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American Mutual Funds: Retail Service Division_ Case 5
Question 1
When an organization observes some worrying or undesirable signs about its sales or its operating
way, it is necessary to redefine it, in order to be able to compete a tough market. This is what,
American Mutual Funds (AMF) organization, did in order to cope with the situation of squeezed
profit margins and slowing trading volume. The impact of the squeezed profit margins, as well as,
the slowdown in trading volume is mainly due to the slowdown in the market in 2001. The
immediate mobilization and the action of the top management of AMF, was a key point for the
future course of the company. Instead of choosing the easy way and proceeding with the
redundancies of their employees, as many of their competitors have chosen to do, they chose to
invest and help the company’s future improvement.
In order for the investment in the company’s future to be successful, top management has set a set
of directives. One of those directives, was the reorganization of its call centers in the Retail
Services Division in an effort to grow its asset base. The reorganization called for traders and
people who were responsible for placing the more complex transactions in the company, to focus
and work more on selling function, in order to inform current customers, the ability of purchasing
additional stock instruments. Obviously, customers’ input is crucial if reorganization is successful
or not. Clients considered as “hot” prospects in case of immediate selling exertion.
Top management AMF has some problems and challenges must address in order to implement
successfully the reorganization program. An essential prerequisite for beginning the reorganization
program at AMF, is the change of relationships between traders and sales representatives at AMF’s
call centers. Their relationships must be characterized by more interaction and cooperation. The
planning meeting between the president of AMF, Smallwood, and his vice presidents resulted, a
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list of some implementation issues that they had to handle. Implementation issues such as training
and retraining, that considered as needed. Moreover, team building and the change management
process, that are the most crucial steps in a reorganization because either can lead you to success
or failure. Change management process needs special handling with the right decisions in order to
succeed without any tragic mistakes.
The most important challenge that the Top management of AMF must address during the process
of reorganization is how smooth off would be the selling process between traders and sales
representatives. This challenge also lies in the success of the program. Due to the climate of strong
commitment in the organization, this program created an emotionally charged situation. This
situation involved interconnected chains of problems or otherwise annoyances both for traders and
salespeople. Traders would difficult accept being servile to the salespeople and also salespeople
would bother them when traders would involve in the selling process and possibly costing them
sales and bonus money.
The instruction of restructuring the organization would need to be based on the three pillars of
coordination, trust and team spirit. The fact that the management team needed to create and
implement a successful reorganization plan in a duration of 2 months, added more pressure and
stress to the team. This resulted in the program being considered much more complex and involved
than they thought at the beginning.
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Question 2
It is well known that AMF’s Retail Services Division is consisted of two different groups of
employees: salespeople or otherwise sales representatives and traders. Due to the fact they are
working in different groups, they have different duties and responsibilities.
Department of salespeople is responsible for developing and retaining assets. Their job is based
on assisting existing and potential customers in defining the best combination of investment
products to meet their own unique needs. Moreover, sales representatives are not obliged to call
potential customers but they only respond to inbound calls. Through incoming calls salespeople,
show a cheerful character and always willing to help by giving information or answering any
customer inquiries. They are not hesitating to give again and again endless information and
additional details, because they are willing to help their customers as much as they can. They
support their organization and try to convince their customers as much it’s possible. The job of
sales representatives includes placing ads in local papers, the Internet and also for extensive
referral program. A sales representative before get the job, passes through interviews. In order to
be judged a suitable sales representative ideally needs to have knowledge of general customer
service and financial aptitudes. Successful candidates through their training at addressing customer
objections, are able to learn effective questioning strategies.
Unlike salespeople, traders have different responsibilities and duties than them. For instance,
trading department has trading representatives who are responsible for division and placing of
trades in investment vehicles. They are organized into groups of 15-25 people who report to a
trading manager and as follows, the trading manager report to the trading director. Their main
duties are chiefly on buying and selling securities. Moreover, they were responsible for assisting
clients who called in to the call center in placing more complex transactions. Trading managers
were responsible for monitoring customer service skills during clients’ phone calls. They should
have the ability to answer questions, maintain a professional character, willingness of helping
customers to solve problems and also their level of politeness. The vast majority of them are detail-
oriented, who like the variety of different activities and likes to analyze in depth a few job tasks
and then perform them as better as they can. Before the directive of reorganization, the average
trader was able to made 50 to 72 trades a day.
The implementation of the reorganization plan will occur some changes in the job duties and
responsibilities both of salespeople and traders. Firstly, traders should take more responsibilities
considered selling functions and coordination of sales force activities. Not only, traders’
responsibilities changed but so does salespeople’ responsibilities. For instance, their previous
