The Peugeot's Company Charter contains all the types of objective model apart from the objectives of Result, which is understandable, because this charter talks a lot about principles, concepts and company's policy.

Question 1

The Peugeot’s Company Charter contains all the types of objective model apart from the objectives of Result, which is understandable, because this charter talks a lot about principles, concepts and company’s policy. This kind of elements, by definition, does not have to display precise figures; this charter seems to be made to help dealerships to understand the views of Peugeot, concerning their place in the P.S.A group, its aims, its staff, its customers and suppliers, its costs and its expectations for the future.

∙ Objectives of Intent

Let us start with the Objectives of Intent. The three points concerning “the participation as a part of the P.S.A group” seem to be clearly some of them, because first, they introduce no measurable aspects, and secondly, because they are all made by the same way, enouncing the way of thinking of P.S.A, in terms of partnership, their views of their future, in order to make their partners apply and share their values and policy. Concerning the first point, we can indeed notice that they only indicate the way they see their partnership in terms of production and consequently, there are no emphasized level of involvement concerning their support, that could be monitored.

Concerning the two others points, the main information that is given, is that the firm has to help and support the group in order to increase the sales, the market shares, and to improve the profitability, in order to be more competitive. These two objectives gives us no data concerning the level of commitment a partner has to respect toward the group. We can conclude this part by noticing that at every time, the Charter let hover an ambiguity over concerning the objectives, because they give clear ones to the group and let the place of the firm not precisely defined (certainly, in order to get more freedom to define it later).

In the first point of the “company aims” part, concerning the running of the production plant by an effective manner, two objectives can be linked up to it; first, it could be considered as an objective of Intent because it contains qualitative terms, such as “quality”, “efficiently”, “by maximum attention”, which contributes to make it hazy. But, on the other hand, this one could be considered as an objective of Process, because it concerns the production and especially the way to improve it in order to be more productive (this part shows an evolution of the concept).

The two last points of this part, concerning the kind of service they expect and the staff, are objectives of Intent too, because for the first one, there is no way to measure the kind of service, they would like to deliver and for the one concerning the staff, the level of security and rewarding cannot be interpreted in an objective way. The last point seems to be only made to include the staff to their policy.

“Our customers and suppliers” part talks about the definition of the customers for the group and the only objective that appears is the satisfaction of the customers, which is a clear objective Intent. The given definition of the customers does not enable us to measure their satisfaction.

Finally, the last objective of Intent is the “future” part and more precisely and the latter, because its goals is to rally the staff and the firm by showing how important it is to improve always their work, highlighting the fact that their work security depends on it.

∙ Objectives of Direction

Concerning these ones, the one, which is without ambiguity, is the second point of our company aims, because it is more precise than the others and because it provides two expressions that could be used as a base of measurement: “to achieve annual sales target” and “to achieve long term market share growth”. The only thing, which prevents it from being an objective of Result, is that there is a lack of another form of measurement: quantity, time or money.

There are two points , which could be considered as well as objectives of Direction. We have said before that the 2& 3 parts of “our participation as a part of the P.S.A Group” are some objectives of Intent for the likely partner, because we could not measure their involvement. But for the group, it is clearly objectives of Direction, because thanks to the terms “increase, “become Europe market leader car producer” and “increase profitability”, we could gauge the performance of the group and because these ones are about an evolution of their situation.

The third part of the Charter is attached to their internal policies concerning the staff.(Our people) The last sentence clearly shows the objective, which is a direction one, because on one hand, the staff satisfaction could not perhaps be assessed, but on the other hand, the improvement of the performance of the firm can be gauged by profitability indicators; so these one could be linked with the staff performance. Moreover, we can notice the elements before the objectives seem to be the process to follow to improve the satisfaction of the employee, and by connecting the work of the ...

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∙ Objectives of Process

Finally, we can notice that all the points of “our cost” part are some objectives of Process, because all these ones are built in the same way, i.e. to have for final aim to reduce or prevent from increasing the costs. So each first part of these objectives are the means to succeed in this cost policy. These kind of objectives could be considered as a method to follow, to achieve this policy. They look in other terms like some points of a procedure to respect to reach. to minimize the costs.

Question 2

The first measurement apparatus, called “the annual sales plan”, is made to give precise targets in terms of sales, to each dealer. Thanks to the league tables, at the end of each year, a kind of assessment is implemented, which allows Peugeot to know clearly, in a definite area, the level of achievement of the targets of each dealership. So, the group can see which areas have the best results, in comparison with the objectives, and by the same way, the others that meet difficulties. This kind of assessment is very relevant for Peugeot of their work, because in order to get a more clear vision of the situation a league table is made. Moreover, to know the level of achievement of the target in the U.K market, Peugeot has just to bring all the figures broken down by area together. So the first part of the objective concerning the “company aims”, i.e. “to achieve our annual sales target in U.K” can be assessed by the plan. We can just notice that the sales plan in term of measurement seem to be a great device, because it enables Peugeot to have specific figures concerning its turnover in each area and with them, they can implement some series of statistics to measure the trends followed by it in each region. Concerning the second part of this objective, i.e. “ to achieve long term market share growth”, this plan seems to be very adapted too, because the managers can influence the trends concerning the sales objectives, by always increasing the targets of each area; so they can plan a long term strategy, in correcting their appraising by the help of the league tables. By collecting these ones, they can have a global view of the evolution of their sales and they can monitor the right unrolling of their strategy.

The second kind of measurement, called “the composite”, contains several connections to the Charter. First, in the first set, which provides a lot of data concerning the profits, the different ways they are made, and their distribution, allows Peugeot, to measure the profitability of the dealers, and then to try to improve it, by analyzing the profit mix and determining which sectors constitute the most of them. This kind of data corresponds with the “our people” part, which says the firm counts on its staff to improve “the company’s performance” and with use the term “prosperous” which can be considered as a synonymous in a business term, of profitability. Moreover, this set provides the evolution of each key statistics, which means that Peugeot can determine which areas increase it or minimize it: by example, if the net profit per employee decrease it could mean that the staff has increase and if the number of employees has not changed, it could show that there is a problem with their motivation and so with their satisfaction because the profit decreases. The second set, which accounts for the contact between the regional managers and the customers, corresponds with the part called “our customers and suppliers”, because it monitors each effort made by the staff to stay in touch with their dealers, which is a very big part of their policy, because it is said that they considered their dealers as their customers; it enables them to know if the managers try to provide an outstanding and comprehensive service to their dealers, which one of the objectives of the company aims. So the figures in result of their contact measure this objective. The last set, which is about the figures concerning the sales and profits made by the dealers, allows Peugeot to know the contribution of each of them in the group profitability and so correspond with the first part of the charter and also for the same reasons as before, with the “our people” part.

The Lion Standard program is in fact, the most complete assessment, because it includes the results of the others programs, and it provides three other assessment areas. With all the received data , rewards and bonus are given to the best dealers, which encourage them to improve their work concerning the sales and the quality of their service. Concerning the first assessment of the program, i.e. “Entry requirement”, it enables Peugeot to make all their dealership respect their policy, and in others words, to make them apply to the P.S.A values, by respecting rules about exclusivity, and by using a lot of promotional products of Peugeot and finally by using P.S.A hardware. So this assessment allows Peugeot to be sure that all their dealerships act as members of the P.S.A group and it forces the dealers to respect the first part of the Charter.

The operating Standard part concerns the respect of the policy of the firm, which corresponds with the main idea behind the first part of the Charter, because the dealers are judged on their degree of appliance of the procedure, which is implemented by the management service. The example of the sales department highlights this, because they do not seem to be assessed on this part by their results, but by the points of the sales procedure they have to respect, such as the letters and the prospects, and by the fact facts that all is painted in the same colors of Peugeot.

The two first parts can be linked up to “our people” part too, because by using the Peugeot’s work tools, it shows that ensure them of the dealers use their technology and follow their methods of works, therefore it is a good measurement of appliance of their staff to their policy.

Finally, the customers assessment has to be linked with the part of the Charter called “our customers” because it measures the way that a dealer to try answer the expectations of its customers, and so it helps Peugeot to gauge how he tries to satisfy him which is one the main issue of this Charter. For the same reasons as said previously, it may be linked up to “our people” to see the degree of respect of the established procedures.

Question 3

The Peugeot customers’ assessment stressed a lot on the contact between their customers and their two main aspects of their activity, i.e. the sales & after sales services. Indeed, in order to establish a strong relationship with their customers, this assessment takes not less than 3 questionnaires and 5 ways of contact beforehand. In fact, this form has for aim to target each attempt made by the dealers to stay in contact with their customers. It shows that they have total reliance on their customers’ loyalty and that they consider that it is very profitable for the company to target them.

But as the statement has noticed it, a part of this assessment seems to have been forgotten. Indeed, we can easily think that most of visitors, who come in the car demonstration, are potential customers. Peugeot does not seem to make any enquiry and any study about them with this form. So, a part may miss because, all of the works that have been made by the dealers to convince and to make a visitor to become a customer, and so all their efforts made before the sales, are not assessed at all, by the form. Therefore a dealer has complained about this gap, because it is probably one of the most important part of their activities, and it maybe take most of their time too.

So, they should probably do another part, which could include two kind of studies: a quantitative and a qualitative one. A quantitative one to know how many visitors have been to the car show room and how many have become thereafter customers; and a qualitative one to understand the purpose of the purchase or the reasons they do not buy one. The results of such a part should help to improve the sales techniques of the dealers.

As it said in the handbook, the customer assessment tries to evaluate how the dealers try to meet the expectations of its existing customers and its Prospective ones. But, with such an assessment, the policy of Peugeot could appears to the dealers, to be totally based on the idea that this firm expects more on their actual customers to make money than in a new ones, which is false when we compare with the aims of its assessment. It could be present a danger for the firm, because as they are not owned by Peugeot, this could be interpreted as the fact that Peugeot only takes care of them when they play its brand name but for the harder work, i.e. to convince the people and all the phase preparing the sale, they only worry about to see the number of sales and not the efficiency of their dealers.

Question 4

The national Summary is an analysis of the activity of the dealerships. Its three contents could be used to gauge the level of effectiveness, efficiency and economy, they run their business.

First, concerning the effectiveness, the first part of this form, i.e. the commentary written by the national business management manager, could be associated to this notion, because it provides his analysis and his views of the results provided in the second part. The summary is, in fact, a help to visualize the main trends followed by the business, i.e. the evolution of the turnover, and the profit. As it said in the description, the length of his commentary is limited, so he could just take the results of its firm to analyze its performance.

Concerning the key statistics provided in the second part, these following ratios directly concern the effectiveness: the gross profit% sales, the direct profit % sales, the operating profit % sales and the net profit % sales. The reason, why they are attached to this notion, is that the profit is the final aim of each private firm and its sales are the result of the work of the dealers, so these ratios enable P.S.A to know the contribution of the sales to make the profit and thus, its level of achievement. The average turnover is about effectiveness too, because it is the aim of each dealer to increase their sales and this measures the degree of achievement of their work. The graphic, called “net profit before tax” are also about this notion, because it shows the progression of the profit within the year, and that emphasized the seasonality of the activity in terms of results.

Secondly, concerning the efficiency, the first statistic reported to it, is the “net profit per Employee” because it measures the contribution of each employee in the profit, so we can compare the employees as the means to make the profit , which corresponds to the definition of Etzioni concerning the efficiency.

The second part of stats, which includes: “new unit volume”, “used retail unit volume”, “average new selling price” and “average new selling price” and “average used selling price” are all about this notion of efficiency because it allows Peugeot to decompose its turnover in terms of value and volume and, in other terms to know if it is the price or the volume which contributes and composes it, the more. So it enables them to know if it is a qualitative or a quantitative policy, which provides the most of their turnover. So it is the process of their sales, which is assessed and so it is about efficiency.

The first graph called “total new units sold” is about efficiency for the same reasons as the previous statistics and because it describes the seasonality in terms of volume of the units sold, and so it allows them to know where the demand has increased among the year, and to know what is the part of contribution of the new unit sold to the profit within the year. ( By a comparison with the graphic beside).

The next graphic, called “profit mix” is about efficiency because it decomposes the profits in terms of sales, services, and parts and so it shows the evolution of the contribution of them to make it.

The final graph is also about efficiency, because it shows their part in the sales process and by the way, and it helps to visualize the efficiency of their work to the net profit.

Finally, concerning the economy, the only point, which is in touch with this notion, is the number of employees and moreover its evolution, because if the number of them decreases, it means that the costs are probably decreasing too and so it could minimize their cost in term of wages.

Concerning the performance indicators, we can notice that three are provided in the handbook. First, the average turnover seems to be a good indicator, because it highlights the evolution of the work of the dealerships and their results within the year.

The second performance indicator is the growth profit % sales, because every firm in every sector provides this one, so a comparison could be made with the concurrence, to know the profitability of them. Concerning the indicator itself, it enables Peugeot to know the involvement of its sales in the profit and so how profitable they are.

The third one is about the net profit of employee because it allows Peugeot to quantify the implication of its staff to the profit and by knowing its evolution, Peugeot can determine if the work of their employee is becoming more profitable, considering that the number of employees has not been evaluated.

Question 5

There are several issues concerning the league tables. The leagues tables are made with the data provided by the annual sales plan, which is in term of measurement, is a tool which only take account of the number of sales. The second aspect of these tables is that they are made with the customer’s assessment performances, which takes account of the way the dealers try to keep the contact with their customers. So, these ones only measure the way the dealers try, while they increase their sales, build their relationship with their customers. Or, one point of the firm policy is also to increase the quality of the provided service, by extending the delay between the visits of the customers in the dealership, which is not assessed by this table. So the dealers have to face two constrains: either they do not provide a good quality service to their customers in order to keep a strong contact with them by seeing them a lot, nor they provide an up-market service which has for consequence to increase the intervals they reach them and so they do not answer a criteria assessed by the league table. Then the dealers have to make a choice between, following Peugeot’s policy or trying to be well assessed by not taking account of this directive.

The second inconvenient is that these ones do not take account of the environmental aspects of each dealer, such as the purchasing power of the potential customers of their respective areas, the customers habits peculiar to them and so their specificities. As a result, it cannot be a good tool of comparison between the dealers, because it may be very demotivating for the ones in areas, which does not provide good perspectives. The dealers do not seem to think their results relevant, because it does not judge the quality of their work but the kind of their potential customers.

Moreover, this kind of drawbacks is reinforced by the fact that the evolution of their results in term of sales and in term of efforts make toward the customers are not accounted by the forms, so they really cannot be showed the efforts made by each dealer to make its areas more profitable. As no financial results are attached with these tables, the comparisons between them is not possible too, because such statistics would enable to understand the difference between dealerships, and that would justify the fact that they do not find them relevant.

Peugeot in order to try to reduce such kind of inconvenient produced by this tool, has tried to implement a bonus system attached with some promotions. But they do not seem to be very efficient because, as the main rewards are given with the “Lion Standards”, these bonuses do not seem to be very significant to the dealers, because they perceive that the Lions’ ones contribute more to their profits. On the other hand, Peugeot, by inserting in their customers assessment two delays of contact of their customers, it has as a result improved the concordance between their policy and their assessment, and so it has eliminated such problems (see first part of this page). Concerning the problem of the specificities of the market place, Peugeot, thanks to the dealer Council system, has tried to reduce it, by grouping in “profit clinics groups” their dealers together, to talk about their firm policy, and their way they see the evolution of their business. So perhaps, these tables have not been changed, providing the bad consequences of such disparities due to the difference between the areas, but thanks to the meetings, the dealers can show their dissatisfaction, which can be recorded at a higher level of the firm (Peugeot managers0, and which could be, by this way, fixed.