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QUESTION FOUR XYZ Corporation has two lines of business: (1) an established product and (2) a new product. Melissa is the brand manager of the
QUESTION FOUR XYZ Corporation has two lines of business: (1) an established product and (2) a new product. Melissa is the brand manager of the established product and is not involved with the new product. Melissa has considerable experience at XYZ Corporation working with the customers that regularly buy the established product. Suzanne is the brand manager of the new product and is not involved with the established product. Suzanne was recently hired by XYZ Corporation because of her experience working at a couple of the firms in the industry where the new product will be sold. The CEO has assigned decision different decision rights to the two brand managers. Brand Manager Decision Rights Manager Product Decision Rights Decision Rights over Customer over Product Selection Pricing Melissa Established No Yes Suzanne New Yes Yes Melissa does not have decision rights over customer selection. The CEO directs her as to which companies to call on. Melissa is allowed, within bounds, to set the price of the product. Suzanne has decision rights over both customer selection and product pricing. Assigning a decision right - a Yes - in the above table means the CEO determined the benefits of assigning the decision right exceeded the cost. Not assigning a decision right - a No - in the above table means the CEO determined the costs of assigning the decision right exceeded the benefit. Explain why the benefits of assigning Suzanne the decision rights over customer selection are likely to exceed the costs while the benefits of assigning Melissa decision rights over customer selection are not likely to be greater than the costs
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