A Case Study on Loctite Corporation - Essay Example

There were two types of sales. Industrial and Permatix; out of two industrial subgroups one group sold directly to OEM and other one to MRO through distributors. OEM sales were for long duration however MRO sales were immediate. Permatix supplies were sold through chain of wholesalers and retailers through direct contact. In 1991, company was among best ones in terms of its market share and earning per share growth. The sales decreased in 1992 due to geographical territories. Within Mexican city limits sales were easily handled but for sales outside territories there was a major problem in fact loss in form of efforts such as time and money of sales people.

Thus company experienced not only decrease in sales but also a major increase in turnover rate. As already mentioned that company suffered loss in 1992 due to decrease in sales and employee retention rate. So here it is understood that its actual output is not according to required standards. Hence the need is to implement effective control system to address discrepancies. Thus looking at the demands of industry and Mexican environment following are some of the important and unique suggestions for Jose Monteiro to regain market share and resolve other problems by implementing an effective control system.

LOCTITE’S EFFECTIVENESS The initial activity which Jose Monteiro can follow is to observe how much effective the ‘Loctite’ is. For this purpose he needs to check that whether goals are attained or not. At present goals are not attained due to the reasons stated above. So Loctite is not effectively performing. To enhance its effectiveness in order to fill performance gap for goals achievement each and every aspect need to be considered to increase performance. Some most common aspects that need attention are mentioned below; 1.

Jose can focus on effective planning thus stating goals appropriately and chalking out plans to achieve them. As according to research based on US organizations those firms were successful in adopting technology who focused on efficient planning techniques (Small and Yasin, 1997). Not the emphasis should be on extensive planning but also implementation of those plans must be prioritized. Most importantly, continuous improvement procedures can be implemented to control each and every step so that final outcome can be error free. 2. Mexicans never compromise their status they are very much conscious about it.

As it is mentioned that the employees or sales people were earning attractive commissions but 75 percent of them have not earned any commission during the first half of the year 1992. Many of them also compromised their commissions for outside territory sales. As rewards and compensation is the major factor that organizations need to consider to satisfy their workforce. So Loctite authorities should design compensation policies in such a manner that even if there are no sales due to some poor and tough conditions the sales people should be paid up to certain percentage.

This is because company is facing turnover problem. For it there is need to attract workforce which can be only possible if pay scales and job incentives are attractive. 3. Mexican organizations always adopt changes as they are serious in terms of business matters. If Loctite will be adaptive to changes it will able to overcome the loss