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3. I do not think that Infosys' "holistic" compensation system is an appropriate means of motivation for sales people. That compensation system is designed for software engineers and other programmers. If you consider the hierarchy of human needs, sales people are driven by two particular types of needs -- one is money (status) and the other is achievement. The emotional aspect is intended to meet social needs, but the majority of sales people are individualists, as evidenced by their being drawn into a field where individual achievement is paramount. The average sales person is not attracted by jobs that meet their social needs -- that is something they can get outside of work. Programmers, conversely, are stereotyped as introverted people, for whom the social aspect of a job may actually be a valuable benefit.
Learning is another aspect of the motivation system that is inappropriate for sales people. Programmers have an aptitude for learning and probably enjoy it, and they have the high level of education to show for it. Sales people are less motivated by learning, unless the learning helps them sell more. Unlike with programmers, learning is less directly related to the job of a sales person.
This leaves the financial rewards system. At Infosys, this is said to "grow and erode" with the industry. Sales people understand if they make less when they sell less, but if commissions decrease during tough times, Infosys will lose good sales people. Infosys needs to maintain their sales commission rates going forward in order to continue to motivate their sales staff.
There is nothing in the existing motivation system to address the sales people's need for achievement. Non-financial rewards must be in place to recognize the achievements of sales people. This is particularly important in light of the added challenge they now face of opening up new markets for the company.
4. At present, Infosys has a complicated sales organizational structure with product-based units and geographic "practice" units. With a product-based unit, the sales staff can focus on maximizing revenue for a specific product type. As Infosys moves from a one-product environment to a multi-product environment, the company will benefit more from having the different strategic business units. However, the downfall of this type of system has to this point been the overwhelming focus on the U.S. market. As the sales staff builds expertise in the U.S. market, they tend to ignore the potential in other markets.
The geographic units (practice units) have the benefit of focusing sales people on specific geographic markets. These units, however, will force the sales people to have expertise in all of the product offerings. This is becoming increasing different as Infosys expands its product line.
Typically, a geographic structure is developed as a response to market heterogeneity and complexity (Zoltners & Sinha, 2001). This mirrors the situation at Infosys. Going forward, the company should utilize the PU structure more than the SBU in its marketing organization. The company's customer base has high heterogeneity. Infosys is delivering products of increasing complexity. The company will still need to have sales people that specialize in high-end products, given their inherent complexity. However, the PU structure should supercede the SBU structure because of its ability to not only to drive greater international sales but also to respond to the needs of the diverse customer base.
The existing structure of nine SBUs was set up in part to build a larger leadership pipeline. However, it is likely overkill for the current business needs of Infosys. Essentially, such a structure was a luxury the company could afford as long as it was growing rapidly. With growth rates slowing, Infosys needs to adopt a more customer-centric focus to its strategic marketing organization. The SBU structure does not reflect the customized service that Infosys provides. Worse, it appears to focus sales efforts to the known quantity -- certain types of American companies. In order for Infosys to expand, either to new international markets or to new types of customers in the U.S., a geographic approach is preferred, rendering the current SBU structure inadequate.
Quelch, John. (2008). Marketing your way through a recession. Harvard Business School. Retrieved October 19, 2009 from http://hbswk.hbs.edu/item/5878.html
Zoltners, G. & Sinha, P. (2001). The complete guide to accelerating sales force performance. Amacom:[continue]
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