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Visionary Design Systems

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Title:
VISIONARY DESIGN SYSTEMS: ARE INCENTIVES ENOUGH? **prize winner**

Reference:
9-495-011

Product type:
Case

Author(s):
Baker, G; Monsler, K

Publisher:
Harvard Business Publishing

Topics:
Bonuses; Employee compensation; Incentives; Service management; Silicon Valley

Publication year:
1994

Version date:
14 April 1995

Length:
20 pages

Data source:
Field research

Status:
Active

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Abstract:
A compensation case about a small, high-tech firm based in Silicon Valley with eleven offices throughout the country. Visionary Design Systems (VDS) began as a sales company selling Hewlett-Packard's Computer Aided Design systems, and grew rapidly into a full-service systems integrator. All employees, including engineers, administrators, and receptionists, received a significant portion of their income from commissions and bonuses, and all were shareholders. The company espoused a philosophy of empowerment, under which all employees were given substantial decision-making authority, and were expected to act in the interests of the firm. Examines in detail one group that, although it had both the authority and the incentives to exploit a new market opportunity, continued to wait for top management's instructions and approval before making decisions or taking action. The teaching purpose is to examine the costs and benefits of decentralized decision rights and the creative use of incentives. Also illustrates the potential problems with compensation systems that assume that well-informed employees faced with the right incentives will make the right decisions.

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| |© Copyright ecch 2009 | home | contact | sitemap | browser compatibility |

http://hbr.org/search/Karin%20B.%20Monsler/

|CASE (FIELD) |[pic]Email this |
|Visionary Design Systems: Are Incentives Enough? | |
|by George P. Baker, Karin B. Monsler | |
|20 pages. Publication date: Oct 18, 1994. Prod. #: 495011-PDF-ENG | |
|A compensation case about Visionary Design Systems (VDS), a small, high-tech full service systems | |
|integration firm based in Silicon Valley with eleven offices throughout the country. All employees, | |
|including engineers, administrators, and receptionists, received a significant portion of their income | |
|from commissions and bonuses, and all were shareholders. The company espoused a philosophy of | |
|empowerment, under which all employees were given substantial decision-making authority, and were | |
|expected to act in the interests of the firm. This case examines one group that, although it had both | |
|the authority and the incentives to exploit a new market opportunity, continued to wait for top | |
|management's instructions and approval before making decisions or taking action. | |
| | |
|« Hide | |

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Learning Objective

Examines the costs and benefits of decentralized decision rights and the creative use of incentives. Also illustrates the potential problems with compensation systems that assume that well-informed employees faced with the right incentives will make the right decisions.

Subjects Covered

• Employee compensation

• Incentives

• Service management

Setting

Silicon Valley; $18 million revenues; 1994-1994

|Format |English PDF |
| |English Hardcopy Black & White |…...

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