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  • Essay / Case Study Summary: The incentives for the car dealer

    The incentives for the car dealer were the bonus he would receive from Chrysler for meeting the monthly quota. They must have sold 129 cars in October. They also had to meet individual quotas to receive a bonus, which were at least 15 cars each. This means that they will go to extreme lengths to sell their individual quota and obtain the dealer's quota. Salesmen and women sold cars to their customers well below the price they paid to the manufacturer. This was in an effort to ensure they closed the sales. If they felt they were going to lose a deal, they would talk to Freddie who would tell them to do anything to close the deal since it had been a slow month. They made no profit from these cars. In fact, they were hoping to hit the quota because the bonus would make up for the money they lost on those sales. At first it made no sense to me. The goal would be to make a profit from the cars they sell and reach the bonus quota. After listening to the entire audio file, it started to make more sense. The money they received as a bonus would “keep them out of the red.” So even though they lost money on some sales, they still made a profit. This is where these sellers actually make their money. In my opinion, sales is not an ethical activity. The goal of sales is to sell as much as possible to customers. Most salespeople work on commission, which means they have to make a lot of sales. They also have business requirements that can harm or benefit their position within the company. In order to meet these quotas, I would be lost and stressed. I am not a salesman and I know this from experience. I worked in retail. We had to meet quotas to sign people up for store credit cards. Personally, I didn't like asking people because they would get angry. The incentive wasn't enticing enough for me to want to ask people. So there were days where I asked everyone who came to my register, and there were days where I didn't ask anyone. I think it would be important to try to make a profit from every car sold every month. However, I can understand why Freddie started pushing people to do deals even if it cost them money for a car. The incentive was too good. If they lost money but met their quota, the money would be made back. I think if I were pushed to meet a quota to receive such a bonus, I would probably make the same decisions as him.