Industrial sales management: A case for MBO

Abstract

The system of management by objectives (MBO) is a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual's major area of responsibility in terms of the results expected of him, and use these measures as guides for operating the firm and assessing the contribution of each of its members (Odiorine, 1965; Mali, 1972; Reddin, 1971; and Carroll and Tosi, 1973). Those who manage by objectives place primary emphasis on direction of efforts, and the evaluation of results (Varney, 1972). Etzel and Ivancevich (1974) have indicated several areas in marketing which can benefit from the MBO procedure, including sales management, advertising, market research, new product development, and physical distribution. This article focuses on one of these areas-sales management. The unique characteristics and activities of salesmen and sales managers demand a flexible tool of evaluation; one that can operate within a system that does not permit close “on the job” supervision. The procedures of MBO offer an evaluation blend that is well tailored to this type of situation. This article has three objectives. First, some of the specific problems and needs of industrial sales management are examined. Second, suggested MBO procedures for industrial sales management are outlined. Finally, a discussion on how MBO can operationally deal with the problems and needs of industrial sales management are presented.