Sears Economic Strategies

In the early 1990s, when facing severe financial pressure, Sears Roebuck & Co. implemented various shady economic tactics that resulted in a 50 percent increase in consumer complaints over a three-year period causing several states to conduct undercover operations to investigate these claims. When implementing both “bait and rip off” tactics and a quota based system of compensation for its mechanics, Sears Auto Repair Centers acted in bad faith operationally and ethically. Both of these economic strategies were ingrained with potential business law time bombs that threatened financial loss from settlements, litigation, restitution, and lost future sales. These management decisions threatened the integrity of Sears as a company, the integrity

employees into acting unethically. At the surface level, this quota policy seems like a great way to incentivize increased production and profits by motivating employees to perform at maximum efficiency in order to ascertain greater compensations. However, under the commission system employees were being indirectly forced into performing volume work instead of properly servicing individual customers. Sears’ mechanics probably felt their jobs were in jeopardy when not complying with or not meeting company quotas for repair sales. Taking these details into account, the systematic acts of over-charging and charging for work not done make a lot more sense. Sears management inadvertently established a system that displaced the goal of excellent service to the customer and replaced it with the goal of reaching the quota by any means necessary. While this system is unethical, there is no particular law that targets company compensation plans of this

While the hiring of quality assurance agents may be a financial burden at first, doing so will improve the company image in the eyes of the customer, in the eyes of our employees, and in the eyes of the government. For the customer, quality assurance ensures the reliability of programs to uphold customer interests when being implemented. For employees, this added security net prevents further actions by the company management that would induce ethical burdens on well-established mechanic professionals and endanger job security. There are no more moral dilemmas between producing quality work below quota marks or producing mass work in volume at quota levels. As for the government, this approach demonstrates a proactive attempt by Sears’ top management to ameliorate past mistakes and act more ethically in trying to produce net profits. Thus, this approach could limit or prevent further litigation by the government. In order to establish that such activities will not continue in the future, I would eliminate the incentive compensation program and schedule randomized check-ins by undercover officers to routinely check operations. Removing compensation quotas for volume work and scheduling