Ideas for Leaders #101

Global Sales Teams and the Impact of National Culture

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Key Concept

As international sales forces become more prevalent companies need to standardize their sales force management controls across national borders. This research looks at how the effectiveness of sales force control models is influenced by national culture, and how sales team managers need to understand and balance cultural influences that promote behaviour controls over outcome controls.

Idea Summary

Salespeople are a force to be reckoned within organizations. Situated at the interface between companies and customers, they play 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. “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 honours 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.” This Idea considers how managers can optimize sales force control models by establishing processes which align, guide, evaluate, and reward international effective sales forces.

INTERNATIONAL SALES FORCES
Looking at the management of salespeople in companies with sales forces responsible for clients spread across the globe the research showed that there are significant differences from one country to another. This means that attempts to standardize processes will be very difficult.

THE IMPORTANCE OF NATIONAL CULTURE
The authors discovered there are essentially two philosophies around how sales force control systems affect salespeoples’ behaviour and satisfaction: ‘outcome control’ and ‘activity/behaviour control’. Rouziès explains: “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.” National culture has a strong influence of which philosophy salespeople follow. The research suggests that the more companies use behaviour controls with their salespeople, the less attention they pay to customers and the more emphasis they place on their supervisors and on administrative tasks; and when salespeople devote more effort to their relationship with their supervisor than to their customers company objectives are not met. On the other hand, outcome-based control salespeople focus more on their customers and less on their supervisors or on administrative tasks, which is clearly more effective.

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 are more concerned with their supervisors than their customers). It even seems to increase the satisfaction of salespeople in the case of behaviour-based control. This phenomenon is not negligible.

FINDING THE RIGHT BALANCE
Whether they adopt behaviour or outcome controls, sales managers in international companies face a dilemma. If they rely on behaviour 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.”

Methodology: Onyemah, Rouziès and Panagopoulos first examined the behavioural strategies and the satisfaction of salespeople based on different control systems. Then, using primary data obtained from 1,049 salespeople in six countries (France, Ireland, Italy, Spain, United Kingdom, and the USA) 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 salespeople in an international context.

Business Application

To be able to align salespeoples' behaviour with business goals in an international environment companies should take account of the influential role of culture. This research shows how cultural influence can cause companies to create counterproductive conditions where their sales teams focus more on their supervisor than their customers. Managers should look for and counterbalance influences that promote behaviour controls over outcome controls.

This is important not only in that it will improve sales and customer satisfaction, but also because it can help create more satisfied salespeople. A recent study showed that the turnover of salespeople is around 12 to 15%. This is a problem in terms of recruitment, training as well as opportunity cost. 

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Authors

Institutions

Source

Idea conceived

  • 2012

Idea posted

  • February 2013

DOI number

10.13007/101

Subject

References

This Idea is an abridged version of the article Managing International Sales Teams: Impact of Cultural Performance Orientation, Research@HEC Annual 2011-2012, © HEC Paris, authored by Business Design and approved by Dominique Rouziès.

This Idea is 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, no. 11, pp. 19511975 co-written with Vincent Onyemah and Nikolaos G. Panagopoulos.

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