September 11, 2006

Differences in Sales Management Practices “Flattening” Around the World

Two TCU marketing professors for the Neeley School of Business conducted the first study to compare sales management practices in developed and undeveloped countries on several continents. The finding: Differences in processes across countries are diminishing, even disappearing.

The implication, according to the study, is that global account management rather than country-based or region-based account management is becoming crucial to the success of many companies.

In his 2005 book, The World Is Flat, foreign-affairs commentator Thomas Friedman speculated that that globalization is "flattening" away the dissimilarities between countries and regions.

"Our key findings support Friedman's thesis regarding sales management processes and effects for international companies in business-to-business sales," says Dr. David W. Cravens, holder of an endowed chair at the Neeley School of Business at Texas Christian University in Fort Worth.

"We found some variation between individual countries-possibly due to differences in culture, political stability and economic wealth-but were surprised to find no major differences between developed and undeveloped countries."

"Globalization of the Sales Organization: Management Control and Its Consequences," by Dr. Cravens and fellow TCU professor George S. Low, along with Nigel F. Piercy of the University of Warwick in the United Kingdom, appears in the current issue of Organizational Dynamics, an academic journal. The research was presented in August at the Marketing Educators Conference of the American Marketing Association in Chicago.

"More than anything else, our research indicates that managers and executives need to recognize this trend, evaluate their sales strategies and make any necessary adjustments to better operate on a global basis," says Dr. Cravens. "This doesn't eliminate the need to recognize certain country differences," he says, "but there are definite sales management advantages in not treating each country as a unique situation."

The study combined and analyzed the results of previous studies, examining information provided by more than 1,000 field sales managers who supervised business-to-business salespeople. This included companies and industries in Austria, Bahrain, Greece, India, Israel, Malaysia, Nigeria, Saudi Arabia and the United Kingdom.

Other than their own earlier research, prior major studies of sales management practices focused on the developed countries of the U.S., Europe and Australia. "We studied an interesting, diverse group, and even in these nations that are very different from each other, we found a number of similarities."

The strongest and most consistent similarity across countries was in the relationship between sales managers' behavior control techniques with their salespeople and the positive results of salesperson success and performance, and sales unit design and effectiveness.

"We looked at how managers manage their salespeople, specifically related to monitoring, directing, evaluating and rewarding," Dr. Cravens explains. "The study did not address managers' particular tactics but rather their quantitative levels of behavior control activities."

They also noticed a similarity in the intriguing lack of impact that incentive pay had on salesperson performance, although the reasons are unclear.

Other sales management processes had strong similarities in some countries and dissimilarities in others, but the differences did not correspond to whether or not the countries were considered developed or undeveloped. The overall tendencies seemed clearly headed toward increased similarity.

Sales managers can use the study's findings to benefit their companies through seeking to understand the changes in global markets, taking advantage of emerging opportunities, effectively disseminating information throughout their organizations, and forming strong outsource networks.  


Elaine Cole
Public Relations Manager
Neeley School of Business at TCU