Span of control, general and specific knowledge, performance measures Barnett’s is a boutique clothing store serving high–income customers. The store has two departments: women’s and men’s.
Each salesperson receives a base salary plus commissions on net sales (sales to customers less returns)
and has the authority to resolve customer problems including:
• Returning or exchanging merchandise
• Holding sale merchandise for individual customers
REQUIRED:
• A. To be effective, do the salespeople require general knowledge, specific knowledge, or both?
• B. What are the pros and cons of giving salespeople the authority to resolve customer problems?
• C. Does each sales associate seem to have a wide, moderate, or narrow span of control? Discuss.
• D. Suppose the store owner is considering adopting a bonus plan. Discuss the advantages and disadvantages of each of the following measures as a basis for salesperson bonuses:
1. Total store sales
2. Department sales
3. Store gross margin
4. Department gross margin
5. Store earnings before interest and taxes (EBIT)
