CASE 8 KRUGER- MONTINI MANFACTURING COMPANY

The management of kruger- Montini Manufacturing Company had just entered a new fiscal year and was rethinking its specific policies and general position on transfer of sale representatives. The decision was the responsibility of sales manager. Founded many years earlier, this well establish corporation was a medium sized manufactured of several related industrial products in rather wide use. The majority of customer was manufactured. For quite a few years Kruger-Montini did not do its own personal selling. Striating about 20 years ago, it gradually phased out various intermediaries and manufactures agents. After about 5 year of difficult transition, Kruger Montini relied strictly on sales representatives who were on the company payroll and who worked for no one else. Kruger- Montini was not truly national in coverage in its early years but become so 9 year ago when it added 5 sales representatives in 1 year and relocated 13. The size of the sales force had increased as the company grew and prospered and had now reached 38. The sales manager had found it necessary to divide his organization into four geographical regions because of span- of control difficulties as Kruger- Montini grew. Because the product line was fairly narrow, it was decided that geography, not type of product, would be the best basic for the organization structure. Thus each sales representative sold all products. A contributing reason for deciding against product specialization as the basic for organizing selling efforts was that it would have resulted necessarily in a large geographical territory for each employee to cover. That would have meant his being away from home overnight much more than under the policy adopted. The present Sale Manager, Henry Roses, estimated that the average person on his sales forces spent six nights a month away from his home. This figure was a little lower, he know, for people in the highly industrialized and densely populated areas of the Northeast; The Michigan, Ohio, Indiana, Illinois, Wisconsin region in the Middle West; and parts of California. The figure was a little higher for his people in all other areas. Rosas estimated that the difference was about five versus eight nights per month. During the past few years the company had noticed a sizeable number of its customer relocated to the Sun Belt and many customers open branch Factories in those milder climate area of nation. The demand for KrugerMontinis products was slowly becoming more evenly spread across the country, and this trend was expected to continue. Rosas had been with the organization about three year. He had been successful salesman with one company and then assistant sale manager with another company before becoming with Kruger Montini. He had a good personality and was well liked by the sales representatives. The company had always used a salary plus commission pay plan. For the average representative commission proved 25 percent of compensation.

Kruger-Montini manufactured nine products, two of which had been introduced only in past three years. Prior to that three year period there had been no new product introductions for a great many years. It appeared highly probable that Kruger-Montini world introduced two new products, closely related to new product line, and delete one during the next two years. EXHIBIT 1 Data on sales Force of Kruger- Montini Manufacturing Company Size of Sales Force Latest year 2 year ago 3 year ago 4 year ago 5 year ago 6 year ago 7 year ago 8 year ago 9 year ago 10 year ago 11 year ago 12 year ago 38 37 37 36 35 34 32 32 31 26 25 24 Number Transferred 6 7 7 7 7 9 9 12 13 10 10 11 Mean Distance Transferred [miles] 798 872 682 1122 1254 1360 597 1070 793 1035 640 510

During the most recent fiscal year Kruger- Montini had transferred six sales representatives to different territories. In four year previous to that, the company had transferred seven each year. Each was moved because of company need and / or the assigning of better territories to deserving sales representatives. See Exhibit 1 for earlier years and additional data on size of sales force and average distances people were transferred . The mean distance of relocation at Kruger- Montini had shown a downward trend for several years. Every person on the sales force had moved at least once. The longest time in one place anyone at the present sales force had experienced with Kruger- Montini was seven years. Rosas was tentatively thinking about moving from five to seven members of the sales force later this year. The management did not know much about the geographical preferences of its sales representatives or their family life. Rosas could not legally inquires systematically about whether the spouses were also employee and weather that work was professional and managerial, which might make one less willing to move. Dual careers made it difficult for couple to handle relocation well and some probably would not consider at all. Hovered, Rosas and his four regional sales manager had been trying recently to make observations and record fact and inference about these matters for the entire sale representative. Three of the sale representatives were young, unmarried men who seemed to mobile and flexible. Three middle age men were divorced, and I was widower. The remaining 31 were all married. It appeared that 20 of them had working spouses and that 15 of these women had professional or managerial careers. Rosas also began to understand that most non-working married woman developed communities ties and that moving for them would also be difficult and unsettling .Unwritten understating of personal at

Kruger Montini had been that turning down and transferred would be Suicidal at minimum, such a rejection would classified person as an aggressive and ambition. The Us culture for many year had perceived frequent transfers as evidence of fast track career progress, Staying mobile was a Badge of Foreign As business newspaper and magazine usually describe it No one of the Kruger Montini sales force ever declined transferred until two year ago, as far as Rosas would determine. The sale manager and other head manager personal had been surprised and perplex when Chales Hopkins, very satisfactory employees had declined moved from small, pleasant South Eastern city to merge more lucrative territory of Untied States. Age 37 and native of upper middle west Hopkins explained that he lines Kruger Montini wanted to continue working for company but did not want to moved. His wife was Business manager in another company, and had 13 year age daughter in school. The cost to reallocated sales representative had been rising quite rapidly. The most recently transferred person was Alex Kendall, A man with wife and three children. It cost Kruger Montini Dollar 30,880 to move the family approximately 2900 miles from one post to another. Although the company was any more generous than typical American company. Of this amount Dollar 11475 was to ship household goods. Dollar 11475 was for pre moving housing search. And Dollar 3680 was for one extra month of this man average compensation in Lieu Of an incidental expenses. Final Travelled and temporary living expenses counted for another dollar 4550. The remaining cost had to do with company subside on the sales of couple house and purchased of replacing house. The management of Kruger Montini was beginning to notes the financial impact of moving cost from company. Kruger Montini also recognized that a transferred sales representative required several months to get his work productivity back to normal. The recovery of productivity was much more difficult for people who worked with public and who needed to understand the characteristics of market then for other type of worker. Sale representatives also needed time to establish report to regular client. One managerial colleague whom Rosas respected was outspoken about the Issued of Moving . Burt Carn, who manager another department at Kruger Montini had been with company about 12 year believed that if employee were permitted to put down roots in the community they would loses there sense of corporate identity . The loyalties to geographical community would overcome loyalties to the Corporation. He stated that perhaps this hardens unconscious motivation of Kruger Montini in past years. Another colleague Robert Mason mentioned that nice compromise that might be to confine transferred to regions in which sales representative was already living. For exp, the 10 sales representative in 11 North Eastern state would be transferred only that regions. Mason noted each region had some lifestyle characteristics that set it apart from others. He was inexperienced manager and had been with company for nine years.