Compensation; Strategy; Market Value Jackson Supply Company is a publicly owned firm thatserves the medical supply needs of hospitals and large medical practices in six southeastern states.The firm has grown significantly in recent years as the areas it serves have grown. Jackson hasfocused on customer service and has developed an excellent reputation for speed of delivery andoverall quality of service. The company ensures that customer service is each manager’s main focusby making it count for 50% of the management bonus. The firm measures specific indicators of customer service monthly; progress toward these measures as well as others is used to determine eachmanager’s bonus. In the past several months, top management has noticed that although most managers are meeting or exceeding their customer service goals and receiving bonuses accordingly, thefirm’s stock price has been lagging while competitive firms’ stock prices have been rising steadily.Required What are the two most likely explanations for the problem facing Jackson Supply Company?a. Measurement (the firm is not measuring customer service properly) and strategic causal linkage (customers are looking for other things before customer service).b. Compensation (bonus payments are not high enough) and leadership (managers are not leading theirunits appropriately).c. Economic forces (the economy is not strong enough for the firm’s stock price to increase) and demand(health care needs are reduced due to more healthy living habits).d. Advertising (the firm is not advertising effectively) and accounting (the firm’s financial reporting doesnot conform with generally accepted accounting principles).
Compensation; Strategy; Market Value Jackson Supply Company is a publicly owned firm that
serves the medical supply needs of hospitals and large medical practices in six southeastern states.
The firm has grown significantly in recent years as the areas it serves have grown. Jackson has
focused on customer service and has developed an excellent reputation for speed of delivery and
overall quality of service. The company ensures that customer service is each manager’s main focus
by making it count for 50% of the management bonus. The firm measures specific indicators of customer service monthly; progress toward these measures as well as others is used to determine each
manager’s bonus. In the past several months, top management has noticed that although most managers are meeting or exceeding their customer service goals and receiving bonuses accordingly, the
firm’s stock price has been lagging while competitive firms’ stock prices have been rising steadily.
Required What are the two most likely explanations for the problem facing Jackson Supply Company?
a. Measurement (the firm is not measuring customer service properly) and strategic causal linkage (customers are looking for other things before customer service).
b. Compensation (bonus payments are not high enough) and leadership (managers are not leading their
units appropriately).
c. Economic forces (the economy is not strong enough for the firm’s stock price to increase) and demand
(health care needs are reduced due to more healthy living habits).
d. Advertising (the firm is not advertising effectively) and accounting (the firm’s financial reporting does
not conform with generally accepted accounting principles).
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