CIMA Exam CIMAPRA19-P03-1 Topic 2 Question 1 Discussion

M plc is an IT company thatbids for large contracts to sell computer systems and also to serviceexisting systems. M plc's senior management hasalwayssetbudgets which are hard to achieve andhavemade no allowances for the recession.

The economy has improved andM plc's senior managershave made the budget even more optimistic. The budgetedsalestargethas been increased by 40%.

In the past,sales staffhave not tried to achievethe budgetsales because itwas generallybelieved that the targets wereimpossible to reach.

M plc has recently appointed a new Sales Directorwhohas decided that sales staff will bedismissedif they fail to meet sales targets for three successive months. He is also looking forhighersalesmargins than wereachievedbefore.

What are the likely consequences ofthe new Sales Director'spolicy?