boosted its sales revenue (Sup. Doc. 3). However, as it had been mentioned previously, sales revenue has been decreasing since 2013 (Sup. Doc. 2).

Imporbarsa has storage, sales, and accounting department (Sup. Doc. 5). The workforce from the storage and sales department dedicates to come face to face with clients because the employees from the sales department look into the system for the product that the client who goes to the branch request

for, and ask a the personnel from the storage department to see that product right away for that customer (“Customer”, 2015). In addition, the staff from the sales department handle the orders that customers place through their calls and request a worker from the storage department to put the product on the truck that would deliver it (Sup. Doc. 3). Based on customers complaints, the personnel from those departments does not deliver good customer service as it do not treat them with respect and have too wait too much time to receive their product (Sup. Doc. 4).

A survey to the personnel carried out by Imporbarsa was look through (Sup. Doc. 1), so it was clear its demotivation, and that it considers that the salary received is not fair. Therefore, it may be used the theory of motivation of Taylor since he “assumed that employees are primarily motivated by setting output and efficiency targets related to pay”(Hoang, P., 2011, p. 237). The firm should increase the salary of each employee for about 10% because it may not have a significant impact on the cash flow position of the company as it is not a high percentage, and also it is not too low, so the staff would release that it had obtained a financial reward.

Besides, there is an economic recession on Ecuador (Orozco, M; 2015) since due to the decrease of the petroleum price, the Gross Domestic Product had reduced from 4,1% to 1,9% (“Ecuador baja crecimiento”, 2015) and hence the government in order to deal with that issue should raise the taxes leading to people not be able to meet their expenses. For instance, it had raised from 5% to 45% the taxes for one-third of imported goods. (“Ecuador aumentará impuestos a importaciones”, 2015). Therefore, the personnel may carry out its tasks appropriately because a higher salary allows it to obtain a more economically stable household.

With the purpose of examine how much time is needed to repay the initial cost of the investment in motivating financially the employees, a payback period should be made (“Payback period”, 2015). The amount spent per month would be $196.31, and it should be made for two years since the staff usually last for that time at the company, and after that time, with a new workforce, the firm has the opportunity to stop having that outflow

60 % of the salary of Employees

Total salary of the employees

Amount that may be raised (10%)

$228.00

$380.00

$38.00

$217.97

$363.28

$36.33

$216.84

$361.40

$36.14

$215.06

$358.43

$35.84

$300.00

$500.00

$50.00

Total amount that may be raised = $196.31

$196.31 x 24 months = 4,711. 44

If the investment generates

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