Reference no: EM132193556

Part A: Diversified Industry Supply recently announced a new performance incentive program for the upcoming year. The program provides significant monetary bonuses to each of the company’s 12 regional sales organizations based on the percentage which their individual region’s actual sales revenues exceed budgeted revenues for the year. As the sales manager for the Southwest Region, Katy Cook is highly competitive and determined to win the incentive for her region. Although the Southwest Region has potential for exceptional growth in the coming year, Katy and her sales team are considering a plan to better assure the region will win the incentive bonus. This plan would establish a sales budget for the next year which understates forecasted sales in a way that will make the region’s year-end sales revenues look significantly better than budgeted and provide her team with a better chance of winning the competition.

What do you think Katy should do? Why?

Part B: Faith Distributors is a leading wholesaler of religious themed gift items and books. Committed to their faith-based business principles, the company does not allow alcoholic beverages to be used in any of its business activities. This includes marketing conferences and trade shows and even extends to its sales personnel entertaining customers. Royce Richards, sales manager for the Western Region, is discussing the success of sale-person Tim Johnson in gaining a significant opening order from a major buying group along with commitments for the coming year. During their discussion, Tim mentions that, as the result of dinner meetings with the group’s regional buyers where they ordered beers and cocktails with their dinner, he is personally out just over $800 because of the company’s policy. Tim asks Royce if he could add extra mileage—over and beyond what he actually travels—to his next month’s expense report that would add up to what he is out of pocket for the unreimbursed drinks.

What do you think Royce should do? Why?