Sales Organization Effectiveness Research Articles

Salesforce Control System, Performance Measures and the Business Cycle

Salesforce compensation cost is the major cost of sales organizations and is influenced by sales organizations’ internal as well as external environments. Salesforce control system as an antecedent of compensation can significantly influence salesforce behavior and has significant effects on salesperson performance, sales organization effectiveness and compensation system used by the sales organizations. The “business cycle” is a key variable of external environment influencing performance of sales organizations. Salesforce control systems are different in an environment of strong turbulence from those in an environment of little turbulence. Failure to match the right control system with the sales organization’s internal as well as external environment’s unique context may lead to organizational decline in the long run. This research focuses in this direction and identifies optimal salesforce control system according to different phases of the business cycle.

Compensation and control sales policies, and sales performance: the field sales manager's points of view

PurposeThe purpose of this paper is to analyse the relationship among the compensation system (fixed or commission) applied to salespeople, the system by which they are controlled, and the effects of both on individual performance and sales organization effectiveness. Previous research has been extended in a different country/context, and from the field sales manager's points of view.Design/methodology/approachFirst, a cluster analysis was used to obtain a set of groups of salespeople characterized by their main compensation system (salary and/or commission). Also, ANOVA is used to analyze the significance of the differences due to the different compensation system.FindingsThe empirical data reflect the results of research involving 108 field sales managers and show that the compensation system used for the salespeople has significant effects on individual salesperson performance and sales organization effectiveness and is related to the control system used by the company. Companies with a compensation system based on a fixed salary use behavior control more than companies with a compensation system based on commission; salespeople who receive a greater proportion of compensation as a fixed salary give better individual performance than those who are paid by commission; salespeople who receive a greater proportion of their pay as a fixed salary are more effective than those paid largely by commission. Results do not show relevant differences among countries.Research limitations/implicationsAny generalisation of results is limited by the characteristics of this study, in particular by the sample used and the particular situation of the country analysed (Spain). At the same time, and because the study relies on the subjective judgment of sales field managers' perceptions, the measurement of some concepts is subject to various cognitive biases.Practical implicationsCompensation for salespeople is one of the most important issues in saleforce management as it has a significant effect on motivation, which is critical, given the conditions of their working environment.Originality/valueThis paper analyzes the field sales manager's points of view and not that of the salesperson or the sales team. This provides a closer perspective because field sales managers operate between the salesperson and sales manager. This paper presents a framework based on Baldauf et al.'s and Piercy et al.'s previous research, with two main contributions. The first contribution is the proposed direct analysis of the relationships between various antecedents of effectiveness. The second contribution is the consideration of two dimensions of the effectiveness construct: financial efficacy and field sales manager satisfaction.

Country differences concerning sales organization and salesperson antecedents of sales unit effectiveness

A global perspective on relevant antecedents of sales organization effectiveness is an important research issue. We investigate four antecedents of sales organization effectiveness, including sales unit design, salesperson turnover, organizational commitment, and performance of salespeople, in seven countries. The results provide support for the four hypotheses in the U.K., support for three in Nigeria, two in India, Malaysia, and Saudi Arabia, and one in Bahrain and Greece. This study also examines three groupings of countries based on similarities in political stability and economic wealth, and the extent of differences between ideal and non-ideal values using a configuration theory analysis, providing further support for the four hypotheses, the conceptual framework and the country groupings.

Sales management control level and competencies: Antecedents and consequences

The pursuit of superior salesperson performance and higher levels of sales organization effectiveness is a growing management priority. Management control is an important antecedent to several aspects of salesperson performance and organizational effectiveness. However, prior research has neglected two important issues. First, the impact of market orientation on sales manager control approaches has not been previously considered. Second, sales manager competencies in behavior-based control have not been examined, as research has focused on the level and form of control. Market orientation and the critical sales skills required of salespeople have strong antecedent relationships with sales manager control. Also, sales manager control competencies play a significant role in shaping salesperson performance, and the impact of control competencies is larger than control level. Sales manager control competencies play an important mediating role between sales manager control level and salesperson performance and sales organization effectiveness. Our findings are based on a study of British companies in which five hundred sales managers were sent surveys and 300 usable responses (a response rate of 60%) were returned. Three important implications derived from this study include: (1) sales managers need to translate market orientation into sales force behaviors; (2) control strategy should be aligned with sales force priorities; and (3) time and resources should be invested in training sales managers.

Team performance and control process in sales organizations

PurposeThe purpose of this paper is to present the managerial perspectives of building, nurturing and evaluating sales teams in Mexico. This study discusses the impact of sales team design in reference to the underlying rationale of management control and team coordination as indicators of performance and sales unit effectiveness.Design/methodology/approachThe major focus of the study is to discuss the impact of sales team design and task coordination as predictors of effectiveness of sales unit performance. A sample of 258 respondents has been covered under the study, categorizing them in equal proportion into three broad areas,: type of sales team, type of product market, and type of sales operations. Four industrial streams in sales were covered while selecting the sample respondents: consumer goods, consumer durables, industrial products, and consumer services.FindingsThe study reveals the balance between team designing and team coordination in performing sales. Work environment is largely governed by team coordination effects for the salespeople. Sales team‐building process has a substantial effect on sales organization effectiveness both directly and indirectly through its relationship with salespeople's behavioral performance.Practical implicationsThe results of this study reveal that team performance largely depends on the effectiveness of team coordination, leadership and performance control through behavioral attributes. Sales managers may implement such controls effectively by establishing coordination, training, and feedback process rather than imposing command and control policy.Originality/valueThe thesis of the paper is developed around issues of the cross‐cultural variables and team management affecting workplace environment. The paper explores and maps the symbiosis between cognitive drivers of team members and team culture in performing the tasks.

Sales Management in Developing Countries: A Comparison of Managerial Control Perspectives

ABSTRACT There are two perspectives on controlling the performance of salespeople–an outcome-based perspective and behavior-based perspective. The former process focuses on the objective measures of results while the latter perspective on performance control of salespeople incorporates complex and often subjective assessments of the attributes of sales people. A balance of these implications provides strong support for laying controls and evaluating the performance of sales people in varied sociocultural selling situations. This study has been conducted in two developing countries India and Mexico with varied sociocultural selling situations. The study discusses the impact of sales territory design on these consequences in reference to the underlying rationale of management control, incentive pay, and territory design as predictors of performance, and sales unit effectiveness and attempts to examine the relationships between incentive pay, management control, and their impact on salesperson performance and sales organization effectiveness.

Managerial, organizational, and external drivers of sales effectiveness in export market ventures

The authors extend sales management theory by considering the role of export sales management in small- and medium-sized firms, and they develop an integrated model of export sales organization effectiveness. Specifically, the authors test 16 hypotheses that examine the relationships among export sales management control, export territory, psychic distance, export sales performance, and export sales organization effectiveness. Using a mail-survey approach, data were collected from U.K.-based export sales managers in 146 direct exporters of industrial products. Though certain anomalies are observed, the research findings support many of the hypothesized associations, confirming the robustness of existing sales management concepts and theories in an export-marketing context.

Analysis of Effective Control Practices in Sales Management: A Comparative Study in Developing Countries

There are two perspectives on controlling the performance of salespeople - an outcome based perspective and behavior based perspective. The former process focuses on the objective measures of results while the latter perspective on performance control of salespeople incorporates complex and often subjective assessments of the attributes of sales people. A balance of these implications provides strong support for laying controls and evaluating the performance of sales people in varied socio-cultural selling situations. This study has been conducted in two developing countries in India and Mexico with varied socio-cultural selling situations. The study discusses the impact of sales territory design on these consequences in reference to the underlying rationale of management control, incentive pay, and territory design as predictors of performance and sales unit effectiveness and attempts to examine the relationships between incentive pay and management control and their impact on salesperson performance and sales organization effectiveness.

The effect of moderators on the salesperson behavior performance and salesperson outcome performance and sales organization effectiveness relationships

Salesperson behavior performance is conceptualized as a predictor of outcome performance and sales organization effectiveness. The research considers the effects of salesperson capabilities, industrial/consumer products, and industry growth moderators on salesperson performance and sales organization effectiveness relationships. Empirical analyses are conducted using data from a sample of 174 field sales managers in Austrian sales organizations. The results of moderator regression analyses indicate that salesperson capabilities, product type, and industry growth are relevant moderators. The roles of the moderators vary across the relationships analyzed. Several management and research implications are examined.

A gender perspective on salesperson organizational citizenship behaviour, sales manager control strategy and sales unit effectiveness

Organizational citizenship behaviour (OCB) is discretionary employee behaviour that promotes organizational effectiveness, and has become recognized as an issue of potentially substantial importance in the management of sales operations. Identifies sales management control strategy as an important antecedent to salesperson OCB, which has been neglected in prior OCB research. Uncovers an important gender dimension in the display of OCB by salespeople, not previously investigated, and identifies an important relationship between sales manager gender and the OCB displayed by a sales unit or team, which is associated with the effectiveness of the sales unit. The findings have a number of important implications for managers concerned with enhancing sales organization effectiveness, as well as identifying a number of promising research directions.

Consequences of sales management control in field sales organizations: a cross-national perspective

In this study we explore the effects of behavior-based sales management control on salesperson characteristics, salesperson performance and sales organization effectiveness with data collected from field sales managers in Australia and Austria. Considering this cross-national perspective, knowledge should be added to the limited international sales management literature. The study findings provide strong support for positive relationships between behavior-based control and salesperson characteristics, salesperson outcome performance, and sales organization effectiveness. The results offer encouraging support of the cross-national relevance of the sales management behavior-based control model.

Examining Business Strategy, Sales Management, and Salesperson Antecedents of Sales Organization Effectiveness

The antecedents of sales organization effectiveness are examined in two European countries—Austria and the United Kingdom—adding to the limited international sales management research. Sales management behavior based control strategy, sales territory design, and company strategic orientation are conceptualized as antecedents to salesperson performance and sales organization effectiveness. The strategy dimensions customer value and product-market scope are incorporated into the conceptual model to examine the role of strategic orientation. The results indicate a strong direct relationship between salesperson outcome performance and sales organization effectiveness, as well as important indirect impacts on effectiveness for sales management control strategy, territory design, and salesperson behavior performance. However, the study findings indicate a weak relationship between the strategy dimensions, salesperson performance, and sales organization effectiveness. These findings identify important implications for managers in considering the effectiveness of strategy implementation through sales operations, as well as suggesting a number of important new research directions.

Examining the antecedents of sales organization effectiveness: an Australian study

Examines the impact of manager and salesforce antecedents on sales organization effectiveness, using a sample of 146 Australian sales units. Indicates that sales manager monitoring, directing, evaluating and rewarding activities distinguish between high and low sales unit profitability and managers’ satisfaction with their units. Suggests that sales territory design displays significant differences between high and low sales/market share and unit satisfaction. Discovers that several salesperson characteristics and performance were significantly different between high and low customer satisfaction effectiveness and managers’ satisfaction with sales units. Highlights significant antecedent roles for sales manager and salesforce antecedents of sales organization effectiveness.

Relationships between Sales Management Control, Territory Design, Salesforce Performance and Sales Organization Effectiveness

This research evaluates determinants of sales organization effectiveness in a sample of British companies, and contributes to an important new research stream by following recent empirical studies in the USA and Australia. We discuss a model of sales organization effectiveness determined by salesforce outcome performance and behavioural performance, as well as by the use of a behaviour‐based control approach. Sales territory design is also considered as a particularly important managerial variable, which has received little analytical attention in the traditional literature, but which appears to be an important influence on the effectiveness of the sales operation. Our exploratory path analytical model suggests that sales territory design has a large effect on sales organization effectiveness both directly, and indirectly through its relationship with salesforce behavioural performance. These findings are somewhat different to those in similar studies in other countries, and suggest some important implications for managers as well as for researchers in this field.

Sources of effectiveness in the business‐to‐business sales organization

The significance of the search for sales organization effectiveness is underlined by the major costs represented by the field salesforce for many organizations, and it is heightened by the pressures of global competition and new challenges to develop long‐term customer relationships as the foundation for competitive and sustainable marketing strategies. A study of sales management in British companies adds to an emerging research stream by identifying certain characteristics of superior performance and effectiveness in the business‐to‐business sales organization. We find that conventional measures of salesforce size, call‐rates, costs and productivity reveal relatively little about the differences between more effective and less effective sales organizations and may be dangerously misleading. The hallmarks of effective sales organizations we found to be: balanced compensation strategy; successful salesperson characteristics, in terms of motivation, customer orientation, team orientation, and sales support orientation; high performance in the drivers of sales effectiveness, i.e. sales presentation, technical knowledge, but most particularly adaptiveness, teamwork, sales planning, and sales support; the use of behaviour‐based control approaches involving effective monitoring, directing, evaluating and rewarding activities by sales managers; and, sound organizational structures. The research findings contribute benchmarks to a powerful management agenda to be addressed by executives in pursuing sales organization effectiveness.

Investigating the relationships among sales, management control, sales territory design, salesperson performance, and sales organization effectiveness

A conceptual model is developed and empirically tested, examining the relationships among the sales management control system, sales territory design, salesforce behavior and outcome performance, and sales organization effectiveness constructs. A sample of 58 Australian chief sales executives and 146 field sales managers was used to test the model. The hypotheses based on the conceptual model were tested using LISREL 7. The test result were significant and in the direction hypothesized. Managerial implications and research directions are discussed.

Behavior-Based and Outcome-Based Salesforce Control Systems

The authors develop a conceptual model depicting relationships between salesforce control systems, characteristics, performance, and sales organization effectiveness as a framework for testing the propositions formulated by Anderson and Oliver (1987). The results from a study of 144 diverse sales organizations provide support for the relationship between behavior-based salesforce control systems and specific salesforce characteristics, different salesforce performance dimensions, and sales organization effectiveness. The results imply a limited role for incentive compensation in salesforce control systems. They also suggest the need for a proper blend between field sales management and compensation control and identify important avenues for future research.

Behavior-Based and Outcome-Based Salesforce Control Systems

The authors develop a conceptual model depicting relationships between salesforce control systems, characteristics, performance, and sales organization effectiveness as a framework for testing the propositions formulated by Anderson and Oliver (1987). The results from a study of 144 diverse sales organizations provide support for the relationship between behavior-based salesforce control systems and specific salesforce characteristics, different salesforce performance dimensions, and sales organization effectiveness. The results imply a limited role for incentive compensation in salesforce control systems. They also suggest the need for a proper blend between field sales management and compensation control and identify important avenues for future research.

In Search of Excellent Sales Organizations

Analyses salesforce performance and examines high and low performance Australian sales organizations. Chief sales executives in 99 companies describe their sales organizations′ characteristics, management priorities, salesforce performance and sales organization effectiveness. The companies are divided into two performance groups and compared across 31 salesforce performance activities. Important differences between the high and low performance groups concern expense control, sales presentation effectiveness, and sales results performance of salespeople. Identifies important performing issues and indicates guidelines for improving sales organization performance.