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Long Case – MBA 568
Case 4-4: NOM – Motivating Japanese Salespeople
Part 1: Case Overview and Textbook Principles
This case reviews National Office Machine, a Dayton, Ohio company that is one of the leading manufacturers of cash registers, electronic data processing equipment, adding machines, and other small office equipment. Even though NOM has operations in Western Europe, Mid-East, and certain areas of Far East, NOM recently signed a Joint Venture agreement with Nippon Cash Machines of Tokyo, Japan. NOM is revered as one of the most successful companies in the very competitive field. NOM management recognizes that in order for it to maintain its competitive edge and grow its revenues, it has to be more successful in its overseas operations. After all, its foreign sales are only $700M compared to domestic of $1.4B.
JV with Nippon is strategically a good move for NOM. Nippon is said to manufacture the best cash registers in Japan and at one point was a major manufacturer. However, over the last several years, it consistently been loosing sales and share and as a result became a good candidate for this partnership. NOM will provide a greater variety of products and expertise in delivering those products to the market.
However, no JV is without its own set of challenges. In fact, this case provides a comprehensive overview of obstacles, one of which in particular may be key to how quickly this JV can become successful. As the case explains it, it has to do with a sales management problem of finding the most appropriate way to compensate its sales force while respecting cultural and corporate traditions and doubling the sales within one year. This case gives us an inside look into traditional labor-management relations and employment system in Japan. "Lifetime employment" is a widely-accepted workplace principle and foundation for Japan's management system. It guarantees work for life, promotion through seniority, and single-company...
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