University of Toledo

Salesforce Performance

How managers direct the activities of the salesforce to drive performance is a quintessential issue in sales management. The sales literature focuses on sales control as one means to accomplish this. To complement sales control, a manager may use trust as a means to govern the efforts of his salesforce. Unlike sales control, trust is absent of managerial measuring and monitoring but requires a history of previous transactions (between manager and salesperson). Furthermore, sales managers make governance decisions in the face of much uncertainty that stems from the salesperson, the transaction history (between manager and salesperson), and the environment (i.e., organizational and marketplace). To date, little academic research has addressed the question as to which of these uncertainty factors managers consider when choosing sales control, trust, and both in combination (i.e., hybrid form) to govern their salesforce. Therefore, the objective of this research is to propose and empirically test an integrated framework combining control and trust in sales governance.

The theoretical framework of transaction cost analysis (TCA) serves as the main paradigm for suggesting that uncertainty is the basis for managerial sales governance decision-making. Based on TCA, and trust theory, 18 testable hypotheses are proposed suggesting a relationship between uncertainty (antecedent) variables and a manager's use of a hybrid form of sales governance (combining trust with sales control). A sample of 64 sales managers were surveyed relative to their use of sales control practices, trust perceptions in each of 3 of their salespeople, and uncertainty factors that impact their governing decisions (providing a total of 192 observations).

Overall, these results suggest that managers consider uncertainty stemming from: the salesperson (i.e., intrinsic motivation and goal congruence), the transaction history (i.e., sales manager's knowledge of the salesperson), and the external environment (i.e., sales demand uncertainty and ratio of accounts per salesperson) when using sales control and trust together to govern their salesforce.