Statistics - Applications Projects

Background Crane Life is a major life insurance company in the US. The CEO of Crane Life was recently

Background

Crane Life is a major life insurance company in the US. The CEO of Crane Life was recently tragically killed in a car accident. Graham Land, the newly appointed CEO, is quite worried about the attitudes of the sales force, especially their perceptions of company values. Consequently, he has asked you to conduct a survey to measure key elements related to these issues.

He has suggested that the extent of agreement with the following five statements be measured on a 5-point Likert scale where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree, 5 = strongly agree.

Q1:      The company has an excellent training program
Q2:      The company is committed to providing excellent service
Q3:      The management of the company has very traditional and conservative values
Q4:      Company practices do not discriminate against women
Q5:      The company is rife with internal power politics.

In addition, the following question should be included:

Q6:      On a numeric scale, where 0 means totally autocratic and 10 means totally democratic, how would you rate the management style at Crane Life?

The sales force is located in six distinct geographic regions:

Region Number           Area                                                             Size of Sales Force
1                                     South East                                                                75
2                                     North East                                                                 116
3                                     Midwest                                                                      73
4                                     South West                                                              63
5                                     Mountain States                                                       94
6                                     West Coast                                                                89
Total                                                                            510

Each of the six regions comprises several branch offices headed by a Branch Manager. The various branch managers report to a regional manager. There are two Regional Directors, one controlling Regions 1-3 and the other 4-6. Region 4 was only established eight months ago. Prior to that time, the branches were part of Regions 1, 5 and 6.

A member of your staff has captured the results of the survey in an Excel spreadsheet. Besides The responses to the six questions, the following personal details were also captured:

Basic annual salary (BAS)
Commission earned over past 12 months (COM)
Total annual pay (TOT = BAS + COM)
Years with the company or seniority (SEN)
Region to which the person is currently allocated (REG)
Gender (GENDER, 0 = female, 1 = male)
Number of contracts written over the past 12 months (CON)

Questions:

4. Is there a significant correlation between job tenure and total pay?

5. How does the result you obtained in Q4 influence the conclusion that you reached in Q3?

6. Are the perceptions measured by the five questions asked in the survey different across the regions? Based on the technique you used to answer this question, what problems / issues surface with respect to the confidence you would have in your results and the alpha level?

7. Are perceptions of management style (autocratic versus democratic) different across the regions and what is the nature of any differences? Based on the technique you used to answer this question, what problems / issues surface with respect to the confidence you would have in your results?
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