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The Consequences of Behaviour Based and Outcome Based Salesforce Control Systems: A Review Based Article
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by Zoha Fatima & M. Khalid Azam
Abstract
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Salesforce is important for sales organizations in generating revenue and building image of the organization among the customers. Organizations are making efforts to improve the productivity of the salesforce and the organization. Ever since the study of Anderson and Oliver (1987), several studies have attempted to highlight the relationship between salesforce control system and its different consequences for salesforce and sales organizations. Taking into consideration the review of studies conducted from the year 1987 till 2016, this paper proposes a comprehensive framework which includes the impact of salesforce control system on salesforce as well as the sales organization. The study contributes to the existing salesforce control literature by finding that salesforce characteristics, salesforce performance, sales territory design and sales organization effectiveness are affected by the salesforce control system that is being used. The study has important implications for sales organizations as well as researchers.
Keywords
Salesforce Control System, Sales Territory Design, Salesforce Characteristics, Salesforce Performance, Sales Organization Effectiveness.
Introduction
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Salesforce is the most important asset for sales organizations as it helps in bringing sales and thus help the organization become a profitable entity. The salesforce contributes not only through sales but also by being a linking pin between the organization and the customers. The reputation of the organization depends upon the behaviour of salesforce. With increasing competition among firms, the importance of salesforce has increased tremendously. Salesforce can be affected by various factors. Therefore, researchers are exploring their impact on salesforce. Fraenkel, Haftor and Pashkevich (2016) examined a set of salesforce management factors that contribute to successful new product launches. It has been noted that out of these many factors, salesforce control system is the most important factor as it is an organization’s set of procedures for monitoring, directing, evaluating and compensating its employees (Anderson & Oliver, 1987).
Taking inferences from theoretical approaches in Economics, Organizational Behaviour, and Psychology, Anderson and Oliver (1987) developed a salesforce control framework and formulated propositions regarding the impact of salesforce control systems on salesforce characteristics and salesforce performance. Ever since their study has been conducted, studies have analysed the impact of salesforce control system on important salesforce consequences. This paper is based on the conceptual framework developed by Anderson and Oliver (1987). The objective of this paper is to provide a comprehensive framework which includes the consequences of salesforce control system for the salesforce as well as for the sales organization based on the review of previous studies. FIIB Business Review, Volume 6 Issue 1, January - March 2017
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Behaviour Based and Outcome Based Salesforce Control System
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Behaviour based control system is characterized by more monitoring of salespeople by management, more managerial direction to direct salespeople and use of subjective and more complex methods based on salesperson’s aptitude and product knowledge, number of calls, their sales strategies to evaluate and compensate the salesforce (Anderson & Oliver, 1987). Salespeople are given a fixed amount of salary. While outcomebased salesforce control system is characterized by less monitoring of salespeople by management, less managerial direction to direct salespeople and use of objective measures of outcomes to evaluate and compensate the salesforce (Anderson & Oliver, 1987). Salespeople are given incentives based on the amount of sales they bring in for the company.
Sales territory design is concerned with sales unit managers’ decisions in allocating customers and prospects, products, geographical areas, and other work responsibilities to each salesperson assigned to the sales unit (Piercy, Low & Cravens, 2011). Babakus, Cravens, Grant, Ingram and LaForge (1996) in their study on 58 chief sales executives and 146 sales managers in Australia revealed that behaviour based salesforce control is positively related with satisfaction of sales managers with their field unit designs. Piercy, Cravens and Morgan (1999) investigated the relationship between satisfaction with sales territory design and salesforce control system. Their study on 144 respondents in 62 different companies revealed that behaviour-based salesforce control in terms of directing and evaluating activities was related to a higher degree of satisfaction with sales territory design. Baldauf and Cravens (1999) proposed a model of sales organization effectiveness. Analyzing data of 159 field sales managers from Austria, they found that sales territory design is of primary importance in organizations that use behaviour based strategies rather than outcome based. The study by Piercy, Low and Cravens (2004b) in three countries of Greece, India and Malaysia also revealed that the greater extent of behaviour based sales management control is positively related with sales manager's level of satisfaction with the sales territory designs for the sales unit. Based on the review studies, following proposition is stated:
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A salesforce control system is an organization’s set of procedures for monitoring, directing, evaluating and compensating its employees (Anderson & Oliver, 1987). Anderson and Oliver (1987) have described and discussed two major types of salesforce control systems: Behaviour based salesforce control system and Outcome based salesforce control system.
Sales Territory Design
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Salesforce Control System
are discussed below to enhance the understanding of the relationship between salesforce control system and its consequences for the salesforce and sales organizations.
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This paper first defines the two kinds of salesforce control system - behaviour based and outcome based salesforce control system. Secondly, it describes the framework for organizing the study. Thirdly, it reviews important studies highlighting the consequences of behaviour based and outcome based salesforce control system. Lastly, the paper concludes with the framework and research implications.
P1: Sales territory design is positively related with behaviour based salesforce control system.
Salesperson Characteristics
Taking into account the variables of salesforce control system, salesforce characteristics, sales territory design, salesforce performance and sales organization effectiveness, articles from various management, marketing, and sales journals from the year 1987 to 2016 have been included for the detailed and critical review.
Cravens, Ingram, LaForge, and Young (1993) in their study on 144 chief sales executives found that behaviour based control system is positively related with team orientation, risk aversion and recognition motivation of salespeople. Examining the consequences of control combinations on selected individual-level variables, Jaworski, Stathakopoulos and Krishnan (1993) found that output control have a positive relationship with job satisfaction and a negative relationship with person-role conflict and role ambiguity. Fatima and Azam (2016b) in a review based article also concluded that outcome control has a negative impact on role conflict and role ambiguity. Robertson and Anderson (1993) in
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Framework for Organizing the Study
Review of Studies
Salesforce control system has an important consequences for salespeople as well as the organization as it has an impact on salesforce ethical behaviour, sales support orientation, customer orientation and salesforce performance (Fatima & Azam, 2016a). Research studies FIIB Business Review, Volume 6 Issue 1, January - March 2017
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Investigating the cognitive and affective components of intrinsic (challenge seeking and task enjoyment) and extrinsic motivation (compensation seeking and recognition seeking) in the sales control context, Miao, Evans and Zou (2007) found that activity control has a positive impact on challenge seeking and recognition seeking while capability control has a positive impact on compensation seeking and task enjoyment. Exploring how salespeople’s OSPCPs influence the effect of salesforce controls on outcomes, Evans, Landry, Li and Zou (2007) found that output control have a positive effect on the OSPCP (organizational sales-related psychological climate perceptions) of sales supportiveness and sales innovativeness while capability control have a positive effect on the OSPCP of sales innovativeness, customer orientation and sales supportiveness. The study by Theodosiou and Katsikea (2007) revealed a positive relationship between behaviour based control system and motivation and attitudes of export sales manager. Matsuo (2009) investigated the impact of salesforce control on sales departments’ innovativeness. The analysis of data of 199 sales managers in Japanese sales departments revealed that behaviour based control were positively related to sales innovativeness while outcome based control has apparently no significant relationship with sales innovativeness.
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Oliver and Anderson (1994) in their study on 347 managers found that the behaviour control philosophies are related to commitment, acceptance of authority, teamwork and review, a lack of extrinsic motivation, a greater interest in serving the agency, participative decision making, less use of pay as a control mechanism, and an innovative and supportive culture. These results suggest that control systems have an impact on thoughts and feelings and certain behaviours of salespeople. Analyzing data of 318 American Marketing Association (AMA) members, Ramaswami (1996) found that both output control and process control are positively associated with dysfunctional behaviour. They defined dysfunctional behaviour as those employee activities that further personal interests but are harmful for the longterm performance of the organization (Jaworski 1988).
relationship between output and process controls and supervisee trust in a new product selling. In their study on 170 salespeople in 250 high-technology firms in China using hierarchical regression analysis, they found that supervisee trust has a positive relationship with process control.
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their study examined the impact of salesforce control system on ethical judgments of salespeople. They found that salespeople subject to a control system that is very structured, i.e., characterized by intense monitoring and supervision and subjective evaluation, are less likely to indulge in an unethical behaviour than are salespeople operating in a more independent, outcome-driven system.
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In their study, Baldauf, Cravens and Piercy (2001b) found positive relationship between behaviour based control system and affects and attitudes (cooperating as a sales team, accepting direction and authority) and intrinsic and recognition motivation. They also found that behaviour based control is related with cognitions, capabilities and behavioural strategies for Austrian sample but not for U.K. sample. Examining the relationship among organizational citizenship behaviour, salesforce control and sales organization effectiveness, Piercy, Lane and Cravens (2002) in their study on 214 salespeople and 35 sales managers revealed that behaviour control is positively associated with salesperson organization citizenship behaviour. Roma´n and Munuera (2005) highlighted the determinants as well as the consequences of salespeople ethical behaviour. In their study on 280 financial services salespeople, they found that behaviour based control system was positively related to salesperson’s ethical behaviour. Piercy, Cravens, Lane and Vorhies (2006) investigated the relationship between salesforce control system, perceived organizational support and organization citizenship behaviour. The study on 214 field salespeople revealed that perceived organizational support and OCB level of salesperson is positively related with behaviour control. Atuahene-Gima and Li (2006) investigated the
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Analyzing data of 94 sales managers using convenience sample, Mallin, Asree, Koh and Hu (2010) found that the trust acts as a mediator in the relationship between uncertainty and behaviour based control. While trust was not found to mediate the relationship between outcome based control and uncertainty. Bergeron, Shipp, Rosen and Furst (2012) investigated the relationship between salesforce control system, task performance and organization citizenship behaviour. Using archival data of 3,680 consultants of a U.S. based firm and conducting hierarchical regression analyses to test the hypotheses, they found that in an outcome-based control system, task performance is more important than organization citizenship behaviour. Wang, Dou, and Zhou (2012) investigated the effect of output, activity, and capability control on salespeople’s customer-directed sales behaviours, which include problem solving and opportunism. Analyzing data of 301 buyer–seller dyads 58
Research P4: Salesforce job satisfaction is positively related with behaviour based salesforce control system. P5: Salesforce job commitment is positively related with behaviour based salesforce control system.
Salesperson Performance
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Salesperson performance is defined as an evaluation of the salesperson’s behaviour in contributing to achieving the organization’s objectives (Churchill, Ford, Hartley & Walker, 1985). Salesperson performance can be categorized into: behavioural performance which focuses on the behaviours carried out by salespeople, and outcome performance which focuses on the results achieved by salespeople (Jaworski & Kohli, 1991). Behavioural performance refers to those activities with which salespeople are involved in performing their job responsibilities (Baldauf, Cravens & Grant, 2002). The components of behavioural performance are adaptive selling, technical knowledge, teamwork, sales presentation, sales planning and sales support (Cravens, Piercy & Low, 2006). Various studies have disaggregated behavioural performance into two interrelated constructs: salesforce non-selling behavioural performance, and salesforce selling behavioural performance (Babakus et al., 1994; Cravens et al., 1993; Piercy et al., 1997). As far as outcome performance is concerned, it is an assessment of the results that can be attributed to the salesperson (Piercy, Low & Cravens, 2004). Outcomes can be in the form of sales, sales growth, market share or new customers (Cravens, Piercy and Low, 2006).
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Miao and Evans (2012a) found that the outcome control directly has a positive effect on selling effort and a negative effect on role conflict while capability control has a positive effect on role ambiguity. Examining the interactive effects, they found that outcome control and capability control together have positive interactive effects on adaptive selling as well as selling effort. Using a data of 195 salesperson- sales manager dyads in US manufacturing industry, Miao and Evans (2012b) found that the effect of activity control as well as outcome control on role ambiguity was negative and significant. Activity control as well as outcome control has a positive effect on salesperson knowledge while capability control has a negative effect. They also found that when capability and outcome control are combined together, they result in enhancing salesperson knowledge as well as intrinsic motivation. Analyzing data of 223 salespeople and investigating the effect of salesforce control system on affective as well as cognitive dimensions of motivation, Miao and Evans (2014) found that outcome control and capability control have positive interactive effects on task enjoyment and recognition seeking (affective components of intrinsic and extrinsic motivation respectively). Crosno and Brown (2014) in meta-analytic review of the effects of organizational control in marketing exchange relationships, found that both output and process control are positively related to performance and trust, satisfaction and commitment. Whereas output control is not significantly related to opportunism, process control is positively related to opportunism. Rodrigues, Coelho and Sousa (2015) examined the impact of salesforce control system on goal orientations of salespeople. Their study on 296 salespeople in a Brazilian bank revealed that behaviour based control positively affects learning orientation while no significant effect was found between output control and learning orientation. The study by Fatima and Azam (2016c) indicated that the salesforce control system is multi-dimensional in nature and has distinct impact on salesperson's cognitive and affective dimensions of intrinsic and extrinsic motivation.
P3: Salesforce intrinsic motivation is positively related with behaviour based salesforce control system.
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via personal interviews in China, they found that output and capability controls interact positively to affect problem solving so that the positive effect of each will be enhanced. While output and capability controls work synergistically to reduce opportunism.
Based on the review studies, following propositions are stated: P2: Salesforce ethical behaviour is positively related with behaviour based salesforce control system.
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Measuring salesforce control system on two dimensions: (1) the extent of monitoring and amount of direction by field sales managers called as FMSC (Field Sales Management Control), (2) Salesforce compensation, called as CC (Compensation Control), the study by Cravens et al (1993) found that FMSC and CC play an important role in improving the selling behavioural performance of a salesforce. As far as salesforce outcome performance is concerned, Cravens et al (1993) found a positive relationship between behaviour based salesforce control system and achievement of sales objective performance. Jaworski et al (1993) investigated the effects of output, process, professional and cultural control. The findings indicate that output controls influenced job performance. Grant and Cravens (1996) investigated the impact of salesforce control system on salesperson performance. Analysis of 146 sales managers from 58 companies
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Ahearne, Rapp, Hughes and Jindal (2010) developed and empirically tested a conceptual model that provides insights into the process of how an organization can use salesforce control systems to improve new product success. Analyzing data of 226 sales representatives of the female health care division and 428 physicians, they found that a behaviour based control system hindered the relationship between salesperson effort and customer product perceptions. They also found that a behaviour based control overcomes the negative effect of salesperson product perceptions on the amount of effort demonstrated. This shows that control systems play an important role in influencing the relationship between salespeople’s perceptions of the new product and the amount of effort they expend in selling the product. Using responses of 223 salespeople, Miao and Evans (2012a) found that activity control, outcome control and capability control do not have direct effects on salesperson performance. Taking reference from Expectancy Theory and Cognitive Evaluation Theory, Miao and Evans (2012b) found that outcome based control has a significant impact on salesperson performance. Saldanha, Hunt, and Mello (2013) proposed a model including a combination of formal and informal controls to improve driver’s operational performance. In their study on 573 driver managers, they found that activity control directly affects operational performance and indirectly affects market performance through its effect on operational performance, while output control has a direct effect on market as well as operational performance. Kim and Tiwana (2014) investigated how formal control influence salesforce performance in the presence of input control and informal control in a salesforce control portfolio. Analyzing data of 120 apparel manufacturers and 94 matching retailers in South Korea, the findings indicate that process control when preceded by high input control improves salesforce performance while outcome control, when preceded by high input control, hampers salesforce performance. Samaraweera and Gelb (2015) investigated the effects of salesforce control system on revenue performance of salespeople. Their meta-analysis of 39 studies involving 6678 respondents from multiple countries showed that both behaviour and output controls have a positive
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Exploring the relationship between the salesforce control system and salesforce performance on 144 field sales managers of 62 companies in U.K., Piercy, Cravens and Morgan (1998) found that behaviour based salesforce control is positively related with behaviour as well as outcome performance. Piercy et. al (1999) explored the relationship between behaviour based control, sales territory design, salesforce performance and sales organization effectiveness. The findings of the study reveal that when behaviour based control system is used, sales managers are more satisfied with higher behavioural and outcome performance of salespeople. Analyzing data of 79 chief sales executives in Austria and U.K., Baldauf, Cravens and Piercy (2001a) found that behaviour based control has a positive impact on salesforce behavioural performance. Baldauf et. al (2001b) found that salespeople working in behaviour based control system display higher behavioural performance. Components of behaviour performance such as adaptive selling, technical knowledge, and teamwork were found to be positively related with behaviour based control. Using data of 102 field sales managers from 47 organizations, Mengue and Barker (2003) found that the use of an incentive plan is positively related to all three dimensions of organizational performance (sales volume, profitability and customer satisfaction).
or behavioural performance of export sales managers. Analyzing data of 300 sales managers in U.K., Piercy, Cravens and Lane (2009) indicated a positive impact of sales manager behaviour based control level on sales manager behaviour based control competencies and salesperson behaviour performance.
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in Australia revealed a positive relationship between behaviour based control and salesforce performance.
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Piercy, Low and Cravens (2004a) in their study on Greece, India and Malaysia found that behaviour performance and behaviour control are positively associated in Greece. Piercy et al (2004b) found that behaviour control indirectly influences effectiveness through behaviour performance and outcome performance in Greece. Evans, Landry, Li and Zou (2007) found that output control had a positive effect on outcome performance of salespeople. Using a sample of 175 salespeople, Miao et al (2007) found that capability control has a negative effect on outcome performance while outcome control has a positive effect on outcome performance. Analyzing data of 210 UK exporters, Theodosiou and Katsikea (2007) found that behavioural performance of export sales managers is positively influenced by behaviour based salesforce control. Analyzing data of U.K.-based export sales managers of industrial products, Katsikea, Theodosiou and Morgan (2007) found no significant impact of behaviour based control on behavioural or outcome performance of export sales managers. In a similar way, they found no significant impact of outcome based control on outcome
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P7: Salesforce outcome performance is positively related with outcome based salesforce control system. Sales Organization Effectiveness Sales organization effectiveness consists of a summary evaluation of overall organizational outcomes (Churchill et al, 1985). Total sales volume, market share, profitability, and customer satisfaction, compared with the major competitor and the sales unit objectives are the most popular measures of sales organization effectiveness. Cravens et al (1993) found no direct effects between salesforce control system and financial dimension of sales organization effectiveness.
In their study of 102 Canadian field sales managers, Barker (2001) found that more effective organizations have a higher salary ratio. The findings also revealed that salespeople in more effective organizations have high motivation, customer orientation, team orientation and sales support orientation and they are more willing to accept direction and authority from their supervisors. These findings emphasize the use of behaviour based control system in more effective sales organizations.
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Oliver and Anderson (1994) stated that the relationship between behaviour based control system and effectiveness is more relevant at the field sales management level than at the salesperson level of the organization because sales managers have more influence on sales unit effectiveness than the salesperson.
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P6: Salesforce behaviour performance is positively related with behaviour based salesforce control system.
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Based on the review studies, following propositions are stated:
performance but also through its impact on satisfaction with territory design. Baldauf and Cravens (1999) proposed a model of sales organization effectiveness. Analyzing data of 159 field sales managers and measuring salesforce control strategy on the dimensions of monitoring, directing, evaluating, and rewarding, they found that behaviour based salesforce control especially in terms of directing activities is associated with sales unit effectiveness. Grant and Cravens (1999) investigated the effect of salesforce performance, sales territory design, salesforce control system, customer relationship strategy and organizational commitment on sales organization effectiveness on 146 field sales managers in 58 Australian sales organizations. The study revealed that sales unit effectiveness was positively related to the use of behaviour based control system. The strongest relationship existed between behaviour based control and profitability dimension of sales organization effectiveness.
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impact on revenue outcomes.
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Analyzing data of 58 chief sales executives and 146 sales managers in Australia, Babakus et al (1996) found that salesforce control system has a positive impact on sales organization effectiveness through its impact on behavioural and outcome performance of salespeople and sales organization design. These findings suggest that salesforce control has an important role to play in affecting sales organization effectiveness.
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In their study, Cravens and Morgan (1997) measured effectiveness on the basis of sales volume, market share, profitability and customer satisfaction relative to each company’s major competitor and also relative to the sales unit’s objectives. They found that the most effective sales organizations pay a high proportion of salary in the range of 75-95 per cent of total compensation. They also found that salespeople engage in sales support activities like providing after sales support and have a sense of accomplishment, sense of personal growth and development, creativity, imaginativeness, stimulation and challenge from their work.
In their study Piercy et al (1999) highlighted that salesforce control has an indirect effect on effectiveness not only through its impact on behavioural and outcome FIIB Business Review, Volume 6 Issue 1, January - March 2017
Measuring salesforce control in terms of monitoring, directing, evaluating and rewarding and examining its consequences, Baldauf, Cravens and Piercy (2001b) found that sales unit effectiveness was impacted positively by behaviour based salesforce control strategy. Piercy, Low & Cravens (2004a) in their study in Greece, India, and Malaysia examining the impact of salesforce control on salesperson performance and sales unit effectiveness, they found incentive pay to be positively related to sales unit effectiveness in India. While in Greece, sales unit effectiveness was found to be impacted by behaviour based control, incentive pay and sales territory design. Analyzing data of 1,000 field sales managers in eight countries of Austria, Greece, Gulf States, India, Israel, Malaysia, Nigeria, and U.K., Cravens, Piercy and Low (2006) revealed positive effects of behaviour based control system on sales organization effectiveness.
Using cluster analysis to analyze data of 108 field sales managers in Spain, Kuster and Canales (2008) found that behaviour based salesforce control system, 61
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Table 1. Consequences of Salesforce Control System
Based on the review studies, following proposition is stated:
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Kuster and Canales (2011) examined the effect of compensation system and control system on individual performance and sales organization effectiveness. In their study on 108 field sales managers in Spain, they found that the companies with a compensation system
Guenzi, Baldauf and Panagopoulos (2014) developed analysed impact of formal and informal sales controls on sales unit effectiveness. Analyzing data of sales managers in a major European Union country, they found that outcome controls and cultural controls directly improve sales unit effectiveness. P8: Sales organization effectiveness is positively related with behaviour based salesforce control system.
Table 1 summarizes the research studies examining the consequences of salesforce control system. The table includes the sample size along with key findings of the studies.
Consequences of Salesforce Control System
Cravens, Ingram, LaForge & Young (1993)
Salesforce characteristics; Salesforce performance; Sales organization effectiveness
Cognitions/capabilities; Affects/attitudes; Motivation; Behavioural strategy; Performance; Job satisfaction; Participative decision making; Pay as a control mechanism; Organizational culture
Sales territory design; Salesperson performance; Sales organization effectiveness
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Babakus, Cravens, Grant, Ingram & LaForge (1996)
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Oliver & Anderson (1994)
Job satisfaction; Person-role conflict; Role ambiguity; Job performance
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Jaworski, Stathakopoulos & Krishnan (1993)
Unethical behaviour
Salesforce Performance; Sales Territory design
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Grant & Cravens (1996) Ramaswami (1996)
Dysfunctional behaviour
Piercy, Cravens & Morgan (1998)
Salesforce performance; Sales Territory Design
Piercy, Cravens & Morgan (1999)
Sales territory design; Salesperson performance; Sales organization effectiveness
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Key Findings
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Study
Robertson & Anderson (1993)
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Examining the relationship between salesforce control and firm performance, Verano-Tacoronte and Melia´n-Gonza´lez (2008) in their study on 108 sales and human resource managers of Spanish firms found that firm outcomes are directly related to behaviour based control. They also found that high levels of behaviour based control is associated with high performance of the firm, in comparison with competitors as well as its own objectives.
based on a fixed salary use behaviour control more than companies with a compensation system based on commission.
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salespeoples’ behaviour performance and salespeople outcome performance have a positive and significant impact on salesforce effectiveness.
Behaviour based salesforce control system was associated with salesforce characteristics and various salesperson behaviour
Salespeople subject to a control system that is very structured are less likely to engage in unethical behaviour
Output controls influence job performance
Behaviour based control affects capabilities, affects/ attitudes and motivation but not sales strategies and performance outcomes When behaviour based sales management control is used, sales managers are more satisfied with their field unit designs and performance of salespeople
The study found a strong link between behaviour based salesforce control system and salesforce behaviour and outcome performance
The study found that both output control and process control are positively associated with dysfunctional behaviour
Behaviour based salesforce control system was positively related with behaviour performance and outcome performance
Behaviour based salesforce control system is positively associated with sales territory design, salesperson behaviour and outcome performance 62
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Salesperson performance
Salesperson characteristics; Salesperson performance; Sales organization effectiveness
Piercy, Cravens & Lane (2001)
Salesperson attitudes and job stress; Salesperson work outcomes
Piercy, Lane & Cravens (2002)
Sales organization effectiveness; Organization citizenship behaviour (OCB)
Piercy, Low &and Cravens (2004b)
Roma´n & Munuera (2005)
Cravens, Piercy & Low (2006)
Miao, Evans & Zou (2006)
Territory design
Ethical behaviour; Saleforce performance; Age; Education
Salesforce characteristics; Salesforce performance; Sales territory design; Sales organization effectiveness
Intrinsic motivation; Extrinsic motivation
Trust; Supervisory, environmental and product factors
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Atuahene-Gima & Li (2006)
Sales territory design; Salesperson performance; Sales unit effectiveness
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Piercy, Low & Cravens (2004a)
Organizational performance
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Menguc & Barker (2003)
Perceived organizational support (POS); Organizational citizenship behaviour (OCB)
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Piercy, Cravens, Lane & Vorhies (2006)
Evans, Landry, Li & Zou (2007)
Theodosiou & Katsikea(2007)
Positive impact of behaviour based salesforce control system was found on salesperson behaviour performance in Austrian sample
Behaviour based salesforce control system is positively associated with salesperson characteristics (intrinsic motivation), salesperson outcome performance, salesperson behaviour performance and sales organization effectiveness
Behaviour based salesforce control system is positively related to job involvement, job satisfaction and organization commitment and negatively related to role ambiguity and propensity to leave
Behaviour based control system is positively associated with salesperson OCB
The use of incentive pay is positively related to organization performance
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Baldauf, Cravens & Piercy (2001b)
Behaviour based sales management control strategies are associated with higher levels of sales unit effectiveness
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Baldauf, Cravens & Piercy (2001a)
Sales organization effectiveness; Salesforce performance; Salesforce characteristics; Territory design
The study revealed that sales unit effectiveness was positively related to the use of behaviour based control system
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Baldauf & Cravens (1999)
Salesforce performance; Territory design; Customer relationship strategy; Organizational commitment
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Grant & Cravens (1999)
Organizational customer orientation; Sales supportiveness; Sales innovativeness
A greater extent of behaviour based control is associated with higher behaviour performance in Greece
Behaviour control was positively associated with territory design in Malaysia
Behaviour based control system was positively related to salesperson’s ethical behaviour
There are positive effects of behaviour control. Sales management control processes and their consequences are converging in countries around the world
Activity control has a positive impact on recognition seeking (the affective dimension of extrinsic motivation), whereas capability control has a positive relationship with compensation seeking (the cognitive dimension of extrinsic motivation
Process control has a significantly positive relationship with supervisee trust
Behaviour based control activities have a positive impact on POS and the level of salesperson OCB
Output controls has a positive and significant effect on outcome performance
Salesperson performance; Motivation; Attitudes Behaviour based salesforce control has a positive effect on export sales manager’s motivation and attitudes as well as on export sales manager’s behavioural performance
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Research Katsikea, Theodosiou & Morgan (2007)
Sales performance; Sales organization effectiveness
Verano-Tacoronte & Melia´n-Gonza´lez (2008)
Uncertainty; Risk preferences; Salesforce performance
Behaviour based salesforce control has no significant influence on export sales managers’ behavioural performance or outcome performance. Outcome based salesforce control has no significant influence on export sales managers’ outcome performance or behavioural performance
Behaviour based control is directly related to salesforce performance
Piercy, Cravens & Lane (2009)
Market orientation; Sales manager control competencies; Salesforce performance; Sales organization effectiveness
Mallin, Asree, Koh & Hu (2010)
Trust; Intrinsic motivation; Extrinsic motivation Sales manager’s knowledge of the salesperson was positively related to managerial trust in the salesperson and the use of behaviour based salesforce control system
Customer product perceptions; Salesperson product perceptions
Miao & Evans (2012a)
Adaptive behaviour; Selling effort; Role ambiguity; Role conflict; Salesforce performance
Wang, Dou, & Zhou (2012)
Saldanh, Hunt, & Mello (2013)
Organizational citizenship behaviour (OCB); Task performance; Job performance
Tiwana (2014)
Samaraweera & Gelb (2015)
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Capability and outcome control styles have positive combinatory effects that enhance salesperson knowledge and intrinsic motivation
Task performance is more important than OCB in an outcome based control system
Output and capability controls interact positively to affect problem solving
Salesperson motivation; Sales performance; Job satisfaction
Sales control systems have interactive effects on intrinsic and extrinsic motivation which affect sales performance and job satisfaction
Market Performance; Operational Performance; Perceived Organizational Support Salesforce performance; Performance ambiguity
Performance; Trust; Satisfaction; Commitment; Opportunism
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Crosno & Brown (2014)
High level of capability control, outcome control is positively related to adaptive selling behaviour and selling effort
Problem solving; Opportunism; Customer relationship satisfaction
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Miao & Evans (2014)
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Bergeron, Shipp, Rosen & Furst (2012)
Salesperson performance; Knowledge; Role ambiguity; Intrinsic motivation
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Miao & Evans (2012b)
Behaviour based control system overcomes the negative effect of salesperson product perceptions on the amount of effort demonstrated
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Ahearne, Rapp, Hughes & Jindal (2010)
Behaviour based control were positively related to sales innovativeness
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Innovativeness of sales department; Salesforce performance
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Matsuo (2009)
A strong, significant positive relationship was found between sales manager behaviour based control level and salesperson behaviour performance
Performance
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Activity control directly affects operational performance and market performance
Process control when preceded by high input control improves salesforce performance
Both output and process control are positively related to performance and trust, satisfaction and commitment
Both behaviour and output controls have a positive impact on revenue outcomes
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Research Consequences of salesforce control system Professional Competence
Motivation
Salesforce Characteristics
Figure 1. Consequences of Salesforce Control System
Outco me Based
Salesforce Control System
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It is clear that research studies have considered the impact of salesforce control system on more than one variable. Out of total 39 articles considered for this review, 4 studied the impact of salesforce control system on sales territory design, 21 on salesforce characteristics, 20 on salesforce performance and 9 on sales organization effectiveness. Figure 2 shows the framework for salesforce and organizational consequences of salesforce control systems.
Behaviour Based
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Sales organization effectiveness
Conclusion
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The consequences of salesforce control system that have been taken into account in the previous studies can be broadly categorized into sales territory design, salesforce characteristics, salesforce performance and sales organization effectiveness. Studies have considered the impact of salesforce control system on various characteristics like team orientation, risk aversion, intrinsic, extrinsic and recognition motivation, role conflict, role ambiguity, ethical judgment, commitment, acceptance of direction and authority, greater interest in serving the agency, participative decision making, dysfunctional behaviour, organization citizenship behaviour, ethical behaviour, supervisee trust, sales innovativeness, customer orientation, sales supportiveness, task performance, problem solving, selling effort, salesperson knowledge, satisfaction and opportunism. As far as salesforce performance is concerned, studies have disaggregated it into salesforce selling, non-selling and outcome performance and have studied the impact of salesforce control system on them. The review of studies revealed that behaviour based salesforce control system has more positive consequences for salespeople and sales organizations in terms of its impact on sales territory design, salesforce characteristics, salesforce performance and sales
FIIB Business Review, Volume 6 Issue 1, January - March 2017
Customer Orientation
Behavioural Performance
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Salesforce characteristics
Salesforce Performance
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Sales territory design
Sales Support
Selling Behavioural Performance Nonselling Behavioural Performance
Outcome Performance
Sales Organization Effectiveness Sales Territory Design
Figure 2. Consequences of Salesforce Control System : Framework
organization effectiveness than outcome based salesforce control system.
Implications
Salesforce control system in sales and marketing has received substantial attention by researchers during the past three decades, indicating the importance of salesforce control for researchers as well as sales organizations. This study holds important implications for sales organizations as they can know what aspects of salesforce and ultimately sales organizations are affected by salesforce control system. As far as the implications for researchers are concerned, this study will give them the opportunity to expand their existing knowledge base.
Directions for Future Research
The paper highlights the consequences of salesforce control system for salesforce and the sales organizations. Future researches can contribute to the existing literature by taking into account the impact of salesforce control system on other aspects of salesforce performance like customer satisfaction and customer retention. Moreover, this paper opted a review approach 65
Research
Anderson, E., & Oliver, R. L. (1987). Perspectives on behavior-based versus outcome-based salesforce control systems. Journal of Marketing, 51(4), 76–88 Atuahene-Gima K., & Li, H. (2006). The effects of formal controls on supervisee trust in the manager in new product selling: Evidence from young and inexperienced salespeople in China. Journal of Product Innovation Management, 23, 342–358
Fatima, Z., & Azam, M. K. (2016a). Salesforce control system and ethical behaviour: A review based article. Asian Journal of Marketing, 10 (1-3), 1-7
Fatima, Z., & Azam, M. K. (2016b). Effect of salesforce control system and supervisory behaviour on role conflict and role ambiguity of salespeople: A review of studies. AIMA Journal of Management & Research, 10, 4/4.
Fatima, Z., & Azam, M. K. (2016c). A study of salesforce control systems and salesforce motivation. The Marketing Review, 16, 4, Winter, 357-371
Fraenkel, S., Haftor, D. M., & Pashkevich, N. (2016). Salesforce management factors for successful new product launch. Journal of Business Research, 69, 5053–5058
Grant, K., & Cravens, D. W. (1996). Examining Sales Force Performance in Organizations That Use Behavior- Based Sales Management Processes. Industrial Marketing Management, 25 (5), 331-371
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Babakus, E., Cravens, D. W., Grant, K., Ingram, T. N., & LaForge, R. W. (1996). Investigating the relationships among sales, management control, sales territory design, salesperson performance and sales organization effectiveness. International Journal of Research in Marketing, 13, 345–363
Evans, K. R., Landry, T. D., Li, P. & Zou, S. (2007). How sales controls affect job – related outcomes: The role of organizational sales – related psychological climate perceptions. Journal of the Academy of Marketing Science, 35, 445–459
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Ahearne, M., Rapp, A., Hughes, D. E., & Jindal, R. (2010). Managing Sales Force Product Perceptions and Control Systems in the Success of New Product Introductions. Journal of Marketing Research, XLVII, 764–776
Crosno, J. L., & Brown, J. R. (2014). A meta-analytic review of the effects of organizational control in marketing exchange relationships. Journal of the Academy of Marketing Science, 43(3), 297-314
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Author Profile
Saldanha, J. P., Hunt, C. S., & Mello, J. E. (2013). Driver Management That Drives Carrier Performance. Journal of Business Logistics, 34 (1): 15–32 Samaraweera, M., & Gelb, B. D. (2015). Formal salesforce controls and revenue production: a meta-analysis, Journal of Personal Selling & Sales Management, 35:1, 23-32
Theodosiou, M., & Katsikea, E. (2007). How management control and job-related characteristics influence the performance of export sales managers. Journal of Business Research, 60, 1261-1271
Verano-Tacoronte, D., & Melia´n-Gonza´lez, S. (2008). Human resources control systems and performance: the role of uncertainty and risk propensity. International Journal of Manpower, 29, 2, 161-187
Wang, G., Dou, W., & Zhou, N. (2012). The interactive effects of salesforce controls on salespeople behaviours and customer outcomes. Journal of Personal Selling & Sales Management, 32, 2, 225–243
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Ms. Zoha Fatima is a research scholar at Department of Business Administration, Faculty of Management Studies and Research, Aligarh Muslim University, Aligarh. She is doing her research in the area of Marketing Management. Her PhD topic deals with the implementation of salesforce control system in Pharmaceutical companies in India. She can be reached at
[email protected].
Dr. M. Khalid Azam is a senior Professor at Department of Business Administration, Faculty of Management Studies and Research, Aligarh Muslim University, Aligarh. After post graduating in commerce he earned his M.B.A (Marketing) and Doctorate in the area of Management Control Systems. He has more than thirty years of experience in teaching. His areas of interest include Sales, Retail, Research Methodology and Financial Management. He has numerous publications to his credit both in national as well as international journals. He can be reached at
[email protected].
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