CONTENTS
JSMAM VOLUME 10 , NUMBER 1
- WINTER 2010
From the Editor
by Dan C. Weilbaker, Ph.D.
7
ACADEMIC ARTICLES
Perceived Organizational Support and the Seven Facets of Salesperson Job
Satisfaction
8
By Brian Rutherford, James S. Boles, G. Alexander Hamwi and Leann G. Rutherford
Antecedents and Consequences of the Conflict Between the Marketing and
Sales Departments
21
By George J. Avlontis, Konstantinos Lionakis, and Nikolaos G. Panagopoulos
APPLICATION ARTICLES
How to Approach the Complexity of Negotiations
33
By Brian J. Dietmeyer
From Checkers to Chess: Positioning-to-Win™ in Complex Selling
Environments
40
By Curtis Brooks
Mission Statement
The main objective of the journal is to provide a focus for collaboration
between practitioners and academics for the advancement of application,
education, and research in the areas of selling and major account management.
Our audience is comprised of both practitioners in industry and academics
researching in sales.
©2010 By Northern Illinois University. All Rights Reserved. ISSN: 1463-1431
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Winter 2010
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EDITORIAL AND ADMINISTRATIVE STAFF
EDITOR—Dan C. Weilbaker, Ph.D.
McKesson Pharmaceutical Group
Professor of Sales
Department of Marketing
Northern Illinois University
dweilbak@niu.edu
EUROPEAN EDITOR—Kevin Wilson
Sales Research Trust
Peyrenegre
47350 Labretonie
France
Kevin@sales-research-trust.org
ASSISTANT—Joey Lata
Administrative Assistant
Professional Sales Program
Department of Marketing
Northern Illinois University
jlata@niu.edu
Vol.. 10 No. 1
Journal of Selling & Major Account Management
EDITORIAL BOARD
Ramon A. Avila
Ball State University
Terri Barr
Miami University—Ohio
Jim W. Blythe
University of Glamorgan
Pascal Brassier
ESC Clermont - Graduate School of Management
Steven Castleberry
University of Minnesota—Duluth
William L. Cron
Texas Christian University
Laura Cuddihy
Dublin Institute of Technology
René Y. Darmon
ESSEC Business School
Dawn R. Deeter-Schmelz
Ohio University
Bill Donaldson
Aberdeen Business School
Sean Dwyer
Louisiana Tech University
Paolo Guenzi
SDA Bocconi
John Hansen
University of Alabama—Birmingham
Jon M. Hawes
Indiana State University
Earl D. Honeycutt
Elon University
Thomas N. Ingram
Colorado State University
Mark C. Johlke
Bradley University
Buddy LaForge
University of Louisville
Terry W. Loe
Kennesaw State University
Northern Illinois University
Daniel H. McQuiston
Butler University
Peter Naude
Manchester Business School
Stephen Newell
Western Michigan University
Nikolaos Panagopoulos, Ph.D.
Athens University of Economics & Business
Robert Peterson
Northern Illinois University
Nigel F. Piercy
University of Warwick
Richard E. Plank
University of South Florida, Lakeland
Ellen Bolman Pullins, PhD
University of Toledo
David Reid
Bowling Green State University
Gregory A. Rich
Bowling Green State University
Rick Ridnour
Northern Illinois University
Elizabeth Rogers
Portsmouth Business School
Charles Schwepker, Jr.
Central Missouri State University
C. David Shepherd
Georgia Southern University
William A. Weeks
Baylor University
Michael R. Williams
Oklahoma City University
John Wilkinson
University of South Australia
Frederick Hong Kit Yim
Hong Kong Baptist University
Winter 2010
From the Editor
The Journal of Selling & Major Account Management is gaining wider
acceptance. I am pleased to announce that in addition to all of our paid
subscribers, the Journal of Selling & Major Account Management is now distributed to
all University Sales Center Alliance (USCA) schools as well as to all paid
members of the Global Sales Science Institute (GSSI). Thus we are now
distributed throughout the US, Europe, Japan and Australia.
In addition to submitting academic articles, I want to encourage faculty that do
research in sales and sales management with practical applications for
salespeople or sales managers to submit articles for review. Any article submitted
for the Application Section of the journal which does not go through the academic review
process (double blind reviews). The Application articles are reviewed by the editor, who may
offer suggestions for improvement.
In this issue, the first academic article looks at the relationship between perceived organizational
support (POS) and a variety of issues that may impact job satisfaction for the salesperson. Only
nine of the proposed relationships were significantly related.
The second academic article comes from Greece. The authors examine potential antecedents and
consequences of conflict between sales and marketing. This topic is very timely in that there is a
lot of work being done now on the conflict/cooperation between sales and marketing.
The first application article provides more details from an author we have published before. This
refined approach to negotiating seeks to show that complex negotiations can be handled in a
logical and systematic way.
The final application article is from a new author to the journal and it provides a thought
provoking topic regarding selling in a complex environment. The article suggests that companies
need to change the way in which they approach the sales process in these situations. As the title
suggests, people need to change the way in which they ―play the game‖ so that they can more
effectively meet the needs of the customer.
Our continued thanks also go to the University Sales Center Alliance for their financial support to
help the journal while we build our subscriber base. Our thanks also go to the dedicated members
of the Editorial Review Board and our ad hoc reviewers.
Dan C. Weilbaker, Ph.D.
Editor, The Journal of Selling & Major Account Management,
McKesson Pharmaceutical Group Professor of Sales,
Northern Illinois University
Vol.. 10 No. 1
8
Journal of Selling & Major Account Management
Perceived organizational support and the seven facets
of salesperson job satisfaction
By Brian Rutherford, James S. Boles, G. Alexander Hamwi, and Leann G. Rutherford
This study advances our understanding of perceived organizational support‘s impact on multi-faceted
salesperson job satisfaction. This topic is important for several reasons. First, the linkages between
perceived organizational support and multi-faceted salesperson job satisfaction have not been firmly
established in the existing literature. Second, firms have the ability to control the level of organizational
support that they provide to their employees. Hence, this construct is managerially relevant to firms if it
has the ability to impact aspects of job satisfaction. In addition to perceived organizational support, four
other antecedents related to multi-faceted job satisfaction were examined. In total, six of the seven facets
of job satisfaction were predicted by one or more of the antecedent constructs. Further, perceived
organizational support was found to be positively related to five of the seven facets of job satisfaction.
INTRODUCTION
Firms that are able to build a satisfied sales force
experience higher levels of salesperson
organizational commitment (Johnston et al.,
1987; Brown and Peterson, 1993; Boles et al.,
2007) and decreases in salesperson turnover
(Jaramillo et al., 2006; Mulki et al., 2006;
Honeycutt et al., 2009; Rutherford et al., 2009).
Further, job satisfaction can be indirectly linked
to salesperson performance through
organizational commitment (Mowday et al.,
1982; Brown and Peterson, 1993). For these
reasons, understanding methods to increase
salesperson job satisfaction influences both cost
savings and revenue production for
organizations. Given the impact of job
satisfaction, the importance of research focusing
on methods to increase salesperson job
satisfaction is critical to aid firms in increasing
their chance for long-term success.
Considering the importance of salesperson job
satisfaction, sales research has focused
considerable attention on the antecedents of job
satisfaction. However, most of this research
examines job satisfaction as a global or single
faceted construct (e.g. Jaramillo et al., 2006;
Mulki et al., 2006). According to Churchill et al.
(1974), global measures of job satisfaction fail to
Northern Illinois University
provide an accurate and full assessment of
satisfaction -- providing, firms looking to
increase specific aspects of job satisfaction with
an incomplete assessment of methods to increase
individual facets of job satisfaction. Given the
limitations of global measures of job satisfaction,
researchers have developed measures (Smith et
al., 1969; Churchill et al., 1974; Wood et al.,
1986) that examine job satisfaction as a multifaceted construct. Further a limited stream of
research has been developing to assess both
antecedents (e.g. Boles et al., 2003; Rutherford et
al., 2009) and outcomes of multi-faceted job
satisfaction (Russ and McNeilly, 1995; Boles et
al., 2007; Rutherford et al., 2009).
While this stream of research is emerging, it is
still within its infancy stage. Further, research on
global job satisfaction has identified a construct,
perceived organizational support (hereafter
POS), which has a major impact on global job
satisfaction (Babakus et al.,1996; Piercy et al.,
2006). For firms looking to increase aspects of
job satisfaction, a further understanding about
how POS acts as an antecedent of multi-faceted
job satisfaction would potentially provide
organizations a direct and controllable method to
increase specific aspects of salesperson job
satisfaction.
Academic Article
The purpose of this study is to examine the
impact that salespeople‘s perceptions of
organizational support has on multi-faceted job
satisfaction when controlling for other
constructs which have been linked to multifaceted job satisfaction. Specifically, this study
will control for work-family conflict, role
ambiguity, role conflict (Boles et al., 2003), and
emotional exhaustion (Rutherford et al., 2009).
Organizational Support Theory will be used as
the theoretical foundation.
Organizational Support Theory
The foundation of Organizational Support
Theory is based on the assumption that trading
positive outcomes between employees and the
firm enhances the employee-organization
relationship (Eder and Eisenberger, 2008). The
theory suggests that throughout their work
careers, employees look to both the organization
for which they work and the individuals within
that organization for feedback on a variety of
topics (Rosen et al., 2006). According to
Eisenberger et al. (1986), employees form global
beliefs concerning the extent to which the
organization feels their contribution is valuable
and cares about their well-being. These beliefs
then lead the employee to attempt to determine
the motives underlying the organization‘s
behavior (Eisenberger et al. 1986).
Construct Overview
Churchill et al. (1974: 255) defines salesperson
job satisfaction as, ―all characteristics of the job
itself and the work environment which industrial
salesmen find rewarding, fulfilling and satisfying;
or frustrating and unsatisfying.‖ Within Churchill
et al.‘s measurement of job satisfaction, seven
facets of job satisfaction were developed
(satisfaction with: supervisor, job, policy,
promotion, pay, coworkers, and customers).
POS is the general belief concerning the extent
to which the organization values employees‘
contributions and cares about their well-being
(Eisenberger et al., 1986). This support typically
develops over time through multiple interactions
Winter 2010 9
between employees and their employers
(Eisenberger et al., 1990). POS influences
organizational productivity, as it is associated
with decreased absenteeism (Eisenberger et al.,
1986) and reduced employee turnover
(Eisenberger et al., 2002).
Work-family conflict is a form of inter-role
conflict in which ―the role pressures from the
work and family domains are in some respect
incompatible‖ (Greenhaus and Beutell, 1985: 76).
Work-family conflict results from trying to meet
an overabundance of conflicting demands from
both domains (Netemeyer et al., 1996).
Role stressors create psychological anxieties
which negatively influence functional work
outcomes (Singh et al., 1994). When examining
role stress, researchers typically examine two
constructs: role ambiguity and role conflict. Role
ambiguity is the extent to which an individual is
unclear about the role expectations of others, as
well as the degree of uncertainty associated with
one‘s role performance (Rizzo et al., 1970). Role
conflict is the degree that expectations of a role
are incompatible or incongruent with the reality
of the role (Rizzo et al., 1970).
Maslach and Jackson define emotional
exhaustion as, ―the feeling of being emotionally
overextended and exhausted by one‘s
work‖ (1981: 101). It often occurs when
individuals are facing exorbitant demands on
their time and energy. Emotionally exhausted
workers often feel helpless, lose self-esteem, feel
a lack of accomplishment and develop negative
attitudes about customers, the organization, their
job and themselves (Cordes and Dougherty,
1993).
HYPOTHESIS DEVELOPMENT
Perceived Organizational Support
According to Jolke (2007), research addressing
POS within a sales context is far less developed
than in other work environment settings. While
sales force research examining POS is limited, a
strong positive relationship has been identified
Vol. 10, No. 1
10
Journal of Selling & Major Account Management
between POS and global job satisfaction (e.g.
Shore and Tetrick, 1991; Eisenberger et al., 1997;
Babakus et al., 1996; Piercy et al., 2006). For
example, Babakus et al. (1996) found a
significant and positive relationship between
POS and job satisfaction when examining a large
international sales force. Further, Piercy et al.
(2006) in an examination of a commercial
directory publisher‘s sales force found that POS
is related to job satisfaction. Given that the sales
literature supports a relationship between POS
and global job satisfaction, logically certain
aspects of multi-faceted job satisfaction would
be predicted by POS. However, given the lack of
research on POS and multi-facets job satisfaction
within the literature, exploratory linkages will be
examined in relation to all seven facets of job
satisfaction.
H1: Perceived organizational support will be positively
related to satisfaction with (a) supervisor, (b) job, (c)
policy, (d) promotion, (e) pay, (f) coworkers, and (g)
customers.
Established Linkages
While POS has not been linked to multi-facets
salesperson job satisfaction, an emerging body of
literature has looked at other constructs as
predictors of multi-faceted job satisfaction.
Specifically, research by Boles et al. (2003) and
Rutherford et al. (2009) established linkages
between multi-faceted job satisfaction and 1)
work-family conflict, 2) role ambiguity, 3) role
conflict, and 4) emotional exhaustion. A brief
review of each research article is provided and
the results from both studies are used to build
hypotheses.
The Boles et al. (2003) study examined
antecedents to multi-faceted job satisfaction.
They allowed that work-family conflict, role
ambiguity, and role conflict had been linked to
global job satisfaction. To expand the knowledge
base, they examined how work-family conflict,
role ambiguity, and role conflict impacted the
seven facets of salesperson job satisfaction.
Based on the results of the Boles et al. (2003)
Northern Illinois University
study, the following hypotheses are formed:
H2: Work-family conflict will be negatively related to
satisfaction with (a) supervisor, (b) policy, (c) promotion,
and (d) pay.
H3: Role ambiguity will be negatively related to
satisfaction with (a) job, (b) policy, (c) promotion, and (d)
coworkers.
H4: Role conflict will be negatively related to satisfaction
with (a) job, (b) policy, (c) promotion, and (d) coworkers.
Rutherford et al. (2009) primarily focused on the
impact of multi-faceted job satisfaction in
relation to both organizational commitment and
propensity to leave. However, the study also
examined emotional exhaustion as a predictor of
multi-faceted job satisfaction. When looking at
the linkages between emotional exhaustion and
multi-faceted job satisfaction, five significant
linkages were found. However, their study only
examined the linkages based on a correlation
matrix and failed to consider other antecedent
variables. Hence, the significance of the impact
of emotional exhaustion on multi-faceted job
satisfaction may be reduced or possibly
eliminated after examining other antecedent
variables. The following hypothesis is proposed
based on the Rutherford et al. (2009) study:
H5: Emotional exhaustion will be negatively related to
satisfaction with (a) supervisor, (b) job, (c) policy, (d)
promotion, and (e) pay.
METHODOLOGY
Sample
Salespeople of a national business-to-business
firm providing business services were surveyed.
There were 152 surveys distributed. Of the 152
distributed, 126 were returned in usable format
after list-wise deletion. The effective response
rate was 83 percent. The response rate is higher
than most sales-related research for two reasons.
First, management provided a cover letter for the
research project asking that their salespeople take
the time to complete the survey and indicating
that the information being collected was
Winter 2010 11
Academic Article
important to the firm in guiding future sales
force decisions. In addition, there was a random
drawing to give away two $100 gift certificates.
If a person returned a completed survey, they
were automatically entered in the drawing unless
they chose to not participate in the drawing.
Surveys were returned directly to the research
team and managers in the firm never saw the
completed surveys. Of the 126 respondents, 88
were males and 38 were females. The average
respondent had worked for the firm just under 3
years and was 32 years of age.
Measurement
All constructs in this study were assessed using
scales from previous organizational research.
The seven facets of job satisfaction were
measured using 28 items from the original
INDSALES scale proposed by Churchill et al.
(1974). This reduced version of the INDSALES
scale is well established within the sales literature
(Comer et al., 1989; Lagace et al., 1993).
Salesperson responses were assessed using 7point Likert-type items, where smaller numbers
indicate less satisfaction.
Scale reliabilities
were .82 for satisfaction with the supervisor, .86
for satisfaction with job, .71 for satisfaction with
policy, .81 for satisfaction with promotion, .70
for satisfaction with pay, .74 for satisfaction with
co-workers and .67 for satisfaction with
customers. Role conflict and role ambiguity
were assessed using the 8-item and 6-item
measures developed by Rizzo et al. (1970). Items
were measured from 1 being ―never‖ to 7 being
―always‖. All items used to measure role
ambiguity were reversed coded as recommended
by Rizzo et al. (1970). The alphas were .80
and .83, respectively. Work-family conflict was
assessed using the 8-item measure (alpha = .82)
developed by Burke et al. (1976) with 1 being
―strong negative impact‖ to 5 being ―strong
positive impact. Items in this scale were all
reversed coded. Emotional exhaustion, the core
dimension of burnout, was assessed using the 8item measure (alpha = .90) with 0 being ―never‖
and 6 being ―everyday.‖ The scale is based on
work from Maslach and Jackson‘s (1981)
burnout inventory. POS was assessed using the
16-item measure (alpha = .93) developed by
Eisenberger et al. (1986). Items were measured
on a 7-point Likert-type scale from 1 being
―strongly disagree‖ to 7 being ―strongly agree.‖
Table 1 provides correlations, reliabilities, means,
and standard deviations.
Analysis
Data were analyzed using stepwise regression.
According to Hair et al. (2006), regression is a
preferred method over structural equation
modeling for the current study because of: 1) the
limited sample, 2) the number of linkages
examined within the model, 3) the number of
items used to measure the constructs (60), and 4)
the exploratory nature of the POS to job
satisfaction linkages. Further, the use of
regression over structural equation modeling is
consistent with research examining multi-faceted
job satisfaction (e.g. Boles et al., 2003;
Rutherford et al., 2009; Ladik et al., 2002; Russ
and McNeilly, 1995).
RESULTS
The first regression equation focused on
predicting salesperson satisfaction with the
supervisor. Specifically, POS (H1a), work-family
conflict (H2a), and emotional exhaustion (H5a)
were tested as possible antecedents. Results
indicate that work-family conflict is significantly
related to satisfaction with the supervisor
(unstandardized beta is the first number followed
by the standardized beta; = -.763, -.353, p.
< .05). Results failed to support that satisfaction
with the supervisor is predicted by emotional
exhaustion (p. > .05) or POS (p. > .05). R2
equaled .125. Overall, findings support H2a, but
fail to support H1a and H5a (see Table 2).
The second regression equation focused on POS
(H1b), role ambiguity (H3a), role conflict (H4a)
and emotional exhaustion (H5b) as potential
antecedents of satisfaction with the job. Results
of the analysis indicate that POS is significantly
related to satisfaction with the job (.597, .615, p.
< .05). Results did not find a significant
Vol. 10, No. 1
12
Journal of Selling & Major Account Management
Table 1: Correlations, Reliabilities, Means, and Standard Deviations
X1
Satisfaction with
Supervisor (X1)
X2
X3
X4
X5
X6
Satisfaction with
Job (X2)
.82
.277
**
Satisfaction with
Policy (X3)
.371
**
.434
**
.71
Satisfaction with
Promotion (X4)
.318
**
.384
**
.498
**
.81
Satisfaction with
Pay (X5)
.135
.182
*
.307
**
.293
**
.70
Satisfaction with
Coworkers (X6)
.484
**
.467
**
.443
**
.213
**
.135
.74
Satisfaction with
Customers (X7)
.269
**
.194
*
.234
**
.005
.004
.276
**
.353
**
.257
**
.213
**
.220
**
.284
**
.402
**
.435
**
.382
**
.575
**
.525
**
.442
**
.510
**
.376
**
.430
**
.455
**
.374
**
.209
**
.230
**
.166
*
.227
**
.268
**
.277
**
.286
**
.186
*
Perceived Organizational
Support (X12)
.289
**
.615
**
.580
**
.555
**
.255
**
Means
4.95
5.60
4.86
4.54
Standard
1.19
.95
1.02
1.28
Work-Family
Conflict (X8)
Role Conflict
(X9)
Role Ambiguity
(X10)
Emotional Exhaustion (X11)
X8
X9
X10
X11
X12
.86
** Correlation is significant
at the 0.01 level
Northern Illinois University
X7
.67
.180
*
.82
-0.1
.470*
*
.80
-.128
.359*
*
.546*
*
.83
.166
*
.551*
*
.589*
*
.437*
*
.90
.468
**
.082
.517*
*
.538*
*
.561*
*
.424
**
.93
4.40
5.21
4.84
2.64
3.06
2.40
2.16
4.96
.97
.93
.73
.55
.79
.81
1.17
.98
* Correlation is
significant at the
0.05 level
Reliabilities are on
the diagonal
Winter 2010 13
Academic Article
Satisfaction
with:
Table 2: The Results
WorkRole
Family
Ambiguity
Conflict
Supervisor
Perceived
Organizational
Support
NSb
Job
.597 a
p. < .05
---
NSb
NSb
NSb
.378
Policy
p. < .05
.313 a
-.592 a
NSb
-.274 a
NSb
.470
Promotion
p. < .05
.574 a
p. < .05
NSb
-.331 a
p. < .05
NSb
NSb
.338
Pay
p. < .05
.254 a
NSb
p. < .05
---
NSb
.065
Coworkers
p. < .05
.444 a
p. < .05
Customers
NS
a = unstandardized Beta coefficient
-.763 a
---
b
---
NSb
----NS = Not Significant
relationship between satisfaction with the job
and role ambiguity (p. > .05), role conflict (p.
> .05), or emotional exhaustion (p. > .05). R2
equaled .378. Overall, findings support H1b, but
fail to support H3a, H4a, and H5b.
The third equation focused on POS (H1c), workfamily conflict (H2b), role ambiguity (H3b), role
conflict (H4b), and emotional exhaustion (H5c),
as predictors of satisfaction with company
policy. Results indicate that POS (.313, .300, p.
< .05), work-family conflict (-.592, -.320 p.
< .05), and role conflict (-.274, -.213, p. < .05)
are all significantly related to satisfaction with
company policy. Results did not find support
for the relationship between satisfaction with
company policy and role ambiguity (p. > .05) or
emotional exhaustion (p. > .05). R2 equaled .47.
Overall, findings support H1c, H2b, and H4b,
but fail to support H3b and H5c.
When the proposed relationships between
Role
Conflict
---
--NSb
---
Emotional
Exhaustion
R2
NSb
.125
---
.219
--.000
--- relationship was
not tested
satisfaction with promotion, POS (H1d), workfamily conflict (H2c), role ambiguity (H3c), role
conflict (H4c) and emotional exhaustion (H5d)
were examined, results suggested that POS (.574,
.116, p. < .05) and role ambiguity (-.331, -.210, p.
< .05) are significantly related to satisfaction with
promotion.
Results failed to support a
significant link between satisfaction with
promotion, work-family conflict (p. > .05), role
conflict (p. > .05), or emotional exhaustion (p.
> .05). R2 equaled .338. Overall, findings
support H1d and H3c, but fail to support H2c,
H4c, and H5d.
The fifth regression equation linked POS (H1e),
work-family conflict (H2d) and emotional
exhaustion (H5e) with satisfaction with pay.
Results indicate that POS (.254, .086, p. < .05) is
significantly related to satisfaction with pay.
Findings fail to support a significant link
between satisfaction with pay and both workfamily conflict (p. > .05) and emotional
Vol. 10, No. 1
14
Journal of Selling & Major Account Management
exhaustion (p. > .05). R2 equaled .065. Overall,
findings support H1e, but fail to support H2d
and H5e.
POS (H1f), role ambiguity (H3d) and role
conflict (H4d) were tested as possible
antecedents of satisfaction with co-workers.
Results indicate that POS (.444, .468, p. < .05) is
significantly related to satisfaction with
coworkers. Results failed to support significant
links between satisfaction with coworkers, role
ambiguity (p. > .05) and role conflict (p. > 05).
R2 equaled .219. Overall, findings support H1f,
but fail to support H3d and H4d.
The last equation linked POS (H1g) as a
potential antecedent of satisfaction with
customers.
Results failed to support that
satisfaction with customers is predicted by POS
(p. > 05).
DISCUSSION & IMPLICATIONS
Implications
Satisfaction
of
Multi-Faceted
Job
Findings from this study further confirm existing
literature that stresses the need for researchers to
examine job satisfaction as a multi-faceted
construct (e.g. Churchill, 1974; Boles et al., 2003;
Rutherford et al., 2009). Within the current
study, the ability to explain variance within each
of the facets ranged between zero and fortyseven percent.
The highest amount of variance was explained
within the satisfaction with policy facet.
Specifically, POS, role conflict, and work-family
conflict were all predictors of the facet. While
both role conflict and work-family conflict were
negative influencers, POS was a positive
influence. Further, assessing the standardized
coefficients reveals that work-family conflict had
the largest impact, followed by POS and role
conflict. For sales managers and selling firms,
this finding highlights that when policies are in
place that interferes with an employee‘s family
life, this conflict has a major impact on the
Northern Illinois University
employee‘s satisfaction with company policies.
However, if an organization can show that it
supports the employee, then this can increase the
employee‘s satisfaction with policies. In essence,
firms need to have tools in place that reduce an
employee‘s level of work-family conflict. In part,
firms could keep overnight travel lower and
make sure that employees with families are able
to spend nights and weekends with their families
versus being tied-up with work-related issues.
Another potential asset in reducing work-family
conflict could be training for both salespeople
and sales managers examining the origins of
work-family conflict in that particular work
setting and discussing how the firm could help
reduce salesperson perceptions of work-family
conflict.
The only other facet of job satisfaction that was
explained by more than one antecedent was
satisfaction with promotion. This facet has just
under thirty-four percent of its variance
explained and was predicted by both role
ambiguity and POS. POS was the strongest
predictor and also had a positive impact while
role ambiguity had a much weaker impact and
was negatively related. In essence, if firms are
able to create a clear job description and roles
that employees must perform and be supportive
of the employee when they are performing those
roles, then the salespeople will feel their chances
of promotion within the organization are good.
A track record of the organization promoting
from within also can strengthen the level of POS
and its link to satisfaction with promotion.
It is worthy to note that satisfaction with job
(R2=.125), pay (R2=.065), and co-workers
(R2=.219) were only predicted by POS. While
previous studies suggest that there were more
antecedents that influence these facets of job
satisfaction, POS within this study produced the
strongest overall relationships with these facets
of job satisfaction. An organization could
potentially influence the employee‘s perception
of organizational support by adopting practices
Academic Article
that would help empower employees to make
suggestions to improve the company and/or
working conditions. For example a suggestion
box might achieve this. Further, in times of
economic downturn firms should let employees
know the financial status of the organization. In
addition, if sales employees are not provided
with raises, the organization should avoid
providing other employees with raises as well. By
halting raises for everyone versus a few, this
could potentially indicate to employees that
everyone is part of a team working toward the
common goal together. Organizations could also
implement programs or sponsorship for
employee bonding. This could include outings or
even sponsorship of an employees‘ softball team,
bowling team, or some other type of team event.
Like satisfaction with job, pay and co-workers,
satisfaction with supervisor was predicted by
only one construct. Specifically, work-family
conflict was found to predict satisfaction with
supervisor. The variance explained was
somewhat low (R2=.125). However, it is
important for firms to recognize that when their
employees are required to travel overnight, or
even perform tasks that keep them from going
home on time to be with their families, these
employees are likely to experience lower levels of
satisfaction with their supervisors. It may be that
salespeople (and maybe other employees)
perceive that the supervisor is the embodiment
of the firm and firm policies – either positively
or negatively influencing work-family conflict –
are attributed to the direct supervisor.
Therefore, it may be beneficial for firms to make
conscious efforts to avoid requiring their
employees to work during traditional ―family
times‖ on a regular basis. To make sure that this
can happen, firms should make sure that
supervisors have some flexibility to help families
deal with issues of conflict between work and
family. As long as the salesperson is effective at
his/her job, the degree of flexibility available to
the supervisor should probably be fairly broad.
Engaging in practices that maximize employees‘
Winter 2010 15
time with their families is likely to improve
employees‘ satisfaction with their supervisors.
Satisfaction with customers provides interesting
implications for the academic community.
Results from this study fail to predict the facet of
job satisfaction. Hence, the antecedents that
impact this facet may be entirely different than
the current research community is examining.
However, this may be sample specific and
additional research would provide some
clarification to the issue.
Implications of Perceived Organizational
Support
The POS construct provides the most important
implication in this study from both academic and
practitioner perspectives. This study finds that
POS had a significant impact on five of the
seven facets of job satisfaction. Hence, in
addition to being a strong predictor of global job
satisfaction it is also a strong predictor of multifaceted job satisfaction. When examining the
construct with the other antecedent variables,
POS was the sole significant predictor of three
of the facets of job satisfaction (satisfaction with
job, pay, and co-workers). In essence, the
inclusion of POS within models predicting multifaceted job satisfaction suggest that significant
linkages from the Boles et al. (2003) and
Rutherford et al. (2009) studies are not
significant after controlling for POS.
For sales researchers, this study provides a
strong foundation for the inclusion of POS
within models examining salesperson job
satisfaction from a multi-faceted perspective.
This study suggests that failure to include POS
within models examining multi-faceted job
satisfaction will likely provide an incomplete
assessment.
For practitioners, increasing the perception of
organizational support among its salespeople can
function as a real competitive advantage. Things
such as the policies and procedures a company
has in place and the formal guidance it provides
Vol. 10, No. 1
16
Journal of Selling & Major Account Management
through training programs and seminars to both
employees and managers can affect an
employee‘s perception of organizational support
(Randall et al., 1999). Another way in which a
company can show its employees that it supports
them is by providing favorable working
conditions and rewards for good performance
(Rhoades and Eisenberger, 2002). Favorable
working conditions and rewards signal to
employees that the organization does care about
them, values their contribution, and wants to
retain them as members.
Implications with Regards to Work-Family
Conflict, Role Ambiguity, and Role Conflict
This study advances the findings of the Boles et
al. (2003) study. First, of the twelve hypothesized
relationships, four of the relationships were
supported within this study. Given that POS and
emotional exhaustion were the two additional
linkages within this study and that POS was a
main predictor, this study reduces the impact of
some of the findings of the Boles et al. (2003)
study while providing additional support for four
of the linkages.
Reducing an employee‘s role conflict and role
ambiguity gives a clear picture of what the
employee‘s responsibilities are, and more
importantly what they are not. This clear picture
will make the salesperson more efficient and
effective because not only are they eliminating
tasks that they aren‘t responsible for, they can
provide more focus and effort in dealing with
what they are responsible for. This will give
employees a better understanding of, and
satisfaction with, a company‘s policies and
promotion guidelines. Reducing a salesperson‘s
work-family conflict means that it is less likely
stressors from their personal life will impact their
work. Giving employees the time and resources,
and more importantly the understanding, to deal
with personal issues will lead to the salesperson
having a greater respect for, loyalty to, and faith
in their supervisor.
Northern Illinois University
Implications of Emotional Exhaustion
Another interesting finding is the lack of
relationship between emotional exhaustion and
the facets of satisfaction. This finding is
inconsistent with the Rutherford et al. (2009)
study. Using the findings of Rutherford et al.
(2009), emotional exhaustion was hypothesized
to be related to five of the seven facets of job
satisfaction, but all relationships were found non
-significant. While the lack of significance is
somewhat surprising, given that Rutherford et al.
(2009) examined correlations, and failed to
examine other predictors beyond emotional
exhaustion, the finding is understandable.
Further, considering that POS reduced or
eliminated support for other linkages within this
study, it is not surprising that emotional
exhaustion‘s impact has been substantially
reduced.
From an academic viewpoint, additional
understanding of the impact of emotional
exhaustion in relation to multi-faceted job
satisfaction is needed. Given that Rutherford et
al. (2009) was the first study to examine these
linkages within a sales context, the current study
brings into question the impact of emotional
exhaustion on multi-faceted job satisfaction.
From a practitioner perspective, we recommend
that firms should not use findings from this
study to eliminate any programs based on
reducing employee burnout. Several reasons
include that employee burnout has been linked
to increases in employee turnover intentions
(Boles et al., 1997; Jaramillo et al., 2006),
reductions in employee commitment (Rutherford
et al., 2009; Babakus et al., 1999), and employee
performance (Babakus et al., 1999).
LIMITATIONS
RESEARCH
AND
FUTURE
This research has several limitations. The first
limitation is the sample contained only 126
respondents. While the sample size does permit
the testing of the hypothesized relationships
Academic Article
using regression, the sample size does not permit
the use of structural modeling procedures.
Second, generalizability may also be an issue due
to the fact that only one firm was used in the
data collection. However, that firm may be
representative of other sales forces that do
creative selling of services to business customers.
This study opens several avenues for future
research. First, findings from this study should
be replicated in a setting using multiple firms.
Second, using the findings from this study, a
structural model can be proposed and tested.
The third avenue for future research would be
the advancement of our understanding of the
POS construct. This construct appears to be
one of the most important constructs to assess
when examining salesperson job satisfaction.
Researchers should examine this construct as a
predictor of other relevant sales constructs, as
well as examine antecedents of this construct.
Considering that POS was a strong predictor of
multiple facets of job satisfaction, future research
should examine POS as a potential mediator.
Winter 2010 17
CONCLUSIONS
This study advances our understanding of
antecedents of salesperson job satisfaction. Five
antecedents were examined in relation to the
seven facets of job satisfaction. Six of the seven
facets were predicted by one or more of the
examined constructs. Findings suggested that
emotional exhaustion did not play a significant
role when predicting salesperson job satisfaction,
while POS played a major role predicting five of
the seven facets. Further, work-family conflict
predicted two facets, role ambiguity predicted
one facet, and role conflict predicted one facet of
salesperson job satisfaction (see Figure I).
Overall, this study provides two major findings
with regard to job satisfaction. First, this study
further confirms that the use of global job
satisfaction scales fail to provide an accurate and
full assessment of satisfaction. Second, results
provide evidence that in a sales context POS
impacts the facets of salesperson job satisfaction
to a greater extent than work-family conflict, role
ambiguity, role conflict and emotional
exhaustion.
Figure 1: Hypothezised Linkages
Perceived
Organizational
Support
H1 (a—g)
Salesperson
Satisfaction with:
Supervisor
Work-Family
Conflict
H2 (a-d)
Job
Policy
Role
Ambiguity
H3 (a-d)
Promotion
Pay
Role
Conflict
H4 (a-d)
Emotional
Exhaustion
H5 (a-e)
Co-workers
Customers
Solid Lines are Significant
Vol. 10, No. 1
18
Journal of Selling & Major Account Management
Brian N. Rutherford, Assistant Professor of
Selling and Sales Management, Department of
Consumer Sciences and Retailing, Purdue
University, West Lafayette, IN 47907 (765) 4961714, Fax (765) 494-0869, brutherf@purdue.edu
James S. Boles, Professor of Marketing
Department of Marketing, Georgia State
University, P.O. Box 3991, Atlanta, GA 303023391 (404) 651-4198, Fax (404) 651-4198,
jboles@gsu.edu
G. Alexander Hamwi, Assistant Professor of
Marketing, Missouri State University,
Department of Marketing, 901 S. National,
Springfield, MO 65897, (601)-832-8325,
ahamwi3@yahoo.com
Leann G. Rutherford, Doctoral Candidate,
Department of Consumer Sciences and
Retailing, Purdue University, West Lafayette, IN
47907, (770) 861-2191, Fax (765) 494-0869,
lpashnya@purdue.edu
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Academic Article
Winter 2010 21
Antecedents and Consequences of the Conflict Between the
Marketing and Sales Departments
By George J. Avlontis, Konstantions Lionakis, and Nikolas G. Panagopoulos
This paper focuses on the relationship between the Marketing and Sales departments. A model which
investigates the antecedents of the Marketing-Sales conflict in terms of market orientation and company‘s strategy, as well as the consequences of this conflict in company performance was developed and
tested. Based on data collected from both Marketing and Sales managers in 132 companies, the study
indicates that market orientation and the consistency in the perceptions of Marketing-Sales managers visà-vis the company‘s strategy are reducing the conflict between Marketing and Sales, which is hurting
company performance. The theoretical and managerial implications of the study are discussed.
INTRODUCTION
Senior managers often describe the working
relationship between Marketing and Sales
(hereinafter M&S) as unsatisfactory. Companies
such as IBM and Procter & Gamble have
experienced poor coordination and problematic
relationships between their M&S departments
(Kotler et al., 2006; Shapiro, 2002). The
relationship between M&S is reported as being
problematic (Dewsnap and Jobber, 2000, 2002)
and affecting company performance (Shapiro,
2002; Kotler et al., 2006; Meunier-FitzHugh and
Percy, 2007).
A considerable body of research calls for both
M&S departments to modify their role and
practices in order to increase their coordination,
to improve their relationships and to give life to
integrated processes (e.g. Cespedes, 1993; Day,
1994; Homburg et al., 2008; Kotler et al., 2006;
Shapiro, 2002; Slater and Narver, 1995).
Coordination, improved relationships and
integration between M&S departments are
achieved when these two functions are (a)
supportive of each other, (b) consistent and
congruent, and (c) sharing the same culture
(Lorge, 1999; Kotler et al., 2006; Meldrum, 1996;
Rouziès et al., 2005). Griffin and Hauser (1996)
cite cultural differences between M&S, which are
mainly created by differences in background, as a
barrier to inter-functional relationships and
integration between these two departments. In a
similar vein, Rouziès et al. (2005) suggested that
organizational cultures with norms of sharing
and adapting, positively affect the degree of
M&S integration and coordination. Two
significant elements of culture which had been
mentioned in the literature as having a bearing
on the relationship between M&S departments
are (a) the degree of market orientation, and (b)
the M&S alignment in company‘s strategy
(Guenzi and Troilo, 2006; Homburg and Pflesser
2000; Meldrum, 1996; Shapiro, 2002). Moreover,
a core element of poor Marketing-Sales
relationships is their in-between conflict
(Dewsnap and Jobber, 2000, 2002; Kotler et al.,
2006).
Despite the above observations, almost no
attention has been devoted to investigating (a)
the antecedents of M&S conflict in terms of the
two significant elements of culture (market
orientation and M&S alignment in company‘s
strategy), and (b) the consequences of this
conflict in terms of company‘s performance.
Moreover, extant literature in the area of
interdepartmental relationships, and more
specifically between the M&S departments, has
not examined, as yet, the perceptions of the
M&S managers of the same company
simultaneously. As Dawes and Massey (2005)
point out, researchers, ideally, need to examine
M&S managers‘ perspectives simultaneously.
Therefore, the main objectives of this research
Vol. 10, No. 1
22
Journal of Selling & Major Account Management
project were to capture the perceptions of both
M&S managers within the same company in
order to investigate (a) the impact of market
orientation and company‘s strategy on the level
of conflict between M&S, and (b) the effects of
this conflict on company performance.
LITERATURE REVIEW AND
HYPOTHESES
Market Orientation
Market orientation has been studied extensively
over the past twenty years with the general
consensus that is positively related to business
performance (e.g. Avlonitis and Gounaris, 1997;
Jaworski and Kohli, 1993; Narver and Slater,
1990). A central aspect of the market orientation
is cross-functional interaction (Krohmer et al.,
2002). Specifically, Narver and Slater (1990) view
―inter-functional coordination‖ as being one of
three components of market orientation,
whereas Jaworski and Kohli (1993) place
emphasis on behaviours in regard to market
information and cross-functional activities,
which fall within the intelligence dissemination
part of their conceptualization. In general,
market oriented companies are characterized by
a high level of integration of market-related
knowledge and skills (Guenzi and Troilo, 2006).
Prior research shows that knowledge and skills
regarding market-related activities (e.g. market
research, STP strategies and the 4Ps) are highly
concentrated in M&S departments, which are the
two departments traditionally responsible for
managing these activities (Homburg et al., 1999;
Krohmer, et al., 2002; Rouziès et al., 2005).
Additionally, Guenzi and Troilo (2006) suggested
market orientation as a cultural aspect which
improves M&S integration, while Jaworski and
Kohli (1993) found that higher level of conflict
was associated with reduced market orientation.
Thus, we can hypothesize that:
H1: Market orientation is (a) decreasing the level of
conflict between Marketing and Sales departments, and
(b) enhancing company performance
Northern Illinois University
Company’s Strategy
Companies can employ different strategies in
order to create superior customer value (e.g.
Day, 1994), which is the basis of their
competitive advantage (Guenzi and Troilo,
2007). The M&S relationship is highly connected
with the quality of strategy formulation and
implementation (Menon et al., 1996). Conflict
between M&S is associated with lower cooperation and the co-ordination of strategy
activities, effectively undermining the quality of
strategy in terms of both planning and
implementation (Menon et al., 1997; Ruekert and
Walker, 1987). There is also seems to be a
connection between M&S alignment and
inconsistencies in the perceptions of M&S
managers regarding company‘s strategy (e.g.
Viswanathan & Olson, 1992). For instance,
Strahle et al. (1996) demonstrated inconsistencies
on strategy formulation between M&S
departments, suggesting that in most cases the
activities performed at the Sales department level
do not reflect the strategy at the SBU level.
Likewise, Colletti and Chonko (1997) showed
that changes in marketing strategies do not drive
to consistent modifications of sales strategies and
tactics, while Evans and Schlacter (1985) found
that companies hardly integrate the sales force in
marketing planning processes. Thus, we can
hypothesize that:
H2: Inconsistencies in the perceptions of Marketing and
Sales managers regarding their company’s strategy are (a)
enhancing the level of conflict between their departments,
and (b) reducing company performance
The Impact
Performance
of
Conflict
on
Company
Some scholars have devoted attention to M&S
interaction. For instance, Dewsnap and Jobber
(2000, 2002) note that the M&S relationship is
characterized, mainly, by negative outcomes, e.g.
a lack of cohesion, distrust, dissatisfaction, and
conflict. Conflict has been defined in the
organisational science literature as the ―collision
Winter 2010 23
Academic Article
of actors‖ (Katz and Kahn, 1978) and ―tension
between two or more social entities – individuals,
groups or larger organisations - which arises
from incompatibility of actual or desired
responses‖ (Gaski, 1984). In the marketing
literature, Menon et al. (1996) conceptualize
conflict as dysfunctional, task-based tension
between departments, which manifests in the
form of ―turf battles‖ and ―destructive selfserving efforts‖ which are both counter to
collaboration (Morgan and Piercy, 1998). The
consequences of conflict on organisational
processes and marketing performance are
characterized as deleterious (Chimhanzi, 2004).
Conflict has been found to reduce interfunctional performance (Dutton and Walton,
1996; Souder, 1981; Weinrauch and Anderson,
1982) as it results in the absence of depth of
communication and infrequency of contact
between functional units (Menon et al., 1997).
Additionally, Kotler et al. (2006) emphasized the
need for ending the war between M&S in order
to create superior company performance. Thus,
we can hypothesize that:
H3: Conflict between Marketing and Sales departments
has a negative impact on company performance
Research Model
On the basis of the preceding discussion, the
relationships between the constructs used are
summarized in the research model shown in
Figure 1.
RESEARCH METHODOLOGY
Sample & Data Collection
Consumer goods companies with turnover of
more than 5 million euro and more than 50
employees were specified as the population of
this study, since these criteria can justify the
existence of an independent Marketing
department. Using the TNS ICAP Census of
Greek Companies Financial Position, 509 firms
were identified as fulfilling the above criteria.
From these companies, a stratified sample of 312
companies was selected (strata were derived on
the basis of size and SIC code) and contacts were
made by letters and phone calls asking their
cooperation in our research. 132 of them agreed
to participate in our research (42% response
rate). Personal interviews were conducted, using
a structured questionnaire, with the M&S
managers of these companies. Both M&S
managers answered the same questionnaire in
separate personal interviews (without knowing
each other‘s answers). This method apparently is
the most appropriate one since it reduces
common method bias, as from each sample
Figure 1. Research Model
Market
orientation
H1 (-)
H3 (-)
Conflict between
M&S
M&S strategy
inconsistency
Company
performance
H2 (+)
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Journal of Selling & Major Account Management
Table 1. Operationalisation of Study Variables
CFI
TLI
RMSEA
AVE
mean
Std.dev
Cronbach's
Alpha
Marketing Manager perceptions
.922
.913
.072
See
Table2
4.0
.54
See Table2
Sales Manager perceptions
.919
.908
.077
See
Table2
3.9
.52
See Table2
Marketing Manager perceptions
.943
.915
.060
.835
2.5
.90
.939
Sales Manager perceptions
.962
.942
.075
.849
2.6
.96
.949
Marketing Manager perceptions
.919
.903
.078
.879
3.2
.91
.958
Sales Manager perceptions
.921
.904
.080
.866
3.2
.87
.953
Variable
Market orientation
Conflict between
M&S departments
Company performance
Table 2. Market Orientation Components
Latent variable
Marketing Managers
Sales Managers
(Customer Orientation)
AVE= 0,635 > 0,5
AVE= 0,679 > 0,5
Composite Reliability = 0,737 > 0,7
Composite Reliability = 0,721 > 0,7
Cronbach’s alpha = 0,902
Cronbach’s alpha = 0,887
(Competitive Orientation)
AVE= 0,617 > 0,5
AVE= 0,631 > 0,5
Composite Reliability = 0,754 > 0,7
Composite Reliability = 0,708 > 0,7
Cronbach’s alpha = 0,816
Cronbach’s alpha = 0,760
(Inter-Functional Coordination)
AVE= 0,629 > 0,5
AVE= 0,620 > 0,5
Composite Reliability = 0,730 > 0,7
Composite Reliability = 0,719 > 0,7
Cronbach’s alpha = 0,826
Cronbach’s alpha = 0,778
company two key-informants provided the data
(Podsakoff et al., 2003).
Operationalisation of Study Variables
Market Orientation: The fifteen-item scale
developed by Narver and Slater (1990) was
adopted in order to capture the level of market
orientation. Both managers indicated, using a 5point Likert type scale (where 1 stands for low
level of market orientation and 5 stands for high
level of market orientation), their degree of
agreement with each of the items of the scale.
Two CFAs (one for each manager) were
conducted in order to assess the reliability and
validity of this reflective measure. Also, as
shown in Tables 1 and 2, the CFAs provide
evidence in favor of the three Narver and Slater‘s
(1990) market orientation components (Customer
Northern Illinois University
Orientation, Competitive Orientation, Inter-Functional
Coordination). Following standard procedures (see
Narver and Slater 1990; Slater and Narver, 2000)
the mean value of these three components for
both M&S managers was computed providing
their perception of market orientation.
Independent samples t-test indicated no
significant differences in the opinions of M&S
managers regarding the level of market
orientation (Marketing managers mean=4.06 /
Sales managers mean=3.97 / t=1.377 / ns-p>0.05).
Thus, the mean value of the responses from the
two managers of each company was computed
and used as a composite measure of market
orientation (mean value=4.01, Std.dev.= 0.52).
Company Strategy: McKee, Varadarajan and Pride‘s
(1989) operationalisation was adopted in order to
capture the perceptions of M&S managers
Winter 2010 25
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regarding the type of their company‘s strategy.
Thus, each manager was provided with the
definition of the three strategies of Miles and
Snow (1978) typology (Prospector, Analyzer, and
Defender) and was asked to indicate the strategy
which he/she perceived as being his/her
company‘s strategy. Instead of using the terms
―prospector‖, ―defender‖ and ―analyzer‖, we
labelled the descriptions ―Type 1‖, ―Type 2‖ and
―Type 3‖ respectively, in order to control for
socially undesirable responses (Stathakopoulos,
1998). Through this operationalization, the
companies were classified in two groups, as
shown in Table 3, whereby group 1 contains
companies in which the M&S managers had
similar perceptions regarding their company‘s
strategy (80%), while group 2 contains
companies in which the two managers had
different perceptions regarding the strategy in
question (20%). Thus, a dichotomous 0, 1
measurement was devised whereby the value of 0
stands for companies in group 2, while the value
of 1 stands for companies in group 1.
Conflict: The seven-item scale developed by
Jaworski and Kohli (1993) measuring
interdepartmental conflict was adapted in order
to capture the level of conflict between M&S
departments. Both managers indicated, using a 5point Likert type scale (where 1 stands for low
level of conflict and 5 stands for high level of
conflict), their degree of agreement with each of
the seven items of the scale. Two CFAs (one for
each manager) were conducted in order to assess
the reliability and validity of this reflective
measure, as shown in Table 1. Independent
samples t-test indicated no significant differences
in the opinions of M&S managers regarding the
level of conflict between M&S departments
(Marketing managers mean=2.56 / Sales managers
mean=2.61/ t=-0.396 / ns-p>0.05). Thus the mean
value of the responses of the two managers from
each company was computed and used as a
composite measure of M&S conflict (mean
value=2.6, Std.dev.=0.9).
Company Performance: Company performance was
measured in terms of profits, sales volume,
market share and ROI (e.g. Narver and Slater,
1990; Avlonitis and Gounaris, 1997). The two
managers indicated, using a five point scale, the
firm‘s performance in comparison with their
main competitor (1: much worse, 5: much
better), as well as the degree of the firm‘s
satisfaction (1: very unpleased, 5: very pleased),
for each one of the four performance criteria.
Two CFAs (one for each manager) were
conducted in order to assess the reliability and
validity of this reflective measure, as shown in
Table 1. Independent samples t-test indicated no
significant differences in the opinions of M&S
managers regarding company performance
(Marketing managers mean=3.21 / Sales managers
mean=3.20 / t=0.60 / ns-p>0.01). Thus, the mean
value of four summated scales, two from each
manager and from each company, was computed
and was used as a composite measure of
company performance ( mean value=3.21,
Std.dev.=0.91).
ANALYSES AND RESULTS
Model Testing
In order to examine the research Structural
Equation Modelling (SEM) was conducted as
Table 3. Marketing and Sales Managers Perceptions Regarding Their Company’s Strategy
Group 1 - Consistency
prospector
analyzer
defender
68 (65%)
24 (23%)
13 (12%)
N=132
Ν=105 (80%)
Group 2 - Inconsistency
prospector-analyzer
prospector-defender
analyzer-defender
18 (67%)
3 (11%)
6 (22%)
Ν=27 (20%)
Vol. 10, No. 1
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Journal of Selling & Major Account Management
Table 4. Research Model
Market Orientation
Strategy Inconsistency
Marketing-Sales Conflict
Marketing-Sales Conflict
Company Performance
B (unstandardized) / (t-statistic)
B (unstandardized) / (t-statistic)
-1.097 / (t=2.189*)
+1.951 / (t=1.168*)
---
-----1.224 / (t=4.964*)
Estimation procedure: GLS
latent variables: market orientation, marketing-sales conflict, company performance
categorical variable: strategy consistency
* significant at the 0.05 level
Fit indices: TLI=.934 / CFI=.948 / GFI=.948 / RMSEA=.051 / x2 = 632.112 / df = 2/ p = 0.0000
Figure 2. SEM (Path Analysis)
Market orientation
-1.097
-1.224
Conflict between
M&S
M&S strategy
inconsistency
+1.951
shown in Table 4 (path analysis). Using standard
procedures for correlations between categorical
variables (strategy consistency/inconsistency) and
continuous latent variables (market orientation,
M&S conflict, and company performance) we adopted
the Generalized Least Squares (GLS) estimation
procedure (Lee, Poon, and Bentler, 1992). The
result of this analysis is significant at the 0.05
level and overall suggests that (a) market
orientation has a strong negative impact on the
level of conflict between M&S, (b)
inconsistencies in the perceptions of M&S
managers regarding their company‘s strategy is
enhancing the level of conflict between M&S
departments, and (c) the level of this conflict has
a strong negative impact on company
performance. Thus, hypotheses H1a, H2a, and
H3 are confirmed. Figure 2 depicts the results of
the SEM analysis.
Northern Illinois University
Company
performance
Examination of the Marketing-Sales Conflict
as a Mediator in the Model
The relationship between market orientation and company
performance
Prior studies have shown that market orientation
can have a direct effect on company
performance (e.g. Avlonitis and Gounaris, 1997;
Jaworski and Kohli, 1993; Slater and Narver,
2000). In this paper, we examined the mediating
role of M&S conflict in the relationship between
market orientation and company performance by
following the standard three-step procedure of
mediation analysis (Baron and Kenny, 1986;
MacKinnon, Lockwood, and Hoffman, 2002).
Firstly, two SEMs were conducted as shown in
Table 5 and depicted in Figure 3. The first SEM
examines the impact of market orientation on
M&S conflict as well as the impact of M&S
conflict on company performance; whereas the
second SEM includes, in addition to these
Winter 2010 27
Academic Article
Table 5. The Mediation Effect of Marketing-Sales Conflict
Marketing-Sales ConflictB
Company PerformanceB
(unstandardized) / (t-statistic)
(unstandardized) / (t-statistic)
-1.128 / (t=0.115*)
---
---.772 / (t=0.146*)
Market Orientation
Marketing-Sales Conflict
SEM1 – Estimation procedure: ML
latent variables: market orientation, marketing-sales conflict, company performance
* significant at the 0.05 level
Fit indices: TLI=.957 / CFI=.988 / GFI=.959 / RMSEA=.049 / x2 = 365.985 / df = 133 / p = 0.0000
Marketing-Sales ConflictB
Company PerformanceB
(unstandardized) / (t-statistic)
(unstandardized) / (t-statistic)
-.757 / (t=0.375*)
---
+.787 / (t=0.568*)
-.855 / (t=0.447*)
Market Orientation
Marketing-Sales Conflict
SEM2 – Estimation procedure: ML
latent variables: market orientation, marketing-sales conflict, company performance
* significant at the 0.05 level
Fit indices: TLI=.935 / CFI=.944 / GFI=.948 / RMSEA=.051 / x2 = 267.088/ df = 132/ p = 0.0000
Figure 3
Market orientation
(-1.128)
-0772
Conflict between
M&S
Company
performance
SEM1 – Estimation procedure: ML
latent variables: market orientation, marketing-sales conflict, company performance
* significant at the 0.05 level
Fit indices: TLI=.957 / CFI=.988 / GFI=.959 / RMSEA=.049 / x2 = 365.985 / df = 133 / p = 0.000
(+0.787)
Market orientation
(-0.757)
Conflict between
M&S
(-0.855)
Company
performance
SEM2 – Estimation procedure: ML
latent variables: market orientation, marketing-sales conflict, company performance
* significant at the 0.05 level
Fit indices: TLI=.935 / CFI=.944 / GFI=.948 / RMSEA=.051 / x2 = 267.088/ df = 132 / p = 0.000
relationships, the direct effect of market
orientation on company performance. Secondly,
we calculated (a) the chi-square difference
between the two models (Δx2=98.897), and (b)
the percentage value of chi-square distribution
(x2=6.64 / df=1 / p<0.01). Finally, the
comparison between the afore-mentioned (a)
and (b) indicates that the M&S conflict is a
partial mediator in the direct relationship
between market orientation and company
performance, because (a) is greater than (b).
Thus, it seems that a reduction in the level of
M&S conflict through the implementation of
market orientation is enhancing the direct
Vol. 10, No. 1
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Journal of Selling & Major Account Management
Table 6. The Mediation Effect of Marketing-Sales Conflict
Marketing-Sales Conflict
Company Performance
B / (t-statistic)
B / (t-statistic)
+.318 / (t=0.357*)
---
---.624 / (t=0.468*)
Strategy inconsistency
Marketing-Sales Conflict
SEM1 – Estimation procedure: GLS
latent variables: marketing-sales conflict, company performance
categorical variable: strategy inconsistency
* significant at the 0.05 level
Fit indices: TLI=.941 / CFI=.968 / GFI=.956 / RMSEA=.050 / x2 = 179.584 / df = 102 / p = 0.0000
Strategy inconsistency
Marketing-Sales Conflict
Marketing-Sales Conflict
Company Performance
B (unstandardized) / (t-statistic)
B (unstandardized) / (t-statistic)
+.882 / (t=0.479*)
---
-.730 / (t=0.588*)
-.872 / (t=0.569*)
SEM2 – Estimation procedure: GLS
latent variables: marketing-sales conflict, company performance
categorical variable: strategy inconsistency
* significant at the 0.05 level
Fit indices: TLI=.931 / CFI=.949 / GFI=.937 / RMSEA=.056 / x2 = 175.465 / df = 101/ p = 0.0000
Figure 4
M&S Strategy
Inconsistency
(+0.318)
(-0.624)
Conflict between
M&S
Company
performance
SEM1 – Estimation procedure: GLS
latent variables: marketing-sales conflict, company performance
categorical variable: strategy inconsistency
* significant at 0.05 the level
Fit indices: TLI=.941 / CFI=.968 / GFI=.956 /RMSEA=.050 / x2 = 179.584 / df = 102 / p = 0.0000
(-0.730)
M&S Strategy
Inconsistency
(+0.882)
Conflict between
M&S
(-0.872)
Company
performance
SEM2 – Estimation procedure: GLS
latent variables: marketing-sales conflict, company performance
categorical variable: strategy inconsistency
* significant at the 0.05 level
Fit indices: TLI=.931 / CFI=.949 / GFI=.937 / RMSEA=.056 / x2 = 175.465 / df = 101/ p = 0.0000
positive relationship between market orientation
and company performance. Consequently, it
appears that the enhanced performance of
market oriented companies is partially explained
through their ability to reduce the level of M&S
conflict.
The relationship between strategy consistency/inconsistency
and company performance
The
same
methodological
Northern Illinois University
approach
for
examining mediation (Baron and Kenny, 1986;
MacKinnon, Lockwood, and Hoffman, 2002)
was adopted in order to examine the mediation
effect of the M&S conflict in the relationship
between the consistency/inconsistency in the
perceptions of M&S managers regarding
company‘s strategy and company performance.
Therefore, two SEMs were conducted, as shown
in Table 6 and depicted in Figure 4, where the
first SEM examines the impact of (a) strategy
Academic Article
consistency/inconsistency on M&S conflict, and
(b) M&S conflict on company performance,
while the second SEM includes, in addition to
these relationships, the direct effect of strategy
consistency/inconsistency on company
performance. The comparison between the chisquare difference of the two models (Δx2=4.119)
and the percentage value of chi-square
distribution (x2=6.64 / df=1 / p<0.01) indicates
that the M&S conflict is not a partial mediator in
the direct relationship between strategy
consistency/inconsistency and company
performance (because 4.119<6.64). Thus, it
seems that the negative effect of M&S conflict
on company performance is not an element of
the direct effect of inconsistencies in the
perceptions of M&S managers regarding their
company‘s strategy on company performance. In
other words, the above analysis show that
inconsistencies between M&S view‘s regarding
company‘s strategy are hurting company
performance regardless the level of conflict
between M&S.
THEORETICAL IMPLICATIONS
The present study is one of the very few
empirical investigations on M&S conflict, and
the only one which base its results on the
perceptions of both M&S managers of the same
organization, following the pertinent extensive
calls of the relevant literature (e.g. Dawes and
Massey, 2005; Guenzi and Troilo, 2006;
Homburg et al., 2008; Korhmer et al., 2002).
To start with, a major implication of this study is
a clearer understanding of the effect of the
conflict between the M&S departments on
company performance. Our research provides
empirical data demonstrating that conflict
between M&S have a strong negative impact on
company performance. This finding supports the
relative normative literature (e.g. Kotler et al.,
2006; Meunier-FitzHugh and Percy, 2007;
Shapiro, 2002).
Winter 2010 29
Secondly, the literature suggests that M&S
effective relationship is one of the components
of market-driven organizations (Guenzi and
Troilo, 2006; Rouziès et al., 2005). Our findings
concur with these results, by indicating that the
adoption of market orientation can reduce the
level of M&S conflict. Moreover our study
provides findings which support the positive
relationship between market orientation and
company performance (e.g Avlonitis and
Gounaris, 1997; Cano et al., 2004), placing the
M&S conflict as a mediator in this relationship.
These findings are highly connected with the
consideration of ―inter-functional coordination‖
as a basic component of market orientation
(Narver and Slater, 1990). Specifically, it seems
that the adoption of market orientation can
reduce the level of M&S conflict by enhancing
inter-functional coordination and consequently
its direct positive effect on company
performance.
Thirdly, our research empirically demonstrates
that a source of conflict between M&S is
inconsistency in the managers‘ perceptions
regarding company‘s strategy. Moreover, it seems
that these inconsistencies are hurting company
performance regardless of their effect on the
level of M&S conflict. These findings support
the suggestions made in the literature which
highlight the necessity for the strategic alignment
of M&S (e.g. Shapiro, 2002).
MANAGERIAL IMPLICATIONS
Besides theoretical implications, the study has
several managerial implications. The general
implication is that managers should be aware that
creating fair relationships between M&S, which
are characterized by a low level of conflict,
requires changes in the company's culture, as
well as people's attitudes and behaviours. These
changes will result substantial improvement on
important performance metrics.
Specifically, the findings of this study suggest
Vol. 10, No. 1
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Journal of Selling & Major Account Management
that the adoption of market orientation,
positively affect the relationship between M&S
departments by reducing their in-between level
of conflict, resulting superior performance. As a
consequence the design and management of
recruitment, training and compensation should
aim at maximizing market orientation.
Moreover, managers should focus on the
creation of a clear, unified and explicit strategy
between M&S. The lack of alignment between
M&S managers regarding their company‘s
strategy seems to be a source of conflict between
these two departments and ends up hurting
company performance.
Overall, our findings show clearly the need for
companies to (a) adopt market orientation, and
(b) eliminate any differences in the perceptions
of M&S managers regarding their company‘s
strategy, in order to reduce the level of conflict
between M&S, and attain superior performance.
George J. Avlonitis is Professor and Chairman of
the Department of Marketing & Communication
of the Athens University of Economics &
Business, Chairman of the Global Sales Science
Institute-GSSI (2010-2012) and Past President of
the European Marketing Academy. (EMAC). email: avlonitis@aueb.gr
Konstantinos Lionakis holds a PhD from the
Department of Marketing & Communication of
the Athens University of Economics & Business.
He is a lecturer at the New York College of
Athens. e-mail: lionakis@aueb.gr
Dr. Nikolaos G. Panagopoulos is currently a
Lecturer of Marketing at the Department of
Marketing & Communication, Athens University
of
Economics
&
Business.
e-mail:
npanag@aueb.gr
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Northern Illinois University
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Winter 2010 33
Application Article
How to Approach the Complexity of Negotiations
By Brian J. Dietmeyer
In the 1700‘s, Ben Franklin wrote a letter in response to a request he had received from a scientist
friend of his. His friend was asking if Mr. Franklin could advise him on which decision to make, he
said he couldn‘t but he could advise him on the process for making the decision. Furthermore, and
more important for this article, he stated that one of the problems with making decisions is that ―all
reasons pro and con are not present in the mind at the same time.‖ This is the same problem with
business to business negotiation. We basically have multiple people on both sides of a deal, looking at
many many variables and attempting to decide to accept or reject the deal. Another way to think
about business negotiation is that of a very complex project with multiple people and multiple moving parts, and we‘re trying to manage this project without a project plan. In either case, managing the
project or making a decision, not having a plan will yield sub optimal results.
INTRODUCTION
For far too long, negotiation has been thought
of as a ―soft skill‖ that is banished to elective
courses in the ―communications‖ category.
Most trainers, consultants and teachers also
think of it this way and provide training and
solutions based on this incorrect assumption.
Business negotiation is an entirely different skill
than personal or consumer negotiation.
Business negotiation is highly complex and
lends itself more to math and the diagnostic
process than it does to communications skills,
questioning techniques and body language
analysis. Speaking of sub-optimal results, it‘s no
wonder that 85% of the Fortune 500
companies say they do not feel they are ―highly
effective‖ at negotiation and after training, the
percentage of effectiveness only improves by
1.9%.
Let‘s take a look at some typical people
involved in Business-to-business negotiation,
the seller‘s side:
VP sales
Sales Rep
Pricing
Legal/contracts management
Product managers
Operations/Service
Some typical people involved in the Business
-to-business negotiations, the buyer side:
Head of technology
Purchasing
Legal
Finance
Lines of business owners
Just having all these people involved alone
makes business negotiation very complex.
Each individual on both sides of the table
have two questions to answer before they
can determine if the deal is done or not:
1. Is the solution on the table better
than my alternative?
2. What does a great deal look like
for me, if I accept?
Let‘s look at question one: we did this
analysis for an online training firm and their
customers were saying that they were ―the
same‖ as their nearest competitor. This was
killing them in negotiation process as it was
in the buyer‘s best interest to oversimplify
this complex negotiation variable as ―the
same thing‖. Why is this? Well, if the
competitors are viewed as the same then it
Vol. 10 No. 1
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Journal of Selling & Major Account Management
becomes a commodity. If it‘s a commodity
then the only variable that can be negotiated
is price.
We looked deep into this issue and thought
what would the multiple people on the buyer
side of this negotiation need to examine to
determine if in fact it they were the same. We
started with broad headings like technology,
content, overall corporate health etc. Then,
we looked under each of the six headings we
identified and listed the items in each heading
that actually could be compared when putting
two firms side by side.
For example under technology we listed:
1. Ease of integration into existing
systems
2. Speed of integration/uptime
3. Percentage of down time or crashes
4. Ability to generate use reports
Under content we looked at depth of
content on specific subjects and breadth of
content across subjects, language capability
etc. We determined that a buying
organization would need to analyze 43
different data points across its many
stakeholders to determine if they were in
fact negotiating for the ―same thing‖ as the
competitor. It is this analysis that determines
what ―it‖ is that is actually being negotiated.
The second level of analysis has to do with
how much to pay for ―it‖ and how much
risk to assume to acquire ―it‖. Most often
business-to-business negotiations are
reduced to price. More often than not, in
addition to price there is length of contract,
volume commitments, raw materials clauses,
payment terms, service, support, warranties
etc.
A typical business-to-business negotiation
has 10 people on both sides of the deal and
Northern Illinois University
probably up to 50-60 variables that need to
be considered in order to make good
business decisions. More often than not, this
is being accomplished on both sides of the
deal with very little cross functional
communication and planning and almost
always without a project plan. Therefore, it
is little wonder why most companies are not
satisfied with the effectiveness of their
negotiating teams.
There is good news however. Business-tobusiness negotiations are complex not
because of the amount of categories to
consider but rather their depth within those
categories. If we can answer the two
questions above, for multiple people on
both sides of the deal; we can effectively
―blueprint‖ the negotiation.
It is the negotiating teams that control the data
that will influence the outcome of the
negotiation. Let‘s take a look at this process
based on a typical negotiation in the
manufacturing environment.
We will work through the process on a ―live
deal‖ using analysis and effective customer
questioning around the two aspects of the
negotiation blueprint above.
THE SCENARIO
It‘s April 1st and you‘ve just been told by a
potential new global customer that after all your
months of trying to sell some of your machines
to them, it‘s finally down to a choice between
you and your closest competitor. The customer
wants to see your ―best foot forward‖ proposal
in six weeks (May 15), and they have hinted that
your competitor is aggressively pursuing the deal
with quite creative pricing and they have a pretty
good ―product fit‖
.
Winter 2010 35
Application Article
Figure 1
Negotiation Blueprint
Seller
Alternative
Seller
Desired
Terms
The Consequence of No Agreement (CNA) –
Yours
You complete an overview of your own CNA
and determine that if you don‘t reach agreement
with the customer in this negotiation you will
most likely lose the business. In this case, losing
the business means you will lose about $750K in
global revenue in the first year. If, however, you
take into consideration potential long-term
revenues from this customer, total CNA costs
could be as much as $2.5M. In addition, if you
don‘t close this deal you will lose the costs
associated with the four months you‘ve spent
selling to the customer—approximately $25K
for staff time, product demonstrations, etc.
You will also have some soft costs in the form
of ―political heat‖ from your Vice President of
Global Sales and the head of your product
management group, both of whom have a
personal interest in this sale as it impacts their
bonuses, as well as yours. You are also aware
that losing this sale will, in effect, strengthen a
key competitor‘s financial stability and
competitiveness by allowing these revenues to
go to them.
Good news for your CNA is that the market is
growing—albeit slowly compared to past years.
The chances of replacing this customer are fairly
good and your list of other prospects for sales
looks good at the moment. Also, while you have
no other customers that are this large and ready
Buyer
Desired
Terms
Buyer
Alternative
to close, there are at least two or three smaller
ones that you feel positive about. All of them
together could replace this sale, but it‘s always
more profitable to close and service one
customer than several.
Consequence of No Agreement (CNA) – Your
Customer‘s
As always, attempting to analyze the customer‘s
CNA is trickier. In this case, you know their
CNA is to go to your major competitor, and, as
they‘ve hinted, pay less. What‘s tricky, though, is
the total analysis – that is, determining the
positive and negative effects – of their choosing
the competitor over you. The first thing you do
is pull together a team from your side. You
invite one of the company‘s account managers
who worked for your competitor on this deal, a
guy from engineering who just came to you
from the customer‘s organization, and some
additional product experts. You give them an
overview of the situation and ask them to help
you brainstorm all the elements the customer
may be considering when comparing your offer
to their CNA.
After brainstorming you ask the group whether,
from the customer‘s perspective, each element is
positive or negative compared to choosing you.
The team breaks down the analysis in terms of
design of the solution, delivery and installation,
ongoing maintenance, output and long-term
upkeep. They also suggest doing an evaluation
Vol. 10 No. 1
36
Journal of Selling & Major Account Management
of comparative terms and conditions. The
results of their analysis suggest the questions
that must be addressed are:
Flexibility of contracts;
Payment terms; and
Short-term product price.
Design Elements
Whether or not there is an off-the-shelf solution
that fits the customer‘s needs;
How much ―ground up‖ design is needed to
build and test custom aspects; and
How much time / commitment is needed from
the customer for design.
Delivery and Installation Elements
How long will it take?
How long will the customer‘s operation be
down while the machine is being installed? And
How labor intensive will it be for the customer?
Maintenance Elements
How often does the machine break down? What
are the service hours and fees? And
How difficult will it be to train the customer‘s
team to run it?
Output Elements
How many units per hour will the machine put
out?
What is the customer‘s machine‘s defect rate?
And
Can the machine be run ―24 / 7‖?
Upkeep Elements
What do maintenance costs look like in years
two, three and four?
How easily upgradeable is the machine? And
What is the machines expected service life?
Terms and Conditions Elements
Lease vs. buy;
Northern Illinois University
In regard to design, you‘ve determined that your
competitor does have a pretty good ―off-theshelf‖ machine, while yours would require some
customization. Your customization, however,
would be free, and would require very little
customer interface.
In terms of installation, your engineering
department has just found some independent
studies showing that easily customizable
machines – like yours – are also relatively easy to
install, and therefore end up taking about as
much total time to install as less flexible ―off-the
-shelf‖ machines.
As far as maintenance is concerned, the folks in
your engineering department and, especially, the
engineer that just came over from the customer,
say you have a huge advantage in terms of your
machine‘s reliability. Of course, customers aren‘t
likely to tell you that, but it‘s one of your
strengths.
In regard to output, you and your competitor
are pretty close. Their output may be a bit
higher than yours, but since your machines run a
higher percentage of the time, it probably makes
up for the difference. In terms of upkeep,
because of how they‘ve been engineered, your
machines breakdown much less frequently and,
as a result, last longer.
Finally, in regard to terms and conditions, you
and your competitor both offer lease or buy
options, your industry contracts are all pretty
much the same and payment terms are usually
25% at signing, 25% on delivery and 50% when
running. Your ―price‖ is a bit higher, but you‘ve
determined that because of the reliability and
flexibility of your machines, they have less
downtime, easier long-term upgrades and longer
shelf life. As a result, not only does your return
on investment get better after year one, but your
Winter 2010 37
Application Article
product is less expensive to own in years two
and three.
In answering the questions about each group of
elements, you‘ve determined that there is a value
proposition gap between what you have to offer
and the customer‘s CNA (your competitor) in
all but one of them (Output). Based on that, you
feel good about this negotiation, however the
problem is that either your customer doesn‘t
have all the data on its CNA that you do, or it‘s
bluffing.
Wish List – Your Side
You‘ve pulled together your product manager,
pricing manager and someone from the legal
department for this estimation and, after much
wrangling; have prioritized your Wish List of
trades you could offer as follows:
Figure 2.
Wish List – The Other Side
With the help of the account manager who used
to work for your competitor and your pricing
manager, you‘ve estimated the types of trades
this customer has looked for in the past and
developed the following educated guesses for its
Wish List:
You know exactly what the customer‘s CNA is,
and you‘ve done a pretty good job of analyzing
its positive and negative elements. Now, in
order to learn how your customer sees its CNA,
and to educate the customer on it, you prepare
the following questions:
Have you determined how much customization
the two machines will need for installation?
How do you see the impact on your facility
during installation?
Figure 3.
Vol. 10 No. 1
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Journal of Selling & Major Account Management
Do you have a certain amount of time budgeted
for installation?
What are your expectations in terms of machine
downtime?
When the machine breaks down, how quickly
do you expect service?
How much staff retraining do you expect you‘ll
need?
Do you have a figure in mind for year one
maintenance costs?
Do you have figures in mind for costs in years
two through four?
How would you like to handle future upgrades?
Do you complete total cost of ownership
analyses or just compare acquisition price?
Having developed questions to validate your
customer‘s CNA, you now develop questions to
validate its Wish List items, as follows:
I understand you will be looking to negotiate
price, service, upgrades, length of contract,
volume, and man hours to install.
Is that right? Is there anything missing?
Is there anything that should be deleted?
What would you rank as your lead priority? That
is, what should we focus on most? How about
second, third, fourth, etc.?
Do you have any specific targets you‘d like to hit
for each item?
You now send out an e-mail to the head buyer,
Vice President of Manufacturing, Vice President
of Finance and all the other people you‘ve been
selling to, asking them if you can have 15
minutes of their time to better understand their
needs for the upcoming negotiation. If they ask
for them, you can send the questions in
advance. When you get together with them,
whether on the phone or in person, you ask the
Northern Illinois University
easy Wish List questions first to get the ball
rolling, then go on to the CNA questions. You
also bring someone else from your account team
with you to record the customer‘s answers.
Having had meetings with your buying
influences on several levels to validate your
assumptions, you now feel that, even though the
customers didn‘t answer all your questions, you
were able to tighten up your estimations. You
also feel that you succeeded in educating the
customer on many aspects of its CNA as well as
on many of the items to be agreed upon in the
negotiation. Now, taking into account your
interest in length of contract, price and volume,
and the customer‘s concerns for price, service
and upgrades, you devise three customized
offers, equal to you (in that you would accept
any one of them), but very different to your
customer.
Now it‘s May 7th and you‘re ready to make a
presentation—a full week before the customer‘s
due date. You invite the customer‘s head buyer,
Vice President of Manufacturing and Vice
President of Finance, and bring along product
and technical support people from your side.
You open the presentation by thanking the
group for taking the time to answer your
questions a few weeks earlier, and let them
know that doing so went a long way toward
helping you customize three different potential
relationships. You also tell the group that you
realize that if they don‘t choose you they will
choose your nearest competitor, and admit that
your competitor has a pretty good off-the-shelf
solution as well as pretty good output. You also
note that during your earlier conversations, the
buyer and the Vice President of Finance put a lot
of emphasis on price, and that the Vice
President of Manufacturing talked a lot about
―up-time,‖ that is, the reliability of machines.
This is the point at which you present the value
proposition gap you found in your CNA
analysis, specifically:
Winter 2010 39
Application Article
Your machines cast more in short-term price
(year one);
Your machines are X percent more reliable than
your competitor‘s, resulting in:
✶ Higher output (which manufacturing
was concerned with); and
✶ Less maintenance cost (which the
buyer and finance department wanted).
remaining options is most preferable. It‘s
obvious that neither is quite right, so at this
point you begin the trading to come up with one
solution that fits their needs. They keep telling
you that you‘re more expensive; you keep going
back to total costs. They try to push you for
concessions; you continue to trade using both
wish lists. In the end, you settle on this deal:
FINAL AGREEMENT
The combination of higher output and lower
maintenance makes your machines cost less
starting late in year one, then drop by X percent
in years two and three.
Length of Contract: Three years
You tell them that based on their needs and the
value proposition of your competitor, you‘ve
put together three different relationships that
you highlight on a flipchart or PowerPoint
presentation. You briefly provide overview of
some key elements of each, then offer everyone
a handout containing the details of each and go
through them. You now ask them to rank the
three offers in terms of their preference. They
quickly agree that the short-term option as the
least preferable, but there‘s a lot of internal
negotiation among them over which of the
Service: Five days x 24 hours
Figure 4.
Price: $255K per machine
Volume: Three machines
Future Upgrades: 25% discount
Installation Support: 300 hours
What do you think the outcome would have
been if this was negotiated in the traditional
method?
Brian J. Dietmeyer is President, CEO Think Inc!
a global strategic negotiation consultancy. Brian
has nearly 25 years of leadership experience in
sales, marketing and strategic planning. He is
also a sought-after speaker and columnist,
and authored the book Strategic Negotiation: A
Breakthrough Four-Step Process For Effective
Negotiation. You can reach Brian at bjd@ethinkinc.com.
Vol. 10 No. 1
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Journal of Selling & Major Account Management
From Checkers to Chess
Positioning-to-WinTM in Complex Selling Environments
By Curtis Brooks
Do these sound familiar?
―Articulate your business proposition in the context of executives’ pain points.‖
―Lead with a strong value statement and reference story to illustrate the value of solving the
customer’s problems.‖
―Highlight unique differentiators and specific quantifiable business value to establish
credibility.‖
Experienced B2B sales executives should recognize these catchphrases as the predominant themes for
properly executing a complex sell. But to initiate and establish new relationships with senior customer
audiences – the discipline commonly referred to as ―Positioning”, the guidance above is obsolete.
‗Checkers-to-Chess‘ as a metaphor represents the degree to which market dynamics have changed the
game. Today‘s environment necessitates a skill-set to satisfy the prospect‘s growing demand for vendors
who serve as catalysts for big ideas.
Sales organizations that have developed this proficiency are differentiating beyond their direct
competitors and maximizing the potential of their existing sales methodologies to improve their
win rates.
PLAYING CHECKERS
Baffled. That‘s how one executive described
attitudes of top officials at one of the world‘s
preeminent software vendors as they gathered
to discuss a mission-critical issue in early
2009.
Despite a world-renowned brand name, rock
solid value proposition and a corps of senior
sales executives who‘d been trained in the
latest methods of ―solution-selling,‖
the
company was failing miserably in attempts to
access and establish relationships with senior
officers of targeted accounts.
Two dynamics made this issue a high priority:
1. The product set had evolved to help shape
clients‘ strategic agendas, yet they had
created few opportunities to showcase the
software‘s true potential.
Northern Illinois University
2.
Revenue growth from current customers
produced thinner margins.
The existing sales methodology had served the
company well in their hyper growth period ‘98‘08, but the recent track record of simply
initiating a substantive conversation with a
prospect business-unit head, prominent EVP or
CFO was abysmal.
This wasn‘t a new problem. A year earlier
leadership authorized nearly half-million dollars
to add more definition to the strategic sales
framework – with emphasis on tailoring go-tomarket messaging for the C-level community.
The impact was minimal at best.
Fortunately, there was an opportunity to analyze
the few success stories from the previous 18
months.
The analysis included a thorough
review of ‗new logo‘ wins initiated from
Application Article
from high-level relationships. The details that
emerged were ironic; successful sales
representatives had actually abandoned most, it
not all, of the ―solution-selling‖ techniques in
their positioning activities. Many of the tatics
these people employed were counterintuitive to
the value-selling philosophies which had been
hard-wired into their sales culture over the past
10 years.
In an attempt to pinpoint the specific position
behaviors, one of the sales managers summed up
the dilemma by presenting a slide titled:
―WHAT‘S WORKING: CONFOUNDING
DATA.‖
He noted that several high performers:
Had failed to focus on the prospect ‗pain
points‘
didn't‘ bother highlighting key differentiators
early in the cycle
Asked very few needs=based questions
Virtually ignored the advice of trying to
become the customer‘s ‗trusted advisor‘.
They determined the tactics were more
instinctual than intentional, but a formal
corporate-wide program launched to replicate
the techniques improved the success rate of
engaging senior executives in previously
―impenetrable‖ accounts from 5% to 38%. The
results confirmed the skill sets they had
developed to advance a qualified deal were now
insufficient in helping create demand. It became
obvious that initiating new relationships
demanded a distinct set of competencies, largely
absent from the solution, strategic or
‗consultative‘ sales philosophies of the past 15
years. The changes required are analogous to
transitioning from playing checkers to playing
Winter 2010 41
chess. The foundation for the transformation
starts with appreciation for the current dynamics
affecting the decision maker‘s mind-set.
MARKET FORCES HAVE CHANGED
THE GAME
The market uncertainty has instilled more
pragmatism among decision makers as they
weigh a vast array of factors to arrive at the ideal
balance of risk and reward. The emergence of
increasingly elaborate operational models
magnifies uncertainty because the consequences
of any decision can ripple with unprecedented
speed across business ecosystems. This was
confirmed by a recent IBM study which
identified complexity as the primary challenge
facing today‘s corporate leaders.
The combination of complexity and uncertainty
is a challenge for sellers trying to capture and
hold a prospect‘s attention (Figure A).
Complex/risk-averse organizations rarely
operate in a logical, sequential manner—this is at
odds with the problem-solution formulas
incorporate din most modern sales
methodologies.
The selling models have fashioned a propensity
to address multi-dimensional problems with
single dimensional solutions. It‘s no wonder
executives are cynical to vendor approaches.
While the message appear rational on the
surface, they‘re often impractical in
application—to the extent many executives
report being offended by what they view as overly
simplistic solution statements emanating from
salespeople. Few approach strategies are in sync
with the iterative leadership styles born of
today‘s unpredictable business atmosphere.
The other side of the game-changing equation is
impacted by the predominance of ―value
messaging‖. So much so, one approach barely
Vol. 10 No. 1
42
Journal of Selling & Major Account Management
Figure A
Corporate
Decision Makers
Burdened with
Unprecedented
Complexity &
uncertainty
Market Forces
Cynical to
Simplistic
‗solutions‘
Impact
Inundated with
:‖Value Messaging‖
Apathetic to
Predictable
propositions
Positioning
―Game Changers‖
distinguishes itself from another. Relying on
similar proposition formulas, vendors produce
positioning messages almost identical in
construct, with…
Predictable openings, i.e,; “Your problems,
challenges, issues, opportunities.”
Obvious themes to establish credibility, i.e.,
“We helped others, we can help you.”
than motivating the prospect to investigate.
Recent findings from research from Corporate
Executive Board, as part of their work in
defining ―The Sales Challenger‖™ validate these
points. Their study in rating the effectiveness of
an ROI pitch determined that few executives are
influenced by someone else‘s ROI calculations.
Convenient conclusions .i.e,; “Improved
customer service, increased efficiency, reduced cost,
etc.”
The outcome of their analysis led CED
researcher, Timur Hicyilmaz, to conclude:
―Everybody already assumes you offer some
hypothetical value; thus, most people aren‘t
going to be very excited by the idea you have
value to deliver. You‘d never be talking to them
if they thought otherwise.‖
Executives have been inundated with these
scripted techniques for nearly 20 years, fostering
apathetic attitudes. These days when value
positioning does work, it‘s more a reflection of
being in the right place at the right time, rather
In addition to sounding like everyone else, the
other surprising flaw of these value positioning
messages is the paradox created by leading with a
prospect business issue - because in the
explanation of how the problem is solved, the
Convenient conclusions, i.e., “We helped
others, we can help you.:
Northern Illinois University
43
Journal of Selling & Major Account Management
statement must be punctuated by introducing the
product or service—and when this happens, it
triggers the buyer‘s preconceived (and often
limited) view of value.
In summary, despite the seller‘s best intentions
to establish a value-based conversation, it‘s
nearly impossible when you‘ve announced what
you intend to sell.
CASE STUDY
A large management consulting firm is
experiencing this game-changing dynamic
firsthand. They‘re so eager to capitalize on a
new set of advisory services for cloud computing
because the technology‘s impact has enterprisewide implications for their customers. In fact,
the company contends non-technology managers
should be their biggest supports.
To capture the attention of the business-line
audiences, the company‘s account managers
initiate their approach by demonstrating
knowledge of the prospect‘s operational
challenges. This sets up a message structure that
can only logically be completed by outlining the
solution (the cloud) - They‘re invariably typecast
in the process, commoditized among countless
other vendors with cloud-based offerings.
As the company‘s sales VP summarized, ―it‘s
sort of a trap, almost maddening dilemma.
When we conclude our business proposition
with the solution we‘re labeled as technologists,
so it‘s always a direct path back to the IT guys.‖
Overcoming decision-maker apathy and
cynicism requires a paradigm shift in two areas:
1. Gathering and Application of Intelligence
2. Adopting a New Positioning Objective.
Northern Illinois University
The Opening Move
1) In the B2B environment, the typical approach
for prospect research is to capture enough
information to set up some form of a value
proposition.
To do so, salespeople are
conditioned to identify customer problems,
goals, or ―triggering‖ events from press releases,
annual reports, trade journals or business
information services (i.e., Hoovers® or One
Source®).
Given predominance of sales representative predisposed to rely on virtually the same sources, it‘s
not surprise executive are apathetic to the
various propositions. ON occasion an insider
referral or specific solution experiences could
yield the seller more insight, but those sources ar
unsustainable data points to create demand
consistently. To address the issue vendors must
adopt a thought process for research that applies
provocative treatment to ―multi-dimensional
intelligence‖. The key to this approach is to stay
away from the conventional sources which
produce client‘s ―pain points‖ and the typical
industry buzzwords—go beyond the survace
level insight and augment the intelligence by
formulating a message pattern which encourages
open dialogue. Combine unexpected substance
with an engaging style. For example, the set of
collected information fro the target company
might highlight:
The branded initiatives of their indirect
competitor
Provide commentary of their supplier KPI‘s
Hypothesizing about the direction their
constituent‘s trending behaviors.
Then, frame this research in a compelling light
Winter 2010 44
Application Article
Figure B‘s right column demonstrates the
contract this approach creates relative to
traditional techniques. The example is based on
the assumption the target company is Charlottebased utility Duke Energy.
Rather than
structuring the messaging around typical jargon
(i.e., ―green energy‖) and obvious pain points
and challenges as shown in the left column, you
should present more insightful information in a
constructive tone, as outlined in the right
column.
This was the instinctual approached used by the
high performers of the software firm highlighted
in the first section. Alter leadership collected the
set of messaging that initiated several key wins,
they recognized this tactic as being significantly
more intriguing to their target audiences—
opening doors that have been closed for years and producing the nearly six-fold improvements
in positioning performance to key target
audiences.
To apply this thinking consistently, the company
developed an ‗intelligence roadmap‘; essentially a
research framework specifically designed to
orient sales teams toward less-obvious multidimensional content related to their prospects.
For maximum impact they conducted a series of
internal workshops focused exclusively on the
contextual application of the research. It may
seem as though the thought process the firm
adopted is over-engineered just to get properly
positioned, but it‘s the price to be paid for
inheriting the negative biases prospective buyers
It may seem as though the thought process the
firm adopted is over-engineered just to get
properly positioned, but it‘s the price to be paid
for inheriting the negative biases prospective
buyers have formed as a result of being
inundated with messaging which simply plays
Figure B
Target Company: Duke Energy—April 2011
$16B/yr. Regional Power Company
Typical Positioning Talking Points
Sample Sources: Annual report, press releases, Hoovers®, etc.
Multidimensional Talking Points
Sample Sources: Indirect competitor’s analyst report, supplier KPI’s. etc.
Potential Pain Points:
Implications of:
Exposure to POLR when approaching market
$13 B Acquisition integration initiative of Progress
leading MMWh targets
Energy
Low income customer mix potentially 18% by
Preparing for a new regulatory model
2014
Limited capital for Smart-grid investments to drive
Demand-response aggregators
green energy program
Significance
of:
Stated Challenges
Dominion Power‘s 8% CAGR target for 2013
Corporate mandate of On-budget/On-time for magas transmission investment
jor capital projects
―Off –grid hybrid‖ power
Fleet modernization required
Driving F.E.G. nuclear fuel CAPEX>13% in
Require Capital for enhanced utility platform
2012
CHECKERS
CHESS
Vol. 10 No. 1
45
Journal of Selling & Major Account Management
back their published agendas.
This sort of preparation, where the emphasis is
on the prospect‘s ―value chain‖ rather than the
prospect itself, allows sales teams to craft
approach strategies with more creative freedom.
Also, the approach produces more compelling
and differentiated content, so it substantiates the
―call high‖ mandate. As long as the messaging is
absent subservient language, isn‘t gimmicky, and
retains focus on the value chain dynamics, it
serves to elevate the salesperson.
Those who have applied these methods report
several additional advantages:
Provides flexibility for a communication
format that doesn't have to accommodate
the problem-solution-value message
structure
Generates intensely distinct messaging,
appealing almost exclusively to the recipient
and his/her peers—nearly to the extent the
content and meaning is recognizable to only
the primary recipients (right column, Figure
B)
Helps demonstrate original thinking,
refreshing to the prospect because it‘s so
distinctive from the rigid, recognizable
patterns of scripted value propositions
Establishes out-of-the-gate credibility
because it‘s more aligned with the thought
process decision-makers have adopted in this
ear of uncertainty and complexity
The New Positioning Objective
2) The second component of succeeding in the
new game starts with rethinking the purpose of
initial interactions with prospects.
The
conventional objectives for an initial meeting
have relied on tactics which qualify the prospect,
Northern Illinois University
uncover needs through ‗intelligent‘ questions,
product education or simply building rapport.
Now, to address the impact of the market forces
and leverage an updated messaging capability,
the objective should be to create the ideal
conditions for ideas to flourish. This is largely
driven by the customer‘s demand for an
experience to contrast the predictable
interactions of the consultative selling era.
It‘s a tough but necessary concept to grasp for
senior salespeople who have risen to the top
with superior questioning and closing skills. But,
there‘s overwhelming evidence to support this
shift. Many of today‘s senior managers suggest
corporate strategy is best expressed as an
integrated set of choices. To that end, many
companies have implemented formal programs
where the sole focus is to promote creativity.
In turn, executives are placing a premium on the
speedy generation of ideas as they operate by the
―Innovate or Die‖ mentality. In this way, the
treatment of multi-dimensional information
gathered in the research phase helps the sales rep
strike the balance between being prematurely
prescriptive and serving as a constructive
resource at the same time.
The objective will be to inspire critical thinking
by presenting a level of insight that‘s slightly
outside the boundaries of the decision makers
day-to-day purview. Lest one believes this new
objective resembles a ―trusted advisor‖, don‘t
flatter yourself. Few salespeople have Harvard
MBA‘s. Executives have countless options for
sound strategic advice, and they know their
business better than a salesperson ever will.
This new positioning objective tracks closely
with the tenants of Edward Bono‘s management
concept ―Lateral Thinking‖. Bono has assigned
a deliberate systematic process to thinking
46
Journal of Selling & Major Account Management
creatively by contrasting two kinds of thinking.
―Most Managers are educated to think vertically
from one logical step to another. We are not
usually taught to spark imaginations. As a
process, lateral thinking is concerned with
driving change, not proof,‖ says Bono. In
following this objective, the ideas that will help
executives transform their organizations should
flow through the sales representative—and this
experience doesn‘t necessarily have to involve a
discussion of the salesperson‘s product or
service.
This is the essence of the new
positioning game.
efficient problem diagnosis process later in the
cycle. The tactics employed made the solution/
consultative sales training more impactful.
But, what about actually selling something? The
old-schoolers would argue this call plan objective
puts sales forces in the wrong frame of mind.
Quotes and commitments need to be met and a
status report which suggests the goal is to inspire
the client to ―think creatively‖ doesn‘t exactly
drive the sense of urgency demanded by chief
sales officers. However, the alternative is either
never gaining access and/or being stereotyped in
the process.
Most companies focus on developing messaging
that‘s distinct from their direct (or indirect)
competitors—buts it‘s not enough. To execute
the new objective, leadership must be committed
to raising their standards. The goal has to be to
create an experience that has sharp contrast from
every other vendor.
To that end, the software firm highlighted in the
opening is among organizations who have found
these tactics actually shortened the sales cycle by:
Securing executive
sponsorship
(business
line)
This isn‘t surprising to Ed Bono, who
comments: ―Lateral thinking works at an earlier
stage than vertical thinking.
It‘s used to
restructure the pattern in the way a situation is
viewed. Vertical thinking then accepts that
pattern and develops it.‖
The other aspects of the new positioning
objective is to establish a vision to differentiate
the vendor from the market as a whole.
Sales organizations should go to market with the
idea their prospect interactions ar driving
preference relative to any other alternative the
executive may have to filling his/her calendar.
It‘s a tall order, but it ensures consistent access
to the internal resources for the reengineered
research process.
(Detail regarding the
establishment and execution of this objected
outlined in Checkers to Chess Part II)
Exposing dormant opportunities
KISS THE CHECKERS GAME GOODBYE
Creating sole-sourced pursuits
All indicators point to a positioning game that
has permanently changed. The IBM study
(Figure C) confirmed ― a rapid escalation of
complexity is the biggest challenge confronting
executives, and they expect to continue indeed,
to accelerate in the coming years.‖
The company‘s analysis also revealed the sales
reps had not totally disregarded the exisiting sales
process—they just elected not to rely on
solution selling for positioning. It was
determined the intelligence and call plan
strategies were actually complementary to their
current sales framework by setting up a more
Northern Illinois University
More importantly, particularly for vendors, the
same study identified ―creativity‖ as the single
Winter 2010 47
Application Article
most important leadership competency for
enterprises seeking a path through this
complexity.
The winners in the complex environment will
tap into the demand for this quality in order to
get properly positioned.
The long term implications are even more
significant, particularly for vendors whose
products and services are growing in strategic
relevance. For these companies, the market
dynamics which make it more difficult to get
The winners in the complex environment will
tap into the demand for this quality in order to
get properly positioned. are imminent
Addressing the challenge requires:
An acknowledgement that nearly all solution
and strategic selling frameworks are not
structured to address today‘s realities,
particularly for positioning activities.
process for positioning research, standards
and objectives.
These actions will impact the sales organization‘s
ability to win in a game where superior
positioning is the key to consistent, profitable
performance.
Curtis Brooks is a Principal with the Magis
Group, LLC., a business execution firm. Email:
cbrooks@themagisgroup.com
REFERENCES
Bone, Edward de. ―Lateral Thinking: Creativity
Step by Step.‖ Harper Colophon (August
29. 1973).
IBM Corporation. ―Insights from the Global
Chief Executive Officer Study‖, IBM
Institute for Business Value, May 2010.
A commitment to instilling the right thought
Figure C
Top Leadership Qualities
Creativity
60%
Integirty
52%
Global Thinking
Influence
Openess
35%
30%
28%
Dedication
26%
Focus on Sustainability
26%
Vol. 10 No. 1