Organization of Sales Force & Sales Leadership
Chapter 11 &15
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Three basic tasks must be accomplished by all organizations
2.
Maintenance of Order in achieving sales forces goals & objectives The assignment responsibilities of specific task &
4.
6.
Integration & Coordination with other elements of the firm
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Developing a Sales Organization
1. 2. 3. 4. 5.
Formal and informal organization Horizontal and vertical organization Centralized and decentralized organization The line and staff components of the organization The size of any company
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1. Formal vs. Informal Organization
Formal Organization is a management created
relationship between department and individuals.
Informal Organization is a communication pattern
form from the social relationships existing within the formal Organization.
(Grapevine: It’s a Communication pattern of the informal Organization. It only exists in an informal Organization).
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2. Horizontal vs. Vertical Organization
Horizontal Organization is one in which the number of
management level is small & the number of managers in each level is large. (figure 11-4, pg 240)
Vertical Organization is one that has several levels of
management, all reporting upward to a higher level (figure 11-3, pg 240).
The factor that determines whether a vertical or horizontal organization structure should be employed is the effective span of control; number of employees reporting to the next higher level.
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3. Centralized vs. Decentralized Organization
Centralized organization is one in which responsibility
& the authority is concentrated at the higher level of management.
Decentralized organization is one in which the
responsibility & the authority are delegated to the lower level of management.
There is usually a higher degree of decentralization as an organization grows in size. Increased size results in top executives being less able to deal with the range of decisions that they handled when the firm was small. By necessity responsibility for making these decisions in then shifted downwards.
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4. The Line vs. Staff components
Line function is the primary organization activity. Staff function is the supporting organizational activity.
In marketing organization, the selling function is the line component, whereas advertising, marketing research, marketing planning, sales training and distributor relations are considered staff roles.
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5. The size of the Company
Size of the company is a major factor influencing the
organization structure.
For a small company there is likely to be no formal
organization structure.
If the firm grows beyond the small scale entrepreneurial
stage, the top management must devote more attention to overall policy and planning and less time to daily operations.
Middle level management should be developed to take
over the specialized functions of the growing business. 8
Basic Types of Organizational Structures
The Function Organization is the organization based on
the primary activities of the company. It includes various departments for e.g. marketing, sales, finance, production etc.
Geographical organization is the one in which selling
personnel are given the responsibility for direct selling activities in a geographical area. The sales rep is responsible for selling the firm’s full line of products.
Customer Specialization is the sales organization in
which selling personnel are organized by particular customer or industries.
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Product specialization is one in which selling personnel
concentrate their efforts on particular brand lines or individual items.
Combination organization Geographic, customer, and
product specialization are the basic approaches to sales organization. The structure of most sales forces combine two or more of them. These new combination organizations is the ‘Matrix Organization’.
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Leadership and Motivation
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What is the Difference Between Leadership and Supervision?
Leadership:
The use of influence with other people through communications processes to attain specific goals and objectives
Supervision:
The day-to-day control of the salesforce under routine operating conditions
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Sales Force Socialization
Task-Specific Self-Esteem:
The extent to which an individual believes s/he can perform a task competently The extent to which an individual feels a bond to the organization The extent to which work activity is directed by rules, regulations, and commitment An individual's psychological separation from the activities of the job
Organizational Commitment: Formalization:
Work Alienation:
Job Involvement:
An individual's psychological attachment to the job itself
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Power and Leadership
Five types of power which may be present in interpersonal relationships:
Expert Power Referent Power Legitimate Power Reward Power Coercive Power
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Leadership Approach
Trait Approach Behavior Approach Contingency Approach
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Sales Manager’s Leadership Roles
Inspirational leader: the sales manager is the emotional
catalyst for subordinates.
Innovator: a leader is the source of problem-solving ideas for
followers – how to win the big account, how to cover the territory more effectively, how to reduce expenses.
Superior performer: ideally the supervisor is a proven
salesperson and knows a great deal about selling, salespeople respect the supervisor order and advice. represents the company; he is the source of information about firm’s policies, procedures etc.
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Guardian of the status quo: sales manager speaks for and
Individual Leadership Skills
Perception: a sales manager must be skilled at perceiving the
meanings and causes of individual and group behavior.
Conceptual ability: it is the process by which one relates to and
understands everything that happens.
Self-awareness: it is a person’s ability to recognize that a leader
is an integral part of the management process.
Human relations skills: art of creating and maintaining
organizational cooperation for maximum efficiency, low cost and high personal job satisfaction.
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Coaching
The continuous development of salespeople through supervisory feedback and role modeling.
Take a we approach Address only one or two problems at a time Don’t focus on criticizing poor performance, reinforce good
performance Foster involvement Recognize differences in salespeople and coach accordingly Coordinate coaching with more formal sales training Encourage continual growth and improvement Insist salespeople evaluate themselves Obtain agreement with respect to punishments and rewards Keep good records
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Motivation
The core of sales management – is simply the “how-to”
aspect of getting salespeople to do their jobs well.
To determine the proper incentives to use, sales
managers must understand the needs of their sales people. This is not easy because each salesperson is different and has different needs.
Research also suggests that salespeople’s psychological
and sociological needs differ according to career stage.
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Types of Needs
Primary needs: physical needs that must be satisfied
immediately.
Secondary needs: psychological needs that are satisfied
at a later stage.
Rational needs: are those based on reasons. Emotional needs: these are based on emotions or may
result from desires for status and prestige.
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Maslow’s Hierarchy of Needs
The theory states that needs on the lowest level must be identified and satisfied before higher-level needs become important motivating forces:
1. 2.
3. 4.
5.
Physiological needs – basic requirements Safety needs – protection from various kinds of threats, dangers and uncertainties Social needs – significant relationship with other people Ego needs – feelings of self-esteem, self respect, self confident and achievement. Self-actualization – desire for self-fulfillment and a wish to succeed simply for the sake of accomplishment, not for material gain/recognition
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Expectancy Theory of Motivation
Theory that people decide how much effort to put into
their work based upon what they expect to get out of it.
Salespeople will be motivated to do well if they belief that
their efforts will result in appropriate rewards.
High motivation occurs when a salesperson values the
specific outcome (reward) that results from successful performance.
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Path Goal Theory
Concept that a salesperson’s motivation stems from the
supervisor setting the tasks, and expected performance levels, then providing the support required for their accomplishment.
It is extremely important that a salesperson understand
his/her role in the firm (Role Clarity).
Path-goal theory is a leadership model that says the
supervisor’s establishment of tasks and expected performance levels and the provision of needed coaching guiding, support, and rewards will motivate subordinates towards higher levels of performance and greater job 23 satisfaction.
Theory X and Y
Theory X : People are generally lazy to work and
need to be pressurized
Theory Y : People like to work and are motivated
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