Managing International Sales Teams
Impact of Cultural Performance Orientation
As international sales forces increase, the question of standardized management becomes more pressing. The research of Dominique Rouziès, Vincent Onyemah, and Nikolaos Panagopoulos suggests, however, that the effectiveness of sales force control models are largely influenced by national culture.
Salespeople, the main tool to increase sales, are a force to be reckoned with in companies. Situated on the border between companies and customers, this population of employees plays a key role in business performance. "We don't talk about it much, especially in France. However, without salespeople, in most cases, there is no business," says Dominique Rouziès. And this group of people is even more interesting to study provided that it is caught between competing demands from sales management and customers, creating difficult to manage stress. "They are both ambassadors of their company for their customers and ambassadors of their customers within their company. They must not only meet growing customer expectations but also ensure that their own company honors its promises. And this must be done in a context where the number of people involved in the sales process has increased significantly and has also internationalized." How can you optimize sales force control models (set of procedures to align, guide, evaluate, and pay)?
INTERNATIONAL SALES FORCES
In this article, Rouziès, Vincent Onyemah, and Nikolaos Panagopoulos seek to determine the impact of control systems—which many companies standardize— on the behavior and performance of sales teams. "We looked at the management of sales people in international environments because there are more and more companies with sales forces responsible for clients spread across the globe," says Rouziès. "In general, there are significant differences fromone country to another, which means when you try to standardize, you are confronted with numerous difficulties. This raises questions that existing research has yet to answer."
THE IMPORTANCE OF NATIONAL CULTURE
The authors examine the influence of several national cultures on the way in which sales force control systems affect the behavior and satisfaction of salespeople. "You can go so far as to say that there are two philosophies: outcome control and activity/behavior control," explains Rouziès. "In the first case, no matter how you work, the only thing that counts is achieving objectives. In the second case, no matter the objective, the only thing that counts is how you work." They show that national culture has a strong effect on the way salespeople allocate their efforts. In particular, the results suggest that the more companies use behavior controls with their salespeople, the less attention they pay to customers and the more emphasis they place on their supervisors and administrative tasks. "Customers don't evaluate salespeople; their supervisors do. Sales people devote more effort to their relationship with their supervisor than to their customers, and company objectives are not met." On the contrary, with outcome-based control, salespeople focus more on their customers and less on their supervisors or administrative tasks.
MORE SATISFIED SALESPEOPLE
The importance of performance in a national culture (the way innovation, excellence, and performance improvement are encouraged and rewarded) appears to significantly reduce some adverse effects of control (e.g., the fact that sales people aremore concerned with their supervisors than their customers). It even seems to increase the satisfaction of salespeople in the case of behavior-based control.
This phenomenon is not negligible. "According to a recent study, the turnover of salespeople is around 12 to 15%," says Rouziès. "It's a serious and costly problem in terms of opportunity costs, recruitment costs, training expenses, and so on."
Salespeople's satisfaction is even more important for companies as baby boomers prepare to retire, threatening sales management with a shortage of experienced labor.
FINDING THE RIGHT BALANCE
Whether they adopt behavior or outcome controls, sales managers in international companies face a dilemma. If they rely on behavior controls, customers will likely receive less attention; if they focus on outcomes, salespeople will neglect their supervisors and perhaps become less committed to the company. Rouziès adds that these two effects are more pronounced in countries with high performance orientation. "You have to find the right balance," the researcher says. "Organizations need to develop mixed sales management systems to have more satisfied, and thus productive, salespeople as well as a more competitive company."
Based on an interview with Dominique Rouziès and the article "How HRM Control Affects Boundary-Spanning Employees' Behavioural Strategies and Satisfaction: The Moderating Impact of Cultural Performance Orientation" (The International Journal of Human Resource Management , 2010, vol. 21, n° 11, pp. 1951-1975), co-written with Vincent Onyemah and Nikolaos G. Panagopoulos.
Applications for businesses
The identification of the means to align salespeople’s behavior with business goals in an international environment is an important contribution. By analyzing the influential role of culture, Rouziès, Onyemah, and Panagopoulos show how companies tend to create counterproductive conditions where their sales teams focus more on their supervisor than their customers. The researchers also open the door to new research, primarily to better understand the conditions than can lead the most valuable salespeople to leave their company.
Rouziès, Onyemah, and Panagopoulos first examined the behavioral strategies and the satisfaction of salespeople based on different control systems. Then, using primary data obtained from1,049 salespeople in six countries (France, Ireland, Italy, Spain, United Kingdom, and the United States of America) and secondary data on cultural performance orientation, they conducted multilevel regression analyses.
The objective was to test different hypotheses regarding the influence of control systems on sales people in an international context.