1. What are the advantages and disadvantages of a sales volume—based quota system ? Ralph Dickerson knew an adjustment was needed. In more than 20 years with Bright Right Plastics, he had been around for many changes, and as director of sales for the company, he had initiated a number on his own. Now Ralph knew that he had to reevaluate the quota system that had been used at Bright Right for more than 15 years.

The system had been revised years ago to focus the sales force on financial goals, specifically sales volume. At the time, business was slow and senior management had wanted salespeople to drive sales for the company. It had worked as the company prospered and was now enjoying great success. Selling to large hardware stores, the company had built a reputation as a good supplier of quality plastic fittings and joints in the retail plumbing industry. At the same time, many aspects of the business environment had changed since the quota system was last revised. Most notably, foreign competitors had come in offering competitive prices and better service. Several of Bright Right's old competitors had been driven out of business, and Ralph knew that part of the problem was the quota system in place at the company.