Sales Management

Case Study
Selection of a Branch Manager
Krishna Kumar, General Manager (Marketing) of SM
Equipment Ltd., was in deep thought. He wanted to resolve the issue about the
appointment of a branch manager for an important branch of Mumbai. The first
point was whether to promote one of the experienced sales engineers with
managerial ability from within the company, or to recruit a suitable candidate from
outside. If he decides to promote someone from within the company, then question
arises whom to select. SM Equipment Company is a small-scale manufacturing
company in private sector, manufacturing material handling equipment at Hosur in
Tamil Nadu. Seventy percent of the company’s sales of `100 million (about USD 1.5
million) came from specially designed and customized material handling
equipment.
The balance 30 percent sales were contributed by the standard products. Since the
product is technical in nature, the company has been recruiting engineers in sales
positions. Sales engineers are required to prepare quotations with technical
specifications and negotiate techno-commercial issues with business buyers. Only
in case of complex material handling projects, sales engineers asked for assistance
from design engineers.
The requirement of a branch manager at Mumbai had become necessary due to
removal of the agent (i.e. manufacturer’s representative). This was due to the
agent’s consistently poor performance in terms of sales, market share, and
customer service (both pre-and post-sales). The Mumbai agent was given adequate
time to improve the performance. However, when business customers from Mumbai
started complaining bitterly about the service provided by the agent, the company
had no other alternative but to give three months’ notice for termination. This was
done as per the agreement between the company and the agent.
Krishna Kumar had only three months not only for getting a branch manager, but
also for recruiting five sales and service engineers each, with adequate number of
support staff. In addition, he had to finalize a suitable and centrally located office
place. Mumbai is known to have a high business potential with large number of
factories and warehouses, where SM Equipment’s products are required. Krishna
Kumar planned to release a recruitment advertisement in a leading newspaper,
indicating the requirements of a branch manager, sales and service engineers, and
office support staff. He thought of keeping the options open for selecting the branch
manager from outside or within the company. After reviewing the files of the five
senior sales engineers from Chennai, Bengaluru and Hyderabad branches, he
shortlisted two persons –Pradeep Dasgupta and S. Nagaraj. Pradeep had done
graduation in engineering and also had completed postgraduate diploma in
business management from a leading management institute. He has been working
with SM Equipment for the past six years. Pradeep initially worked as a sales
trainee for one year and thereafter, as sales engineer for three years. Due to his
good performance in achieving the sales targets, he was promoted as senior sales
engineer two years ago. Pradeep is strong technically, but weak on people skills.

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Although he had completed a management program, his managerial abilities have
not been tested so far. The other shortlisted person is Nagaraj, who had also
obtained an engineering degree. Nagaraj has been with the company for eight years
and like Pradeep, he also joined the company as a sales trainee. Nagaraj’s
performance has been very good, having exceeded the sales targets consistently.
After working as sales engineer for three years, he was promoted as senior sales
engineer. His human relations with customers as well as office colleagues have
been good. His managerial skills are not known. Both Pradeep and Nagaraj have
been loyal to the company. Krishna Kumar felt that they can be trusted to manage
Mumbai branch, which is far away from the marketing head – office at Bengaluru
and the factory at Hosur. He wondered whether he can trust a person who is
recruited based on the newspaper advertisement, without knowing the person for a
sufficient duration of time. Krishna Kumar, therefore, decides to consult his
Managing Director soon. The selection of the branch manager position for Mumbai
branch is critical and he has only three-month time to commence Mumbai branch
operations.

Discussion Questions
1. Should the company select the branch manager for
Mumbai from within or outside the organization? Discuss
the advantages and disadvantages of these options. Justify
your answer.
2. If the decision is to select the branch manager from
within, whom would you select? What are the selection
criteria for the position?