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Customer knowledge creation capability and performance in sales teams

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Abstract

Drawing on substitutes for leadership theory, this study examines the relationship between a sales team manager’s empowering leadership and his or her sales team’s customer knowledge creation capability. The authors develop and test a model that positions task interdependence, outcome interdependence, and their interactions as substitutes for empowering leadership. Further, the authors explore two perspectives of team-level performance—customer relationship performance and financial performance—as consequences of a sales team’s customer knowledge creation capability. Using matched data collected from sales team managers and sales team members, the authors find general support for their hypotheses. The study finds that a sales manager’s empowering leadership has a positive effect on a sales team’s customer knowledge creation capability. However, the results also suggest that the positive effect of empowering leadership on a sales team’s customer knowledge creation capability is mitigated when either outcome interdependence or both task and outcome interdependence are high. Further, as outcome interdependence and the interaction between task and outcome interdependence increases, a sales team’s customer knowledge creation capability also increases, which suggests that outcome interdependence and the combination of task and outcome interdependence replaces the role of empowering leadership. The study also finds that the greater a sales team’s customer knowledge creation capability is, the higher its customer relationship performance and sales team financial performance will be. Implications for customer knowledge creation in sales teams in the presence and absence of empowering leadership are discussed.

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Notes

  1. Turkey was the fastest growing economy in Europe and one of the fastest growing economies in the world in 2010 (8.9% real GDP growth) (e.g., OECD Statistics http://www.oecd.org/document).

  2. According to the 2009 statistics, the manufacturing sector constitutes 25.9% of the gross domestic production (GDP) following services (64.7%). The manufacturing sector’s contribution to GDP in select countries in Europe and the world are as follows: Germany (27.9%), South Korea (39.4%), Sweden (26.6%), US (21.9%), France (19%), UK (22.1%), Italy (24.9%) (e.g., OECD Statistics http://www.oecd.org/document).

  3. We provided the following definitions to managers, which we extracted from Deeter-Schmelz and Ramsey (1995): The core selling team is defined as “a small, permanent team responsible for customer relationships, sales strategy, and sales transactions and comprised of selling organization members who possess complementary skills, who are committed to a common purpose, performance goals, and a selling approach for which they hold themselves mutually accountable” (p. 49). A team leader is the person who is responsible for all team actions by working directly with all other members of the core selling team. A team leader may also work directly with the buying organization and/or buying team leader to satisfy their needs and obtains information and/or approval from company management on team decisions as well as information that permits the alignment of team and organizational goals (p. 51). With a team leader who is in charge of the team, the members of a core selling may be salespeople, the internal coordinator, and customer service representatives (p. 51). Extended selling team is defined as “those selling organization members accessed by the core selling team, on a temporary basis, to meet customer needs during a specific transaction” (p. 49).

  4. Although we asked managers to randomly choose only one core sales team, some managers might have selected the high performing sales team and not the average or worst performing team. As two reviewers commented, this could raise the concern of selection bias, and eventually the representativeness and generalizability of our results could be in doubt. Accordingly, we checked if managers indeed randomly chose one core selling team and for the absence of systematic selection bias. Since distributors set up team structures depending on the size of the regional accounts and business potential, all distributors except the ones in 5 major cities had only one permanent core selling team. The total number of sales teams across the 80 distributors was 99. By choosing only one core selling team from each distributor, we ended up eliminating 19 teams. We contacted the distributors with more than one core selling team. We asked the 19 team leaders to respond to the scales of team financial performance and customer relationship performance. The t-test results indicated that there was no statistically significant difference between the two groups of teams (i.e., the teams that participated in this study and the ones that were not chosen by the managers) in terms of team performance: team financial performance: t = 1.438, p > .10; customer relationship performance: t (97) = .716, p > .10; team size: t (97) = .640, p > .10; average team tenure: t (97) = 1.19, p > .10. Accordingly, these findings suggest that selection bias was not an issue and the representativeness and generalizability of our results were not jeopardized.

  5. Team members all have salesperson in their titles.

  6. In line with previous studies (e.g., Ambrose and Schminke 2003; Hofmann, Morgeson, and Gerras 2003), we tested the models in Table 3 by using ordinary least squares (OLS) to show whether the nested and non-nested structure produce different results. We found that the OLS analysis of the random coefficient models in Table 3 resulted in identical results. In addition, OLS replicated all significant and nonsignificant effects. For example, the full model of customer knowledge creation capability (Model 3) explained 48.8% of the variance in customer knowledge creation capability. The change in R 2 (.02) from Model 1 to Model 2 was significant, F(7, 251) = 24.27, p < .001. Similarly, the change in R 2 (.02) from Model 2 to Model 3 was also significant with F(11, 247) = 23.34, p < .001.

  7. We thank an anonymous reviewer for making this suggestion.

  8. We thank an anonymous reviewer for making this suggestion.

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Acknowledgement

We gratefully acknowledge Christopher Collins (Cornell University) for providing us with the scale of knowledge creation capability. We also thank Jeffrey P. Boichuk (University of Houston) for his helpful feedback on a previous version of this manuscript.

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  1. Faculty of Business, Department of Marketing, Int’l Business, and Strategy, Brock University, St. Catharines, ON, Canada, L2S3A1

    Bulent Menguc

  2. Thunderbird School of Global Management, 1 Global Place, Glendale, AZ, 85306, USA

    Seigyoung Auh

  3. Faculty of Economic and Administrative Sciences, Department of Marketing, Marmara University, Istanbul, Turkey

    Aypar Uslu

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Menguc, B., Auh, S. & Uslu, A. Customer knowledge creation capability and performance in sales teams. J. of the Acad. Mark. Sci. 41, 19–39 (2013). https://doi.org/10.1007/s11747-012-0303-8

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