4-2: Reflection Paper: Module 4 - Essay Example

Sears, Roebuck, and Co expanded due to the economic market. Their expansion included an insurance company -Allstate Insurance-, a real estate company -Coldwell Banker-, securities -Dean Witter Reynolds-, and a credit card company -Discover. The auto centre scandal occurred when Sears faced financial crisis. Market shares of other stores were increasing rapidly. Sears tried all sorts of ideas including cost cutting and offering incentives, to bring up the sales but the graph kept on going down.

They offered the mechanics to be paid hourly plus commission including incentives for attaining hourly production quotas. However, these efforts brought a negative image and Sears was accused of violating the state’s “Auto Repair Act” by the California department of consumer repairs. The increasing consumer complaints especially about brake repairs led to charges against unexplained errors as well as against compensation system. Nevertheless, to lessen the harshness of accusations the CEO and chairman of Sears, Brennan, took full responsibility of the company’s mistakes and promised to rectify those errors.

He assured to eliminate the compensation program for service advisors, substitute commissions based on customer They made efforts to have ways to measure performances, yet, Sears failed in shopping audits and were again a part of a scandal. The check seemed successful as employees were posing as customers for this audit. But their employee named Chuck Fabbri launched a complaint to the U.S senator Richard Bryon against Sears wage policy for mechanics. Sears had to agree to a multimillion-dollar settlement with the state of California and other 41 states that had filed similar charges against Sears.

Even this effort was not enough and the company was on probation for three years by the state of California. To recover from these problems they sold their security firms, the discovery card company, some of their real