Holmes Business Forms Company was founded in Chicago, Illinois, in 1923 by Arthur K. Holmes to sell bookkeeping forms and office stationery. Gradually, the line of products was broadened and the market was expanded to the entire American market. The company distributed an extensive line of business office products such as various types and grades of papers, envelopes, forms, ribbons, pens, pencils, tapes, staplers, and small office machinery such as transcribers, paper collators, and electronic stencil makers. Holmes products were sold to retail stores and business offices throughout the country by 150 salespersons operating out of thirty district sales offices. Although the sales training program had been considered effective, it had been many years since it had been evaluated.
The prospect of hiring ten additional sales personnel to keep up with increasing sales volume led Holmes’ general sales manager, Frank Ireland, to suggest that this was an appropriate time to appraise the training program. Any changes could be implemented in time for training the new recruits who were to be hired within the next ninety days. Specifically, he wanted to determine whether Holmes should continue with decentralized sales training or switch to centralized sales training.
Under the current program, new sales staff received a twelve-week sales training course at the Holmes district sales offices where they were employed. This training was under the direction of the district manager. The first six weeks were devoted to intensive training covering company history, organization, operations and policies, the salesperson’s job, sales techniques and methods of making sales presentations including answering objections and demonstrating the product, and, finally, personal development. Among the sales training techniques used were lectures, discussions, and role-playing sessions. Examinations were given at the end of each two weeks of training.
The last six weeks of the training program were spent in the field. Arrangements were made for the trainee to spend the six weeks with at least two retailers so that he or she might gain firsthand knowledge of the problems involved in retailing business office products. The trainee worked as both a salesperson and a buyer at the retail level. Upon completion of the trainee’s work in each store, the retailer forwarded to the district sales manager a thorough evaluation of the trainee’s performance. After successful completion of the twelve-week sales training program, including passing several examinations along the way, the sales trainee was ready to take over a Holmes sales territory.
Frank Ireland, the general sales manager, felt that the sales-training program should be conducted at company headquarters by an experienced trainer under his personal direction. In addition, he also believed that headquarters’ officials, such as the president, treasurer, production manager, advertising manager, and general sales manager should play active roles. He gave four reasons for favoring centralized training: (1) better quality training should result, with a full-time sales training specialist and top executives participating; (2) more uniform training should result, since each trainee would receive identical training; (3) better facilities at headquarters should provide an atmosphere more conducive to effective training; (4) centralized training should hold higher prestige in the trainees’ minds.
However, the company president, Will Holmes, and several other executives maintained that decentralized training should continue. Their arguments were that (1) training in the field provided the trainee with a more realistic and more valuable experience that could not be duplicated in a headquarters classroom, (2) the district sales managers should do the training since they were responsible and accountable for the performance of salespeople, and (3) it was less expensive to conduct sales training at the decentralized district sales offices.
While disagreement existed over whether sales training should be centralized or decentralized, all agreed that a decision had to be made before the ten new sales personnel were recruited and selected. This group would be the first affected by any change in the sales training program. Consequently, management set up a task force to investigate and to recommend either centralized or decentralized sales training.
Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.