Incentives in the Asian Context: Theory and Preliminary Evidence

Incentive design for productivity gains has become important for Asian organizations in recent years. This paper introduces the theory of incentive design to an Asian audience while extending the agency theoretic approach to control. Hypotheses derived from this theory were tested in 61 retail stores in Singapore. The results show that employee skills, output measurability and task uncertainty impact incentive design. The results indicate that agency theory may be applicable across cultures. Implications for the Asian context, and its adaptation in terms of behavior, are discussed.     

Incumbent and non-incumbent salesperson consultation in the pre-decision stage of organizational purchasing

Given the complexity (e.g., digitization, customization, and scale) of modern business solutions, salespeople increasingly seek to influence the pre-planning stages of buyer decision making to increase effectiveness. During the early stage of organizational buying, salespeople can align their firm's capabilities and expertise by offering input on problem definition, before a solution is sought. However, surprisingly little is known about the role of salespeople in the period before a buying firm decides to officially address a problem and seek vendor solutions. Thus, our research focuses on the inclusion of both incumbent salespeople (strong ties to the buying organization) and non-incumbent salespeople (limited, or non-existent, ties to the buying organization) in pre-decision phase information sourcing of buyers. Drawing upon theory from social network and problem solving literatures, we develop a contingency model to illustrate pre-decision phase conditions based on problem framing, structure, and urgency that make incumbent or non-incumbent salespeople more likely to be sources of information. We test our hypotheses across a series of scenario-based experimental studies conducted with purchasing managers. Our findings suggest situations where incumbent and non-incumbent salespeople have a greater likelihood of being positioned to engage in pre-decision stage planning with customers.     

The psychological costs of pay‐for‐performance: Implications for the strategic compensation of employees

Most research linking compensation to strategy relies on agency theory economics and focuses on executive pay. We instead focus on the strategic compensation of nonexecutive employees, arguing that while agency theory provides a useful framework for analyzing compensation, it fails to consider several psychological factors that increase costs from performance‐based pay. We examine how psychological costs from social comparison and overconfidence reduce the efficacy of individual performance‐based compensation, building a theoretical framework predicting more prominent use of team‐based, seniority‐based, and flatter compensation. We argue that compensation is strategic not only in motivating and attracting the worker being compensated but also in its impact on peer workers and the firm's complementary activities. The paper discusses empirical implications and possible theoretical extensions of the proposed integrated theory. Copyright © 2012 John Wiley & Sons, Ltd.     

The strategy/governance structure fit relationship: theory and evidence in franchising arrangements

Despite widespread recognition of the importance of strategy–structure fit, e.g., diversification and divisionalization, research has yet to address the possibility of similar fit issues for other structural forms of organization, such as the choice of franchised vs. company‐owned governance structures. In this study, we depart from the usual debates regarding the superiority of one governance structure over another and argue that performance differences between these two alternative governance structures may be attributable more to the matching of one structure with a correspondingly appropriate strategy. Specifically, we posit that stores will act in fit‐enhancing ways by pursuing strategies that are more congruent with their governance structure; i.e., that franchised stores, with their more flexible and decentralized structures, will be more likely to pursue strategies that emphasize flexibility and local adaptation, whereas company‐owned stores will tend to pursue strategies that emphasize predictability and control. We also argue that those stores acting in such a manner will enjoy subsequent performance benefits. We develop these ideas around strategy/governance structure fit and test our hypotheses using longitudinal data from over 6000 stores within one of the biggest U.S. restaurant chains from 1991 to 1997. Copyright © 2004 John Wiley & Sons, Ltd.     

Executive compensation in Asia: A critical review and outlook

In this research we conduct a systematic and critical review of the literature on executive compensation in Asian countries. We discuss the particular characteristics of executive compensation in Asia in terms of pay criteria, contingency factors, and implications for performance and turnover. We thereby highlight the unique contributions of Asian studies to the mainstream Western research in executive compensation, and call for future research integrating agency theory and the institution-based view in examining pay variances across different institutions.     

Impact of sales force automation on technology-related stress, effort, and technology usage among salespeople

This study unveils factors affecting sales force automation (SFA) technology usage by salespeople. It differs from previous research by: (1) proposing a model that examines the consequences of task complexity on role perceptions and technology usage, and (2) understanding the negative repercussions of SFA technology on the user. The proposed model was tested using data from 150 salespeople employed by a national organization. The results suggest that integration of SFA technology induces adverse role perceptions in salespeople. However, controlling for extraneous variables, effort is significantly related to salespeople's usage of technology. Key managerial implications for theory and practice are discussed.     

The Effect of Sales Force Adoption on New Product Selling Performance

Although several studies have suggested that the sales force is a major contributing factor to new product success, few studies have focused on new product adoption by the sales force, particularly with respect to its relationship with selling performance. The present article presents empirical evidence on the impact of sales force adoption on selling performance. We defined sales force adoption as the combination of the degree to which salespeople accept and internalize the goals of the new product (i.e., commitment) and the extent to which they work hard to achieve those goals (i.e., effort). It was hypothesized that the impact of sales force adoption on selling performance will be contingent on supervisory factors (sales controls, internal marketing of the new product, training, trust, and supervisor's field attention), and market volatility. Therefore, this article also provides evidence of the conditions under which sales force adoption of a new product is more or less effective in engendering successful selling performance. The hypothesized relationships were tested with data provided by 97 high technology firms from The Netherlands. The results show that sales force adoption is positively related to selling performance. This finding suggests that salespeople who simultaneously exhibit commitment and effort will achieve higher levels of new product selling performance. Outcome based control, internal marketing and market volatility are also positively related to new product selling performance. The effect of sales force adoption on selling performance is stronger where outcome based control is used and where the firm provides information on the background of the new product to salespeople through internal marketing. Training and field attention weaken the adoption‐performance linkage. These findings may indicate that salespeople in The Netherlands interpret training as “micromanaging” and field attention as “looking over their shoulder.” We conclude with implications of our study for research and managerial practice.     

Understanding firms’ relative strategic emphases: An entrepreneurial orientation explanation

Top management’s choices regarding strategic emphases (e.g., value-creation versus value-appropriation) are an important component of firms’ success. While extant research has explored the effects of strategic emphasis on firm performance, few studies have examined the factors that affect top management’s strategic emphasis choices. The study addresses this gap by examining the relationship between management’s entrepreneurial orientation and its relative strategic emphasis on value-creation versus value-appropriation. In addition, it investigates the moderating roles of relative performance, compensation strategy, and capital market patience, on the above relationship. Using a multi-source dataset of 337 Standard & Poor (S&P) 500 companies from 2007-2015, we find that entrepreneurially oriented managers tend to focus more on value-creation (e.g., new product development) over value-appropriation (e.g., advertising), but this influence is contingent on, at least, three factors: (1) relative firm performance, (2) compensation strategy, and (3) capital market patience. The study provides a broad theoretical foundation that explicates key factors that influence firms’ resource allocation decisions.     

The frequency of monetary compensation for salesmen

Sales managers have recognized that money is the primary means for motivating salespeople. Although much has been written about compensation plans, the focus of these efforts has been on objectives, type of plan, and size of reward. Little emphasis, however, has been directed to the frequency with which salespeople actually receive compensation. Research from nonmanagerial disciplines suggests the use of different schedules of compensation may positively affect sales-force motivation. The article outlines alternative compensation schedules and discusses the potential implications on sales-force productivity.     

A psychometric assessment of the Lennox and Wolfe self-monitoring scale in the sales force

In today's turbulent business environment, salespeople and sales managers must constantly adapt to changes. Self-monitoring, i.e., the cognitive ability to adapt one's own behavior in response to the behavior of others, may be a meta-KSA (knowledge, skill, or ability) that influences adaptive selling behavior. To assist researchers and practitioners seeking to identify and improve the self-monitoring skills of salespeople, this study investigates Lennox and Wolfe's (1984) self-monitoring scale with a sample of salespeople and one with sales managers. Although a hypothesized relationship between self-monitoring and job performance was supported partially, our results highlight potential problems with the measure. Further investigations are needed to determine whether or not the problems lie with the scale or the concept of self-monitoring in a selling context.     

The Effects of Formal Controls on Supervisee Trust in the Manager in New Product Selling: Evidence from Young and Inexperienced Salespeople in China*

How should sales managers enhance the support and commitment of young, inexperienced salespeople during a new product selling? Some scholars have suggested sales managers should use formal controls (i.e., output and process controls) to develop the salespeople's trust in their benevolence. Drawing on a sample of young, inexperienced salespeople with rather low education selling new products in China's competitive, volatile, and transitional economic environment, the present study investigates the relationship between output and process controls and supervisee trust (i.e., the salesperson's trust in the sales manager). The empirical results of the study suggest that process and output controls have differential effects on supervisee trust. Specifically, the results indicate that process control enhances supervisee trust by itself and also under conditions of intense training for new product selling and when market volatility is perceived as high. However, process control hinders supervisee trust when the manager is long‐term oriented and engages in participative supervision. It was found that output control engenders supervisee trust when the manager is long‐term oriented but hinders supervisee trust when salespeople have undergone intensive training for new product selling. Implications of these results are provided for both researchers and practitioners involved in launching and selling new products.     

The moderating effect of control systems on the relationship between commission and salesperson intrinsic motivation in a customer oriented environment

Using a social psychology theory, Cognitive Evaluation Theory (CET), the authors show how commission compensation can be viewed as a sales performance contingent reward and the extent of its use to reward performance, coupled with a sales control system, impacts salesperson intrinsic motivation in a relationship selling environment. In essence, the sales control mechanisms modify the impact of the commission based on whether it is perceived as controlling or informative. This is empirically tested using a sample of business-to-business salespeople. Partial support for three hypothesized relationships is shown providing preliminary evidence that CET is a way to study the integration of commission compensation rewards, sales control systems, and motivational impact. Implications of the findings for theory and for managers are considered, along with suggested directions for future research.     

Salespeople's work toward the institutionalization of social selling practices

While the use of social media has become widespread among business-to-business organizations, the diversity of the social selling practices undertaken by salespeople and the extent to which they rely on them for their sales approach remain limited. Contrary to previous studies that emphasize the benefits of top-down approaches, we adopt a salesperson-centric approach, with the belief that the salesperson's agency is a key factor in the development of new sales practices related to social media. Using the concept of practice work and building upon institutional theory, we argue that social selling practices emerge in a bottom-up way, depending on the work initiated by salespeople. Based on a qualitative study of 32 B2B sales professionals, we show that salespeople perform three kinds of practice work: promotion, reconciliation, and disruption. These efforts can diffuse but also thwart social selling practices in sales organizations. This article offers new insights into how organizations can develop salespeople's depth of social media usage, and encourages firms to support salespeople's social selling initiatives instead of controlling them.     

Managing salespeople strategically when promoting new products – incorporating market orientation into a sales management control framework

Salespeople play a pivotal role in promoting new products. Therefore, managers need to know what control mechanism (i.e., output-based control, behavior-based control, or knowledge-based control) can improve their salespeople’s new product sales performance. Furthermore, managers may be able to assist salespeople in performing better by having a strong market orientation. The literature has been inconsistent regarding the effects of sales management control mechanisms and has not yet incorporated market orientation into a sales management control framework. The current study surveyed 315 Taiwanese salespeople from publicly traded electronics companies with the aim of contributing to the sales management literature. The results show that sales management controls can directly affect salespeople’s innovativeness, which, in turn, affects new product sales performance. However, sales management controls cannot affect performance directly. Furthermore, market orientation can positively moderate the relationship between salespeople’s innovativeness and new product sales performance.     

顾客集中与管理层治理——基于薪酬契约和代理成本的视角

本文以创业板上市公司为研究样本，从薪酬契约和代理成本的视角，检验了顾客集中与管理层治理的关系。实证分析结果显示，顾客集中度与高管薪酬和代理成本存在显著负相关关系。结果表明：顾客集中显著影响公司薪酬契约，顾客集中降低了高管薪酬；顾客集中降低代理成本，减轻管理层代理冲突问题。这些研究结论丰富了公司治理的理论内容，同时对于缓解公司代理冲突、改善公司治理矛盾具有重要的现实意义。     

Designing sales force satisfying selling positions: a conjoint measurement approach

To design selling positions that appeal to both new and incumbent salespersons, management needs to understand salespersons' preferences for job characteristics. The study reported here exemplifies an effort to operationalize salespersons' preferences for job and task characteristics that takes account of both career stage and gender. Findings indicate that salespeople in the sample prefer salary-based compensation and that female salespeople prefer sales jobs that are fixed in location.     

Commitment to technological change,sales force intelligence norms,and salesperson key outcomes

Despite increasing interest in sales technology investments, companies continue to struggle with getting their salespeople to use these expensive technologies. In this context, two under-researched issues warrant attention. First, although sales technology represents a continuous source of change, little is known about why salespeople commit to technology-induced changes. Second, knowledge on whether sales force intelligence norms play a role into translating use of sales technology to performance gains is remarkably sparse. To address these gaps, this study develops a conceptual framework that explores the linear and non-linear effects of commitment to technological change (i.e., affective, normative, and continuance) on sales technology infusion, and, in turn, on two key outcomes (i.e., customer-oriented selling and sales performance). Our framework also advances knowledge on how sales force intelligence norms (i.e., analytical sales processes and knowledge sharing with customers) moderate the relationships between sales technology infusion and key outcomes. Analysis is done using multilevel structural equation modeling on a sample of 303 salespeople nested within 22 firms. Findings support the view that the three components of commitment are distinct, with some counter-intuitive results. Specifically, affective commitment does not exert a significant positive influence as expected; yet, normative commitment does. In contrast, while lower levels of continuance commitment reduce infusion, higher levels have positive effects, thus depicting a U-shaped effect. Finally, sales technology infusion influences both key outcomes — and findings support the importance of fostering sales force intelligence norms. Implications of the study are discussed.     

Getting business-to-business salespeople to implement strategies associated with introducing new products and services

Strategy implementation remains a perennial challenge for firms. While several studies have examined implementation phenomena at the firm level, we know little about what firms can do to get their salespeople to implement strategies for new products and services. Understanding salespeople's individual-level implementation is of particular importance as salespeople are the frontline employees of the firm responsible for implementing strategies with customers. Drawing from motivation, opportunity, and ability (MOA) theory, this examination investigates factors impacting the implementation of strategies associated with introducing new products and services by the salesperson. We use a sample of 277 business-to-business salespeople to test our hypothesized relationships. The findings show both positive and negative moderation among the implementation MOA variables and also provide broad support for their proposed drivers. Additionally, the identified implementation facets of responsiveness and effort are found to positively impact implementation success.     

It ain't over 'til it's over: Evaluating reacquisition opportunities in business-to-business markets

Using a qualitative critical incident research technique, this paper examines how sales firms evaluate defected customers in order to determine their worthiness for reacquisition. Findings from interviews with fifty professional salespeople suggest that, when sales firms assess reacquisition opportunities, these opportunities are evaluated based on the likelihood of reacquisition and the value of the customer (i.e., ease of reacquisition and value of the customer). Salespeople report that the barriers to reacquisition, leveraging remaining customer relationship and investigating their own value-adding capabilities are critical in determining the ease of reacquisition. In addition, salespeople report that account size, profitability, market influence and cross-selling potential are fundamental in determining the value of a customer. Furthermore, the importance of ease and value in reacquisition assessments varies with (1) the reason for the customer defection, (2) the formalization of a firm's reacquisition process, and (3) market opportunities. Managerial implications and future research directions are discussed.     

Industrial buying during the coronavirus pandemic: A cross-cultural study

With the onset of the 2020 coronavirus pandemic, industrial suppliers are increasingly challenged to close their open sales opportunities and keep generating business. Against this backdrop, the authors of this study investigate which offerings industrial customers are most likely to purchase as the pandemic progresses. Drawing on positive decision theory and empirically investigating 31,353 sales opportunities across 57 countries, the authors show that the coronavirus pandemic significantly decreases industrial customers' purchase probability, especially for high-priced offerings. In countries with low uncertainty avoidance and strong long-term orientation (e.g., China, India, Singapore), purchase probability is less affected by the pandemic. The coronavirus pandemic even increases purchase probability for offerings with low prices in countries where cultures are simultaneously uncertainty-avoidant and short-term oriented (e.g., Argentina, Brazil, Mexico). This is presumably because customers safeguard their operations in the face of impending supply shortages. Consequently, this helps suppliers focus on the right sales opportunities to secure their business during exogenous global shocks such as the coronavirus pandemic.