Which of the Following Statements About Straight Commission Compensation Plans

question 33

Multiple Choice

Which of the following statements about straight commission compensation plans is true?

• A) Compensation cost per unit is always lower under a straight commission plan
• B) Many firms, especially those engaged in relationship selling have abandoned straight commission plans
• C) Straight commission plans increase management's control over the sales force
• D) Companies operating with straight commission plans tend to have lower turnover rates when business conditions are poor than do companies with a straight salary plan
• E) Firms that are short on working capital should never use the straight commission plan

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Definitions:

Individualistic Value Orientation

A cultural perspective in which the importance of the individual and individual rights are emphasized over group or collective considerations.

High Collectivism

A cultural orientation emphasizing strong loyalty to one's group and prioritizing group goals over individual interests.

Long-Term Orientation

A cultural or organizational perspective that emphasizes planning and investing in the future, valuing perseverance, and viewing change as evolutionary.

Ethical Decision Making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.