If an organization's competitive strategy relies on long-term relationships with the clients who purchase the organization's goods and services,the organization should reward its employees from its executives to its sales staff with incentives based on
A) quarterly sales.
B) annual profits.
C) prices of its stocks in daily trading.
D) a rolling five-year measure of financial performance.

Question

Quizplus · Accepted Answer

Since the organization's competitive strategy relies on long-term relationships with its clients, it would be appropriate to reward its employees based on a rolling five-year measure of financial performance. This would incentivize employees to prioritize the success and growth of the organization over short-term gains, and align with the organization's focus on cultivating long-term relationships with clients. Quarterly sales or daily stock prices might result in a focus on short-term gains at the expense of long-term client relationships. Annual profits may be too short-term for a long-term strategic focus.

If an Organization's Competitive Strategy Relies on Long-Term Relationships with the Clients