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Sharpe BMW Case Study

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Updated: Jul 22nd, 2021

Case Background

Tom Dunn was appointed the new service manager for Sharpe BMW, a BMW dealership based in Michigan. He faced numerous challenges in his new post because the dealership’s customers were losing confidence in the firm’s ability to satisfy their expectations.

These problems were impacting negatively on the firm’s operations. The firm’s Customer Satisfaction Index scores were below the national average. The firm needed to carry out several changes in its internal operations to regain the competitive edge it used to have in the market.

Dunn together with the service director, Bob Deshane formulated a proposal, which would enable the firm carry out several improvements in its internal technical functions. This approach was needed to make the firm’s Customer Satisfaction Index improve (Subramanian 497). The bonus payment plan proposed, intended to make the firm’s technicians more motivated in their duties to enable them achieve quality outcomes in their performance.

Some technicians felt that the plan was noble but the bonus payments offered were very little to make any impact. Other technicians thought the new plan was good because it encouraged them to improve their own performance at the workplace. Dunn had a difficult task of coming up with strategies that would help Sharpe BMW increase its revenues in the market.

He also needed to improve the firm’s customer service ratings by changing customers’ perceptions regarding the quality of service offered by the firm (Subramanian 498). Therefore, this compelled Dunn to come up with customer service strategies to change the way technicians performed their duties at the workplace. The firm’s service department was very important to its long term operations because it determined the level of competitiveness the firm was going to have in the market.

Case Analysis

Dunn looked at different factors in the firm before deciding the most appropriate course of action the firm needed to follow to improve its services. He reviewed different customer charges clients pay whenever they bring their vehicles for servicing. He noted that the Customer Satisfaction Index was not being given the necessary attention it deserved by different stakeholders in the firm. He felt that the firm’s focus should be on the quality of service it offers its clients, to help it become more competitive in the market.

Dunn’s was not satisfied with the CSI scores because he felt that ratings made by customers regarding the quality of service offered by the firm were not good enough. He had noted that the dealership’s CSI score was below the national average, of 91%. This was an indication that Sharpe BMW needed to do more to improve its image in the market (Subramanian 500). He wanted Sharpe BMW to offer customers the best service compared to other BMW dealers operating in the area.

Deshane had noted that disparities in the way technicians were paid for performing two different jobs. The labor market for technicians had experienced a lot of changes, which made it difficult for several dealerships to hire and retain highly skilled technicians. Technicians had to go through rigorous certification programs, which made them demand high hourly wages. Dunn noted that the firm needed to train its dealers constantly to make them achieve high standards in their performance, which would make them more competitive.

BMW technology was constantly changing and the firm’s technicians needed to be kept abreast with the latest technological changes, which would benefit them at work. However, there was another matter of concern, which needed to be addressed (Anderson 78). There were disparities between customer pay and warranty pay, which influenced the amount of hourly wages technicians earned in the firm.

Deshane proposed that technicians whose CSI rating surpassed 91%, needed to be given a 2%-3% monthly bonus payment on top of their hourly wages. He argued that this showed the quality of their performance was high. This approach would help the firm assess the contribution of each individual technician in the firm. Deshane had noted that this approach was different from the labor practices of other dealerships in the area. He believed that this would make technicians more committed to the firm.

Dunn’s terms of employment stated that he needed to help the service department surpass the average national CSI score of 91%, to earn a bonus on his earnings. Dunn had managed to create positive relationships with technicians and other stakeholders in the firm. This made it easy for them to collaborate with him on different aspects of service delivery that needed improvements. Dunn’s employment background made him suitable for this role because he was effective in managing customer relationships (Anderson 87).

Dunn was in support of the new system which Deshane had proposed in the firm. He understood that the firm had to increase its service revenues and this was only possible if it improved its internal systems. However, some employees felt that the bonus plan proposed by Deshane was not adequate and they needed an improvement in the payment terms which had been outlined by the plan.

Most technical employees supported the plan because they felt the management was working harder to improve their welfare (Cummings and Worley 24). They felt that the management had begun to recognize their contribution to work and they needed to build on this to achieve positive outcomes. Dunn was keen to build on this trust to improve relationships between management and staff.

Implementation Plan

Dunn needs to consult technicians to understand their issues before implementing the bonus payment plan. He needs to call a meeting with them to explain to them what the company feels needs to be achieved to make it possible for the firm to move in a positive direction. The disparities in customer payment and warranty payment jobs need to be ironed out to motivate technicians to work harder in their assignments.

The firm needs to review the amount of money paid for warranty jobs because this can discourage technicians from working hard. Technicians who do more warranty jobs earn less compared to those who do jobs paid by customers directly. This disparity makes more technicians to prefer customer jobs over warranty jobs and this is the reason that has made the firm to register poor CSI scores (Cummings and Worley 28).

In conclusion, the firm needs to increase the average repair time for each BMW to 2.6 hours to motivate technicians to improve their performance. This will help iron out pay disparities that exist to ensure that the bonus payments they get are enough. The firm should maintain Deshane’s plan of giving technicians who exceed the average CSI score in their performance by 2% to 3%. This will improve the firm’s performance in the market.

Works Cited

Anderson, Donald. Cases and Exercises in Organization Development & Change. London: Sage, 2012. Print.

Cummings, Thomas, and Christopher G. Worley. Organization Development & Change. Mason: Cengage Learning, 2009. Print.

Subramanian, Ram. “Sharpe BMW Case Study.” Case Research Journal (2002): 497- 503. Print.

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