Differences between Presidents’ and Sales Managers’ Perceptions of the Industry Environment and Firm Strategy in Small Industrial Firms: Relationship to Performance Satisfaction

Abstract

The industrial sales force is the primary source of information about the competitive environment. Differences of perceptions of that environment between the national sales manager and the firm president in small industrial firms may reflect inadequate environmental information input into strategic decision‐making. The sales force is a major element in implementation of strategy and differences between perceptions of firm strategy may reflect inadequate coordination and communication between the chief strategy decision‐maker and the manager who is responsible for implementing that strategy in the market place. It would be expected that these differences in perceptions would impact negatively strategy formulation and execution resulting in unsatisfactory firm performance. This study surveyed the environmental and strategy perceptions of presidents and national sales managers in small to medium‐sized industrial firms as well as presidents’ satisfaction with firm profitability and marketing/sales effectiveness. The average absolute difference in environment perceptions has a negative relationship with satisfaction with profit. The average absolute difference in strategy perceptions has a negative relationship with marketing/sales effectiveness. This latter relationship is especially strong in an environment high in capital spending variation and for larger firms. The authors suggest implications for managers based on these results.