Please check out the links first below for “Assigned Readings”
DISCUSSION QUESTION (must address all forum questions.)
This week we covered a range of topics
1- Rational decision process (decision wheel)
2- Role of data analysis /evidence in effecting good decisions (evaluation of alternatives)
3- Rational actor /choice paradigm
Mr. Lyons is the new CEO of Mere Cosmetics, a medium-sized company that sells cosmetics using natural ingredients at premium prices, relative to drugstore brands. In recent years Mere has struggled with growing sales and profitability because of increased competition from well-known brands and new entrants into its market segment.
Mr. Lyons was charged with restoring the luster of the Mere brand, expanding its product portfolio, and finding new retail channels (Ulta, Sephora…). If successful, these longer-term product and sales strategies would differentiate Mere from its competition and provide more sales channels to grow revenue.
Mr. Lyons accepted a compensation plan that included a salary representative of the industry average, and an incentive plan that included multi year bonuses to be paid annually based on meeting annual targets for sales growth, and brand expansion. Mr. Lyons and the Board of Directors would jointly determine the targets each year based on the analysis of the market and the company’s situation.
Discussion Questions:
1- Based on the learning this week, will Mr. Lyons’ compensation plan help Mere Cosmetics achieve longer-term success? Be sure to provide your arguments in support of your conclusions.
2- Discuss how the rational actor paradigm /choice frames Mr. Lyons” decision-making.
3- What decisions can Mr. Lyons make that serve his interests, rather than those of Mere?