Abstract
Firms struggle with salesforce control, particularly as typical piecemeal approaches overlook the nuance that the effect of a control is amplified or muted by a context created by other simultaneously deployed controls. Recent studies showing interactions between formal controls caution that control mechanisms must be examined as a portfolio. This study takes the next step in addressing how widely-studied formal controls interact with understudied input control and informal control in a salesforce control portfolio. We introduce the idea of sequential complementarity—when deploying a control mechanism enhances marginal returns from increasing a temporally preceding one—within a control portfolio to explain those interactions. We use data from 120 apparel manufacturers and 94 retailers to show that the performance benefits of formal control mechanisms depend on precedence by input control. These effects flip in the presence of informal control. Our unique contribution is theoretically introducing temporality into “holochronic” control theory to explain interactions of formal with informal control mechanisms.
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Notes
Supplementary fit relies on one element augmenting the other by pushing in the same direction, while compensatory fit relies on one element pushing in a different direction to make up for the weakness of the other.
For robustness, we assessed whether the results hold up when a different variable is used as a WLS regression weight. We retested the model using process control as the regression weight. The results of weighted least square (WLS) are highly comparable to the results reported on Table 4: two-way interaction between input control and process control is positive (b = .17, p < .05), whereas two-way interaction between input control and outcome control is negative (b = −13, p < .01). Conversely, three-way interaction between input control, outcome control, and informal control is positive (b = .12, p < .05), whereas three-way interaction between input control, process control, and informal control is negative (b = −.24, p < .05).
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The authors thank Soongi Kwon for her data collection assistance.
Appendices
Appendix A
Measurement items
I. Measurement items used for the focal constructs |
Salesforce performancea (1: doing a poor job −7: doing a great job) |
Please evaluate the performance of your salesforce on the following aspects: |
1. Meeting the monthly/quarterly sales goal |
2. Meeting the sales growth goal |
3. Meeting customer loyalty goal |
4. Developing and managing customer relationships |
5. Managing details of sales floor |
6. Communicating with corporate staff |
7. Cooperation between salespeople |
8. Merchandise coordination |
9. Managing inventory |
10. Coordination with department store |
11. Dealing with customer complaints |
Input controla (1: very little emphasis – 7: a great deal of emphasis) |
Please indicate how much emphasis you give to the following areas when you recruit a new salesperson. |
1. Salesperson’s performance in other apparel brands |
2. Salesperson’s reputation among other apparel companies |
3. Salesperson’s reputation among other department stores |
4. Salesperson’s previous experience in apparel industry |
5. Salesperson’s expertise on fashion |
6. Salesperson’s service and customer-relating capability |
7. Salesperson’s sales and marketing capability |
8. Salesperson’s fit with the focal brand |
Process control (1: very little emphasis – 7: a great deal of emphasis) (construct reliability = .87) |
Please indicate how much emphasis you give to the following areas of salesforce performance. |
1. Managing the sales floor |
2. Coordinating cooperation between salespeople |
3. Customer education and support activities |
4. Selling techniques and procedures used by salesforce |
Outcome control (1: very little emphasis – 7: a great deal of emphasis) (construct reliability = .82) |
Please indicate how much emphasis you give to the following areas of salesforce performance. |
1. Monthly/quarterly sales goal attainment |
2. Sales growth rate |
3. Inventory management |
Informal control (1: completely inaccurate description – 7: completely accurate description) (construct reliability = .83) |
How would you describe the extent of information sharing between the headquarter and the salesforce? |
1. It is expected that we keep each other informed about events or changes that may affect the other party. |
2. Exchange of information takes place frequently and informally, and not only according to a pre specified ways. |
3. It is expected that any information that might affect the other party will be provided to them. |
II. Measurement items used for control variables and instruments |
Decision controla (1: entirely decided by salesforce – 7: entirely decided by headquarter) |
1. New product planning |
2. Reorder production decision |
3. Seasonal product decision |
4. Customer reward decision |
5. Additional order decision |
6. Sales process decision |
7. After service and customer relationship management |
Manufacturer brand reputationb: (1: strongly disagree – 7: strongly agree) (construct reliability = .85) |
When considering the focal manufacturer’s brand being sold on your floor, |
1. Customers feel proud of wearing this brand apparel. |
2. This apparel brand commands high loyalty from shoppers. |
3. This apparel brand enjoys high sales value among shoppers. |
Manufacturer flexibilityb: (1: strongly disagree – 7: strongly agree) (construct reliability = .92) |
When considering the focal manufacturer that sells its brand on your floor, |
1. In this relationship, the apparel manufacturer is open to the idea of making changes, even after we have made an agreement. |
2. In this relationship, the apparel manufacturer makes it possible for us to make adjustments to cope with changing circumstances.* |
3. This apparel manufacturer is open to modifying our agreement if unexpected events occur. |
4. When an unexpected situation arises, this apparel manufacturer would rather sit down with us and work out a new deal than hold us to the original terms. |
5. When unexpected situations arise and we disagree on how to proceed, this apparel manufacturer is open to working out a new deal that is acceptable to both of us. |
Salesforce power: (1: strongly disagree – 7: strongly agree) (construct reliability = .71) |
1. Our salespeople keep very close relationships with customers. |
2. Our salespeople have collected and kept important customer information with themselves. |
3. Our sales performance is definitely influenced by the capabilities of salespeople. |
Manufacturer power: (1: strongly disagree – 7: strongly agree) (construct reliability = .94) |
1. Our brand is one of the leading brands in fashion industry. |
2. Our brand has differential advantage over other fashion brands. |
3. A department store would suffer great sales loss if they do not carry our brand. |
4. Our products enjoy high brand recognition among shoppers. |
5. The customer patronage for our brand is stronger than most other brands in fashion apparel industry. |
Performance ambiguity: (1: strongly disagree: − 7: strongly agree) (construct reliability = .86) |
1. Headquarters cannot find out the performance of our salesforce easily. |
2. Headquarters has no idea whether our salesforce is working hard for shoppers. |
3. We cannot easily find out how well our salesforce responds to customer needs.* |
4. It is hard to evaluate the performance of our salesforce easily and thoroughly. |
Centralization: (1: strongly disagree – 7: strongly agree) (construct reliability = .83) |
1. Headquarters coordinates and controls the operations of salesforce closely. |
2. Headquarters controls the day-to-day sales operations by the plans developed by the headquarters. |
3. Headquarters has sole authority in determining the sales policy in department stores. |
4. Headquarters has strong influence on the operations of salesforce. |
a Formative scale.; b: information was obtained from retailer respondents; *: Item dropped from further analysis. |
Appendix B
Construct Measurement and Validity Assessment
Confirmatory Factor Analysis of the Construct Measures | |||
Construct Measure | Standardized | Construct | Average Variance |
Loadings | Reliability | Extracted | |
Process Control | |||
Item 1 | .56 | ||
Item 2 | .84 | .87 | .63 |
Item 3 | .81 | ||
Item 4 | .91 | ||
Outcome Control | |||
Item 1 | .90 | ||
Item 2 | .87 | .82 | .62 |
Item 3 | .51 | ||
Norm-based Control | |||
Item 1 | .77 | ||
Item 2 | .87 | .83 | .63 |
Item 3 | .73 | ||
Brand Reputation | |||
Item 1 | .88 | ||
Item 2 | .73 | .85 | .65 |
Item 3 | .81 | ||
Manufacturer Flexibility | |||
Item 1 | .82 | ||
Item 2 | .85 | .92 | .75 |
Item 3 | .89 | ||
Item 4 | .89 | ||
Centralization | |||
Item 1 | .75 | ||
Item 2 | .84 | ||
Item 3 | .77 | .83 | .56 |
Item 4 | .62 | ||
Performance Ambiguity | |||
Item 1 | .81 | ||
Item 2 | .83 | .86 | .68 |
Item 3 | .83 | ||
Manufacturer Power | |||
Item 1 | .90 | ||
Item 2 | .86 | ||
Item 3 | .88 | .94 | .75 |
Item 4 | .85 | ||
Item 5 | .81 | ||
Salesforce Power | |||
Item 1 | .64 | ||
Item 2 | .71 | .71 | .45 |
Item 3 | .66 | ||
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Kim, S.K., Tiwana, A. Chicken or egg? Sequential complementarity among salesforce control mechanisms. J. of the Acad. Mark. Sci. 44, 316–333 (2016). https://doi.org/10.1007/s11747-014-0409-2
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DOI: https://doi.org/10.1007/s11747-014-0409-2