Synopsis Cerjugo SA is the largest manufacturer and distributor of beer in a country in Latin America. The company currently sells approximately 360 million bottles of beer annually with revenues of over $200 million last year. In addition, the company employs around 2500 employees. This manufacturer of beer has been growing steadily through the years due to very little competition and no new entrants in the market. In order to find opportunities for growth, the management at Cerjugo SA decide to expand their product lines into juices. They decide to build a competitive advantage over existing juice manufacturers by focusing on “freshness”, leveraging their deep knowledge of their consumers, and by capitalizing on their strong retail customer
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“Motivation represents the forces within a person that affect his or her direction, intensity, and persistence of voluntary behaviour” and it is “goal-directed, not random” (McShane, Steen, & Tasa, 2015, p. 28). Money is a reward system that is the main motivation for people to work hard and to excel at their job, however if that is taken away from them, it can cause many people to not work hard at their job. At Cerjugo SA, “existing salespeople were trained to sell the new juice products in addition to the beer products that they were used to, and the sales compensation plan was modified so that a higher percentage of the pay would be variable based on total beer and juice revenues” (Miller, 2017). Due to the higher percentage of the pay being variable, many employees left the company as a result of not being able to sell the juice product line. This was because it led to them not being able to make the same amount of money as before. In addition, this demonstrates that many employees were either not happy about the alignment of the rewards, or were not motivated enough to sell the juice product line. Both resulted in the very high turnover in the sales force. In addition, this led to the perception in the market that Cerjugo juice was not of high quality compared to other juice …show more content…
“Organizations employ more people as they grow, which means they must widen the span of control, build taller hierarchy, or both. Most companies end up building taller structures because they rely on direct supervision to some extent as a coordinating mechanism and there are limits to how many people each manager can coordinate” (McShane et al., 2015, p. 327). Due to the tall hierarchy present in the company, it led to many problems within the organizational structure. One of the main problems was that there was not good communication between the lower levels and the higher levels of the hierarchy. “One concern is that executives in tall structures tend to receive lower-quality and less timely information. People tend to filter, distort, and simplify information before it is passed to higher levels in the hierarchy because they are motivated to frame the information in a positive light or to summarize it more efficiently” (McShane et al., 2015, p. 327). This was present within the Cerjugo SA organizational structure. There were three main executives under the president, which all had even more layers reporting to them. This led to a division between the three main executives and the president having to make multiple decisions without the formal agreement between the three executives. This can also explain why the two executives, Jose and
“Motivation represents the forces within a person that affect his or her direction, intensity, and persistence of voluntary behaviour” and it is “goal-directed, not random” (McShane, Steen, & Tasa, 2015, p. 28). Money is a reward system that is the main motivation for people to work hard and to excel at their job, however if that is taken away from them, it can cause many people to not work hard at their job. At Cerjugo SA, “existing salespeople were trained to sell the new juice products in addition to the beer products that they were used to, and the sales compensation plan was modified so that a higher percentage of the pay would be variable based on total beer and juice revenues” (Miller, 2017). Due to the higher percentage of the pay being variable, many employees left the company as a result of not being able to sell the juice product line. This was because it led to them not being able to make the same amount of money as before. In addition, this demonstrates that many employees were either not happy about the alignment of the rewards, or were not motivated enough to sell the juice product line. Both resulted in the very high turnover in the sales force. In addition, this led to the perception in the market that Cerjugo juice was not of high quality compared to other juice …show more content…
“Organizations employ more people as they grow, which means they must widen the span of control, build taller hierarchy, or both. Most companies end up building taller structures because they rely on direct supervision to some extent as a coordinating mechanism and there are limits to how many people each manager can coordinate” (McShane et al., 2015, p. 327). Due to the tall hierarchy present in the company, it led to many problems within the organizational structure. One of the main problems was that there was not good communication between the lower levels and the higher levels of the hierarchy. “One concern is that executives in tall structures tend to receive lower-quality and less timely information. People tend to filter, distort, and simplify information before it is passed to higher levels in the hierarchy because they are motivated to frame the information in a positive light or to summarize it more efficiently” (McShane et al., 2015, p. 327). This was present within the Cerjugo SA organizational structure. There were three main executives under the president, which all had even more layers reporting to them. This led to a division between the three main executives and the president having to make multiple decisions without the formal agreement between the three executives. This can also explain why the two executives, Jose and