Caselet 2: Marchetti Machines: One Big Happy Family
Emily was steaming. Even for a Monday, this one was proving to be one of the worst. The first thing she did every Monday was a conference call with the other three regional sales managers and her boss, the VP of sales. While on the call, she read an e-mail from one of her best salespeople, Frank McCaslin. Frank had worked for weeks to land a large account, traveling from Chicago to LA three times to meet with various members of the client’s executive team. They loved his in-depth analysis of their situation and the solution he had crafted. They also seemed happy with the price. All it took was for the president to sign off on the deal. Then he got the following e-mail from his client’s chief financial officer, which he had forwarded to Emily: “Frank—I played golf with Louis Ruggieri from your office. I think he’s your service manager. Anyway, he says the service team hates to work on the system you proposed. I think if that is the case, we’re going to have to open our search up to some other companies to try to find something more reliable.” Frank added this note to the e-mail: “This is one of the biggest sales of the year! What was Ruggieri thinking?” Emily wondered that herself. About this time, Jerry, the VP, said, “Okay, we’ve got a reorganization coming up. We’re going to take the bottom 10 percent of accounts and give those to inside sales. Further, inside sales will no longer report to me, but will be part of a new division that will include Web sales and sales through distributors.” Emily interrupted, “So we won’t have distributor sales in our division anymore? We’re already having problems with distributors selling to our accounts; how can we resolve these problems if they are part of another division?” The way the current structure works, distributors are only allowed to sell to certain types of accounts: accounts under $100,000 in annual revenue, accounts that require engineering that Marchetti doesn’t do, and any account they find first. Distributors cannot sell to the government or any accounts that are already on Marchetti’s customer list, but sometimes, company names are not obvious or divisions operate under different names, and it is difficult to know who owns the account. Marchetti Machines has a sales force that helps distributors sell, in addition to those, like Emily’s sales team, that sell direct. But prior to this reorganization, all sales reported to Jerry, whether inside, distributor, or direct. Now that was about to change.
Questions
1. How should Emily handle the problem with Louis Ruggieri? What should she do about the account? What should she tell Frank if the account is lost completely?
2. What problems are likely to occur because of the reorganization? Did these issues exist before the reorganization, and will these issues be better or worse as a result of the change in structure?