Question
Consumers and attorney generals in more than 40 states accused a prominent nationwide chain of auto repair shops of misleading customers and selling them unnecessary
Consumers and attorney generals in more than 40 states accused a prominent nationwide chain of auto repair shops of misleading customers and selling them unnecessary parts and services, from brake jobs to front-end alignments. Lynn Sharpe Paine reported the situation as follows in "Managing for Organizational Integrity," Harvard Business Review, Volume 72 Issue 3:
In the face of declining revenues, shrinking market share, and an increasingly competitive market . . management attempted to spur performance of its auto centers. . . . The automotive service advisers were given product-specific sales quotassell so many springs, shock absorbers, alignments, or brake jobs per shiftand paid a commission based on sales. . . . Failure to meet quotas could lead to a transfer or a reduction in work hours. Some employees spoke of the "pressure, pressure, pressure" to bring in sales.
This pressure-cooker atmosphere created conditions under which employees felt that the only way to satisfy top management was by selling products and services to customers that they didn't really need.
Suppose all automotive repair businesses routinely followed the practice of attempting to sell customers unnecessary parts and services.
- How would this behavior affect customers? How might customers attempt to protect them- selves against this behavior?
- How would this behavior probably affect profits and employment in the automotive service industry?
- Compare this case to the recent ethics case involving "Wells Fargo Bank". In a short paragraph, describe what took place at Wells Fargo and how it compares and differs from the scenario described above.
You might find the Wells Fargo case below useful:
Instructions:https://hbswk.hbs.edu/item/what-are-the-real-lessons-of-the-wells-fargo-case?cid=wk-rss
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