there are 6 assignments i need all by saturday i am willing to pay 45 total the papers are not too long

THE ROLE OF ENVIRONMENTAL TURBULENCE, READINESS FOR CHANGE, AND SALESPERSON LEARNING IN THE SUCCESS OF SALES FORCE CHANGE

Lawrence B. Chonko, Eli Jones, James A. Roberts, and AlanJ. Dubinsky

Today's sales forces are utider pressure to change or risk becoming extdnct. Changes in the business marketplace have accelerated the need for salespeople to learn continuously. Tbe purpose ot' this paper is to examine readiness for change in a sales force context. C!)hange is presumed to be initiated in response KD some galvanizing event in the business environment. Business turbulence requires recognition of the need for change by members of the sales organization. We discuss the sales force's perceptions of a sales organization's readiness for change and propose that these perceptions impact ihe organisation's change success. Furthermore, an organization's culture, chmate, and policies are proposed as key drivers ol an organization's readiness for change. Sales force perceptions of organizational readiness for change are then posited i.o be related to several measures of change success. The paper concludes with a call for more research on salesperson's learning orientation and sales organizational readiness for change as keys to sales performance.

"Evolutionary and rt'vt)lutionary forces are relentlessly bead- ing our way that wili irrevocably change the way that sales- people and sales managers understand, prepare for, and ac- eomplish their )obs" (Andcrsoti 1996, p. 17). Anderson at- tributes this dynamism to behavioral (e.g., rising customer expectations), tt-chnologieal (e.g., sales force automation), and managerial (e.g., the outsourcing of sales functions) forces, lie further asserts that those sales managers and salespeople who continue to learn and adapt will succeed in these tumul- tuous titnes.

The contemporary business environment in whieh sales managers and their salespeople operate is ever dynamic. This dy-namism can engeader either opportunities or problems. Contemporary sales forces are under pressure to change or risk becorning cxdnct. Por instance, the emergenee of the digital eeonomy, which employs the Internet, e-eommerce, and disintermediadon (1 apscott 1996), has esealated the need for salespeople to learn condnuously. For example, in the 199()s, IBM had missed major market and competitive moves.

Lawrence B. Chonko (Ph.D., University of Houston), Holloway Professor of Marketing, tiankamer School of Business, Bayior Uni- versity, Larry_Ch [email protected].

Eli Jones (Ph.D.. Tex:̂ .s A&M University), Associate Professor of LMarketing and Director of rhe Program for Excellence in Selling, C.T. Bauer C(j!!ege oi Business, University of Houston, eli- [email protected].

James A. Roberts (Ph.D.. University of Nebraska), W A. Mays Pro- fessor of F.ntrepreneurship, Hankamer School of Business, Baylor University, Jim_Robcri [email protected].

Alan J. Dubinsky (Ph.D., IJniversity of Maryland), Professor, School of Consumer and Family Sciences and Krannerr School of" Management, Purdue 1 ^niversiry, [email protected].

Undeterred, its CiiO chose to restructure the sales force in an attempt to enhance its customer orientation. The end re- sult was an amazing reemergence of IBM's financial success (Brewer 1998). Alternatively, Xerox faced a similar situation in its markets and thereby chose to reorganize its sales force. The result was a much ditninished morale among its sales troops, a significant decline in Xerox sales and profits., and, ultimately, the replacement of its CEO. Two world class or- ganization s ^ t w o strategies for sales force change—two dif- ferent results.

The experiences of Xerox and IBM suggest it is impor- tant for sales forces to be able to adapt to a changing busi- ness environment. However, surprisingly litde research at- tention has been directed toward sales forces and change be- haviors. We seek to address this void in the literature by pro- viding an examination of factors that are likely to have an impact on the success of sales foree change initiadves. More specifically, we propose in this paper (based on subsequently cited extant research) that there are two requisite elements for change success: sales force perceptions of an organiza- tion's readiness for change and the learning orientation of the sales force. Incorporadng these concepts, this paper pre- sents Figure 1 as a guiding framework for sales organizations in their efforts to manage change. Undergirding this presen- tation is the quesdon, "What leads one sales organizadon to successfully cope with change while another does not?" We propose that a pardal answer may lie within the sales force itself.

Salespeople are entrepreneurs (Jones, Roberts, and Chonko 2000). They operate on the boundary of sales organizations (Singh 1993). They are distant from the organization and of- ten act autonomously. They are empowered to make deci- sions and they conduct their business with limited supervi- sion. As boundary spanners, salespeople are expected to build

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© 2003 Pi Sigma Hpsilon, Inc. .̂ ]l nj>hts reservcJ. ISSN ()M85-31H/ 2003 3y.S0 +0,00.

228 journal of Personal Selling & Saks Management

Figure 1 A Framework for Examining Sales Force Perceptions of an Organization's Readiness for Change and the

Success of Sales Force Change Initiatives

Environmental Turbulence

Organization Culture

' Market Orientation • Entrepreneurship

2,3

Organization Climate

• Facilitative Leadership ' Organic Structure ' Decentralized Strategic

Planning • Informal Leadership

Support ' Role Conflict

6-10

Organization Policies

' Training ' Rewards

CHANGE SUCCESS

Perceptions of Organizational Readiness

for Change

19-21

18

4,5,11, 14,15 Individual

Learning Orientation

12,13

Note: Numbers correspotid to propositions presented in the text.

16

Individual Performance

• Behavior-Based • Outcomes-Based

Intermediate Outcomes

Sales Outcomes

17,22

customer relationships and create value (Weitz and Bradford 1999). Anderson (1996) asserts that exogenous factors such as competitive intensity in the marketplace along with behav- ioral, managerial, and technological change impact salesper- son behavior. In their boundary-spanning roles, salespeople are different than internal employees (Belasco 1966). There- fore, it seems plausible to propose researchable propositions concerning salespeople, learning, and change.

ORGANIZATIONAL READINESS FOR C H A N G E

Employees are at the crux of organizational change initia- tives (Tetenbaum 1998). According to Armenakis, Harris, and Mossholder (1993), the support, energy; and inspiration re- quired to create organizational readiness for change among individuals come from individuals within the organization. Readiness for change has been defined as "the cognitive pre- cursor to the behaviors of either resistance to or support for change efforts" (Armenakis, Harris, and Mossholder 1993, pp. 681-682). An individual's perception of an organization's readiness for change is viewed as a similar concept to un-

freezing, described as a process In which an indmduai's beliefs and attitudes about pending change are affected such that the imminent change is seen as useful (Lewin 1951). In a sales context, perceptions of organizational readiness for change embodies individual sales representatives' beliefs, at- titudes, and intentions regarding the extent to which change is needed and perceptions of the organization's ability to deal with change under dynamic business conditions (e.g., Armenakis, Harris, and Mossholder 1993). Sales force assump- tions and expectations about change comprise their disposi- tions concerning their organization's readiness for change (Wheatley 1992). When environmental change is pervasive, or difficiolt to predict, sales organizations must be capable of rapid change to survive (D'Aveni 1994). As environmental complexity has increased in the last decade, adaptation and change have become salient research issues (Gordon et al. 2000).

Spreitzer (1995), Thomas and Velthouse (1990), and Eby et al. (2000) propose that readiness for change reflects an individual's unique interpretation. Over time, organizational experiences shape how an individual views the organization's

Fall 2002 229

readiness for change (].,aw and Woodman 1995). in a sales organization context, therefore, tiie saies force members iiavc preconceived ideas about its organization's readiness for change, and these perceptions vary with experience. Accord- ing to Armenakis, Harris, and Mossholder (1993), many fac- tors contribute to tlie effectiveness of change strategics. As shown in Figure 1, perceptions of a sales organization's readi- ness for change are affected by perceptions of the business environmental turbulence and several organizational factors.

Environmental Turbulence

O n September 11, 2001, the United States was dealt a terrible blow by terrorists. It became irmnediately and abundantly clear that the environment had changed. The United States and its allies around the globe became keenly aware of the turbu- lence arounti the world and braced themselves for imminent changes in government policies and procedures. A frequently asked question was' Are we ready for change?" Likewise, when sales organizations encounter a turbulent business environ- ment., salespeople begin asking if their organizations are ready for change.

In recent years, marketing strategy researchers have inves- tigated environmenral turbulence characteristics pertinent to organic:ational change and business performance (e.g., Glazer and Wtiss 1993; Han, Kim, and Srivastava 1998; Jaworski and Kohli 1993). These characteristics include (1) market turbu- lence—the rate of change in the composition ot customers and their preferences, (2) technological turbulence—the rate of technological ch.inge in tiie enwunment, and (3) competi- tive intensit}' in the marketplace. Several studies have exam- ined and found corcoborating support for the impact of the business environmt nt on a firm's strategy, distinctive compe- tency, and structure (e.g., 1 litt and Ireland 1985). Planning has been demonstrated to affect profitabilit\" more strongly in tur- bulent cnwonments (Miller and Cardinal 1994). Pelham (1999) reported a weak relationship between the competitive envi- ronment and firm performance; he conjectured that small firms may be especially adaptable to changing business conditions.

A mode! proposed by Armenakis, Harris, and Mossholder (1993) emphasizes the importance of building readiness for change within rhe sttuadonal context facing the organization. Beer and Walton (1987) and Pettigrew (1990) previously had illustrated the importance of contextual factors in bringing about change. Decisions concerning readiness programs should be grounded by the urgency of the change and the extent to which the sales force perceives the sales organiza- tion as ready tor the needed change (Armenakis, Harris, and Mosshoider 1993). In general, top management in sales or- ganizations confronting high environmental turbulence must rely on planning to cope with changing, unpredictable condi- tions. ()n the f)ther hand, top management in sales organiza-

tions facing low turbulence conditions require less planning (Ansoff 1991; Miller and Friesen 1983).

In a highly turbulent environment, the sales force's per- ceptions of an organization's readiness for change are likely to be especially pronounced as the need for changes in sales force strategies and tactics are dictated by changes in the frrm's selling environment. Rapidly changing market and techno- logical conditions serve as a signal that the organization must consider change. Specifically, vigilant monitoring and response to market forces and heightened proactivness, risk-taking behavior, and innovativeness will be needed in the sales orga- nization. A sales organization must be postured to adapt suc- cessfully to changes in the marketplace. Being ready for change will allow sales organizations to quickly sadsfy rapidly chang- ing product-market requirements and avoid competence- destroying disruptions (D'Aveni 1999) such as changes in cus- tomer tastes and needs. Strategic paradigms that lead to suc- cess in one set of environmental circumstances may not work in another. Indeed, business models successful in stable busi- ness environments are liabilities in unstable environments (D'Aveni 1999). In other words, there must be a fit between environmental turbulence and a company's choice of strat- egy. Based on the above, we offer the following proposition:

P/.- Saks organisations that develop an understanding of th

turbulence of the business environment are likely to be perceived

by the sales force as more read)

Organizational Characteristics and Readiness for Change

Eby et al. (2000) found evidence that characteristics of the organization must support and reinforce change in order for change to be successful. Their data support the discussion of Tetenbaum (1998) concerning the importance of organi- zations creating conditions that are conducive to change. Armenakis, Harris, and Mossholder (1993) assert that the de- gree to which organizational policies and practices are sup- portive of change is important in understanding how indi- viduals perceive the organization's readiness for change. From an experiment conducted by Coch and French (1948), Armenakis, Harris, and Mossholder (1993) observed that ere- adng the perception that an organization is ready for change requires proactive attempts to influence employee beliefs, at- titudes, intentions, and behaviors. They observe that contex- tual factors represent catalysts for change and underlie the importance of creadng readiness for change in the organiza- tion. They include organizational conditions in their set of factors that can influence members' perceptions of readi- ness for change. Such conditions can affect loyalty, commit- ment, or other feelings toward the organization, thus influ- encing readiness. For example. Fox, Ellison, and Keith (1988)

230 Journal of Personal Selling & Sales Management

found that effective management practices influence employee cooperation and are associated with higher levels of readi- ness for change. An individual's perceptions of readiness for change may also be shared by the readiness perceptions of others such as leaders in the organization (cf. Griffin 1987). In other words, creating a perception that the organization is ready for change requires changing employee cognitions, an area of study that Bandura (1982) and Fishbein and Ajzen (1975) have explored in great detail.

Eby et al. (2000) provide empirical support for this asser- tion, finding that organizational variables are the most influ- ential in predicting an organization's readiness for change. They measured employees' percepdons of an organization's readiness for change with items, such as "employees here act as agents for change," adapted from the work of Daley (1991), Jones and Bearley (1986), and Tagliaferri (1991). This finding is consistent with tbose from the strategic planning and or- ganizational theory literature (e.g.. Beer and Walton 1990; Cummings and Huse 1989) and complexity and chaos theo- ries (Kauffman 1993; Waldrop 1992). If an orgatiizadon's structure is viewed as rigid and inflexible, employees are likely to hold unfavorable views about the organization's readiness for change. Based on the above work, we present organiza- tional culture, organizational climate, and organizational poli- cies as potential factors influencing the sales force's percep- tions of a sales organization's readiness for change.

Organizational Culture and Climate

McNabb and Sepic (1995) proposed a model in which cul- ture and climate are posited as key factors in understanding change. Slater and Narver (1995) posit that a learning organi- zation contains two elements of organizational culture— market orientation and entrepreneurship—and three elements of climate—facilitative leadership, organic structure, and de- centralized strategic planning. Organizational culture (e.g., Jackson, Tax, and Barnes 1994) and climate (e.g, Churchill, Ford, and Walker 1976) have been examined in prior sales work but not in relation to learning and change. If an organization's culture and climate are not conducive to change, change initiatives will likely fail (McNabb and Sepic 1995). Thus, salespeople's actions and interactions will be largely unaffected. One means of bringing about perceptions of readiness for change is to create a set of organizational work- ing conditions in which salespeople can operate more effec- tively (Pettigrew 1990).

Elements of Organi^tional Culture

An organization's culture is the deep-rooted set of values and beliefs that provide nortns for behavior (Deshpande and Webster 1989; Schein 1992). A sales organization's culture is

influential in the acceptance of change. As noted earlier, mar- ket orientation and entrepreneurship are the two chief cul- ture-related elements of concern in a learning organization.

Market orientation is the aspect of organizational culture that places the highest priority on the profitable and creative maintenance of superior custotner value while considering the interests of other stakeholders. Narver and Slater (1990) found that market orientation is an important determinant of profitability. Market orientation provides norms for be- havior regarding organizational development and responsive- ness to market information. The primary focus is on creating customer value (Day 1994; Deshpande, Farley, and Webster 1993; Han, Kim, and Srivastava 1998). Slater and Narver (1995), however, caution that overemphasis on customers can lead organizations to underestimate the value of learning sources like suppliers, consultants, universities, and organiza- tions in other industries.

Random House reorganized its entire sales group (Milliot 2001). The purpose of the restructuring was to focus re- sources on cost-effective activity and provide consistent re- porting lines. Moreover, the restructuring was designed to create tnore customized sales programs to meet the needs of various customer groups. Random House's reorganization represented an attempt to be more market-oriented. In 1990, Encyclopaedia Britannica reached an all dme sales peak, but by 1995, sales had fallen off by eight percent (Murtagh 2000). Britannica's, problem was one of not being market-oriented. The culture of the organization prevented management from seeing the impact of Encarta (an encyclopedia on CD-ROM) on the encyclopedia marketplace. Management viewed Encarta as a child's toy, missing the fact that the definition of the industry had changed. Britannica became saddled with obso- lete sales and distribution systems and a core competency that did not fit the marketplace.

P2: Firms viewed by salespeople as higher in market orientation

will be viewed as more ready for change than firms viewed as low

in orientation.

Entrepreneurship is an element of culture characterized by traits such as risk tolerance, proacdvity, receptivity to innova- tion, and resistance to bureaucracy (Kanter 1989; Naman and Slevin 1993; Sykes and Block 1989). Entrepreneurial activity involves creadng products ahead of both competitors and explicit needs of customers (Hamel and Prahalad 1991). In- novators often work with key customers to maximize learn- ing (Von Hippel 1986). Saab announced that it would take a much more radical approach to marketing to achieve its first goal of selling 250,000 vehicles per year (Miller 2000). The Saab 9-5, a strong seller, was judged too conventional. There- fore, Saab is expanding its product offerings from two ve- hicles to at least four, including moving into the sport-utility

Fail 2002

tnarket. In addition :o the product line additions, Saab is ex- panding its design studio and testing new direct marketing concepts, Internet marketing ideas, and new programs such as leasing in kc7 European markets. This tr̂ pe of entrepre- neurial culture has ^ direct bearing on the sales force's per- ceptions of an organization's readiness for change.

Similarly, Brian Gardner, Inc. created a sales software pack- age designed to help salespeople orgatilze orders, contact lists, product informatioti, and track sales records (Brannan 2001), However, the company did not fully realize the value until a C E O of another sales organization indicated that his company's sales force, Houston Technical, was experiencing difficulttes adapting a generic sales force automation (SFA) systern to their sales force needs. Brian Gardner, Inc. set up a demonstration, recetved a purchase order, and recognized, in that process, that the focus of their selling effort needed to be on solutions rather than on software. In industrial sales, software packages must be heavily customized, as it may take man)^ months to learn the processes and needs of a company that employs an inside and outside sales force. They must share information. Out of this recognition, a new company, Selltis I.LC ,̂ was created. The new company serves sales or- ganizations that sell multiple products with medium to long sales cycles to companies with sales ranging from SIO million to $250 million.

P.?; firm.^ I'lemd by sales~peopie as higher in entrepreneurial

orientation nil! he liewed as higher in readiness jor change.

Market Orientation, lintrepreneurship, and Individual learning

Slater and Narver (1994) describe a market-oriented firm as one that has an external focus and a commitment to innova- tion. Thus, the inarket-oriented firm is posidoned to sustain competitive advanrage under an\- environmental circum- stances. The work of Zeithaml and Zeithami (1984) asserts that the basic respijnsibility of marketing is to affect and manage change in the business environment. Simmonds (1986) concludes that marketing's responsibility is to induce continual change in the organization and the marketplace. In the strategic management literature, entrepreneurship in an organization is also proffered to be externally driven. Several authors have demonstrated a significant relationship between entrepreneurship and company performance under condi- tions of environmental tnarbulence (e.g., Covin and Slevin 1989; Davis, Morris, and Allen 1991; Zahra, Nielson, and Bogne 1999). Schindelutte, Morris, and Kuratko (2000) con- clude that aggressi"\ e moves by competitors, changes in in- dustry market structure, and other external factors trigger entrepreneurial activit}' in an organization.

Interestingly, when something occurs in the external envi- ronment to trigger marketing and entrepreneurial activity; it

appears that the marketing and entrepreneurship functions of the firm behave separately (Schindhutte, Morris, and Kuratko 2000). Marketers tend to emphasize satisfaction of customer needs with current offerings and operational pro- cesses. Entrepreneurial activit}^ tends to take on innovative, risk-taking, and proactive behaviors (Block and MacMillan 1993). The examination of this apparent separation of the marketing and entrepreneurial funcdons of the firm is also a worthy research endeavor. Later in the paper we will discuss learning st}'les. However, at this juncmre, it seems appropri- ate to introduce the notion of learning sty4es as they apply to marketers and entrepreneurs. It would seem that marketers, based on the observations of Schindhutte, Morris, and Kuratko (2000), favor March's (1991) concept of exploita- tion (focusing on incremental improvements) as a learning style, whereas entrepreneurs gravitate toward exploratory learning stj'les (focusing on new approaches). It would ap- pear that an examination of these two cultural variables would shed some light on the dispute over the importance of mar- ket orientation to a sales organization. Research examitiing the relative influence of these two organizational functions and learning focusing on sales force change success appears to offer great promise toward adding to what is known about learnitig and change.

P4: Firms that are more market oriented than entrepreneurial

oriented will tend to have a greater number of salespeople who

employ exploitation as a model of learning.

P5: Firms that are more entrepreneurial oriented than market

oriented mil tend to have a greater number of salespeople who

employ exploration as a model of learning.

Filements of Organisational Climate

An organization's climate describes how an organization operationalizes its culture (Schein 1993). Organizational cli- mate in a sales organization reflects the level of organiza- tional support, openness of the organization, supervisory st}de, quality of relationships, and conflicts among metnbers of the organization (Lewicki et al. 1988). Slater and Narver (1995) present the following three items as key elements of an organization's climate: (1) facilitative leadership, (2) organic structure, and (3) decentralized strategic planning.

It is asserted that how salespeople perceive these climate elements will i m p a c t their p e r c e p t i o n s of the sales organization's readiness for change. An organic structure and decentralized strategic planning—owing to their flexibility, relative absence of structure, augmented communicadon, and emergent processes—^will be needed within the sales organi- zation under conditions of business turbulence. As noted earlier, both of these organizational features are especially apropos in a changing milieu. Also, facilitative leadership in

232 foumal of Personal Selling <& Saks Management

the sales organi2ation should be enhanced under environmen- tal ferment, as it provides sales members with the needed vi- sion for guidance. Bass (1985) states such leadership tends to be particularly valuable under major organizational turmoil.

Fadlitative kadership raises the awareness of sales organiza- tion members, customers, and others about important issues. Sales leaders may arouse values that have been dormant, and they foster a climate of inquiry that challenges the status quo (Senge 1990). Previous research on climate suggests that or- ganizational variables must be consistent with the nature of the climate the organization is trjing to create (e.g., Schneider and Bowen 1993). Therefore, if a sales organization aspires to foster a climate that values .change, it must promote the importance of change throughout the sales organization, in- cluding the context in which the organization operates. We thus propose that a sales organization's facilitative leadership, organic structure, decentralized strategic planning, informal leadership support, and role conflict are critical factors con- sidered by the sales force in assessing the sales organization's readiness for change.

Warner Chilcott, a pharmaceutical supplier, has contracted with Dendrite, an innovator in pharmaceudcal technology, to deploy solutions designed to increase the effectiveness and efficiency of its sales force (Business Wire Ne2PS 200\h). Den- drite impressed Warner Chilcott's management with their knowledge of the industry and their ability' to be a leadership partner in providing knowledge, expertise, and high levels of customer service and support. Warner Chilcott's leadership recognized the need to provide salespeople with the right tools, and deliver the right message at the right time. Like- wise, RLX Technologies, the leader in blade server technol- ogy, has undertaken a program to provide broad technical support to its sales force {Business Wire News 2002b). Sales agents, an extension of the RLX sales force, receive exten- sive training, sales leads, and full access to the company's marketing materials. Management has established a program of support in which field service engineers and equipment designers now collaborate with sales agents to offer the best solutions in the shortest time frame.

P6: The more a sales force perceives that an organi^tion provides

facilitative leadership the stronger their perceptions of the

organisation's readiness for change.

Organic structure is evidenced by the adoption of an organi- zational architecture that is decentralized with fluid job re- sponsibilities and considerable lateral communications. Procter & Gamble (P&G) is changing its sales force struc- ture from one that Is retail-focused to one that is more cat- egory-specific-focused (Bittar and Hein 2001). The purpose is to induce salespeople to be category managers. For ex- ample, instead of a salesperson being responsible for all pa- per products, that salesperson will be limited to a category

within paper. The changes are designed to make P&G more efficient and responsive to customer needs. In the process, P&G's current sales force structure of four grade levels will be reduced to three. Similarly, Sun Microsystems has placed its channel member group under its sales organization and reduced the number of accounts it deals with directly (Campbell 2001). Prior to the change. Sun's direct and chan- nel divisions were separate, and solution providers were elimi- nated from many sales programs.

P7: The more the sales force perceives an organisation's stmcture

to be organic, the stronger their perceptions of the organisation's

readiness for change.

Decentralised strate^c planning, M i n t z b e r g (1994) asserts, is

especially effective in an environment that is dynamic—like that facing sales organizations today. This kind of planning tends to extrapolate from the present or deal with incremen- tal change that occurs within existing strategies. Atlantic En- velope (AE) Company adopted customer relationship man- agement (CRM) even though some of its sales force mem- bers did not have PCs (Fraona 2001). In doing so, salespeople now use wireless handheld devices to check inventories, cus- tomer purchase histories, and close sales on the spot. AE's pilot program with three salespeople was so successful that their entire sales force is now using the technology. In the future, AE salespeople will have greater decision-making ca- pabilities as they wall be able to depict complete customer data histories, perform various customer analytical procedures, and launch e-mail campaigns based on customer data.

P8: The more a sales force perceives that organisation planning

is decentralised, the stronger their perceptions of the organisation's

readiness for change.

In addition to facilitative leadership, organic structure, and decentralized strategic planning, we also include informal lead- ership support and rok conflict in. the set of climate variables that serve as additional indicators of an organization's readiness for change. How salespeople view these will also impact their assessment of the sales organization's willingness to change. ^'^Ihe.Tt2L^ facilitative leadership seeks t o inculcate a vision within

sales subordinates, vivify their latent needs and values, and heighten their awareness, informal leadership support is the de- gree of encouragement and consideration salespeople receive from their colleagues (House and Dessler 1974; Netemeyer et al. 1997). Changes in the business environment produce ongoing pressure to change. Sales competitors, when con- fronted with turbulence, often apply similar strategies to deal with change. The herd mentality offers some assurance in the short run, but may provide little advantage over the longer term. By invoking the talents of informal leaders, which exist in every sales organization, sales organizations may gain ad- vantage over the long run. If informal leaders can be identi-

\'all2002 I'S'h

fled and persuaded to support change, they add their support to every conversadon about change. A small number of indi- viduals, as informal leaders, are critical to suppordng major change (Gladwell 2000), much as it takes only a small per- centage of a populadon whose opinions are most valued to drive innovadon in the marketplace (Rogers 1983). (change is more likely to occur successfully when leaders support change and encourage the support of others.

There is considerable evidence to support the importatice of informal leadership in a sales context (e.g., Bass 1997; Churchill, Ford, atid Walker 1993; Deeter-Schmel:^ and Ramsey 1995; Dubinsky et al. 1995; Jones et al. 1998; Perry, Pearce, and Sims 1999; Tapp 1996). For example, Weitz and Bradford (1999) observe that the leadership styde of partners can affeet a sales team. Informal leaders shape opinions, de- cisions, and actions. They also have a strong impact on orga- nizational change success, j^eaders can be influential in the acceptance of sales force goals (Podsakopf, Mackenzie, and Bommer 1993) and performance ((^mnkovisch and Hesterly 1996). Informal leaders raise the awareness of CfjUeagues about key issues. They arouse values that may have beeome dormant. They encourage a climate of inquiry and learning. They encourage a challenge to rhe status quo (Senge 1990).

Digital Paper elected not to renew its reiadonship with Xerox 1 ^.ngineering Systems (XF^S) because their sales force was becoming less effeetive (Frook 2001). The company de- veloped its own sales force and began calling on joint Digital and XI',S customers. Digital salespeople were instrueted to offer customers pricing and service incentives to upgrade to a higher-end product line sold by Digital. The sales effort designeil to retain customers was given considerable support by Digital management. Informal leaders energize perfor- mance by making the path to goals easier and by increasing personal job satisfaction ((Churchill, Ford, and Walker 1993). Essentiall); perceived informal leadership support is an individual's perceptions that the organization cares for the well being f)f its employees (Eisenberger et al. 1986). Pereep- dons of informal support represent a reciprocal relationship between the individual and the organization in uhich man- agement fosters an environment that views change as an cjp poriunity rather than a threat (l,aw and Woodtnan 1995).

P9.- 'Vhe more the sales force perceives the existence of informal

leadership suppori. the stronger iheir perception.': of the

organi-:^atioi] .V readiness for change.

Role conflict occurs when employees are confronted with different expectations concerning their roles at work (Kahn et al. 1964). The moie clearly expectadons are ardculated, the more likely individual salespeople will conform to those ex- pectadons. The varitt)' of roles an individual may hold incor- porates a wide rangt of behaviors because of differing eon- texts and expectatio)is.

Modification of competencies is a process in which the need for change is recognized, the organization's existing strat- egies are questioned, and new behaviors encouraged (Huff, Huff, and Thomas 1992). If management attention shifts from deployment of exisdng competeneies to consideration of new competencies, issues may be raised as individual per- spectives on the need for change differ (Dutton and Ashford 1993). If management undertakes to define new cotnpeten- cies and how the organizadon competes comes under scru- tiny, a variety of change inidadves may be considered, and role conflicts may occur as existing and new eompetencies create divergent expectations. For example, Jackson, Tax, and Barnes (1994) call for research that investigates relationships among role conflict, customer-oriented selling, a central fo- cus of market orientation (Jaworski and Kohli 1993), and various organizational values. Jaworski and Kohli (1993) as- sert that a customer focus is a central element of an organization's market orientation, which derives from the marketing concept. Customer-oriented selling, which also derives from the marketing concept, is described as having a concern for customers, diagnosing their needs, aiming to in- crease long-term satisfaetion, and participating with custom- ers to resolve problems (Saxe and Weitz 1982). Siguaw, Brown, and Widding (1994) provided evidence that greater organiza- tional market orientation is related io higher salesperson cus- tomer-oriented selling. Fiahert}', Dahlston, and Skinner (1999), however, report an inverse relationship betv.-een customer- value orientation and customer-oriented selling performance. It is asserted that salespeople with customer-oriented selling skills are expected to be better at developing and maintaining customer reladons than those salespeople without relation- ship building skills (NX'illiams and Attaway 1996).

During the recent economic slowdown, some sales orga- nizadons used manufacturers' representatives to supplement and, in some cases, replace their sales forces. One study by the Research Institute of America found that over half of U.S. manufacturers used manufacturers' representatives ex- clusively or in combinadon with their own salespeople (Harper 2001). Somedmes it is difficult to convince distributors that manufacturers' representadves want to support their sales efforts. One reason for this is that some of the manufactur- ers' representatives are distributors themselves. Distributors have always harbored fears that manufacturers' representa- tives would take their business direct to final customers.

There are many forms of role conflict and a discussion of these is beyond the scope of this paper. However, another illustration of role conflict is provided. Total Administradve Services Corporation (TASC), a leader in administration of tax advantage employee benefit plans, expanded its sales force by 30 percent, including hiring 15 new regional sales direc- tors, a national sales director, and a national sales manager

s.^ WireKeml^^Vo). TASC is expanding into new mar-

234 journal of Personal Selling (& Saies Management

keting and sales areas as well as penetrating existing markets. The addition of new regional sales directors will allow sales- people to have direct relationships with those regional sales directors, the objective being to improve client service. When new roles are added^ role changes are likely to occur and role conflict may be the result The incidence of role conflict may become acute if customer expectations of service are height- ened as a result of selling organization changes.

P10: Sales force perceptions of role conflict will be negatively

associated mth perceptions of organisational readiness for change.

Role Conflict and Individual learning

When a customer makes unexpected demands, salespeople may be the ones to whom those demands are made. Sales representatives may want to initiate change immediately to appease the customer. However, mid-level sales managers, exposed to sales representatives' calls for change, may see a need for permanent change in sales force strategy rather than an adjustment made by one sales representative for one cus- tomer. Top management tends to receive change cues from middle management, who are likely to filter cues from sales- people to promote their own favored agenda. In other words, learning is required at all levels of the sales organization. Complicating the learning issues is the fact that how situa- tions are interpreted may or may not be consistent with cur- rent competencies. These perceptual differences represent a potential source of role conflict (Floyd and Wooldridge 1992, 1994). Siguaw, Brown, and Widding (1994) suggest that if a salesperson desires customer orientation to be high, but the organization does not, role stress in the form of role conflict can be high. As a company value, customer orientation rep- resents part of an organization's culture (Beattj' 1988) and indicates a value premise in which the customer is acknowl- edged as critical to the organization. Relationship manage- ment theory underscores the need to develop relationships between salespeople and customers (Dwyer, Schurr, and Oh 1987). Flaherty, Dahlston, and Skinner (1999) posit that such organizational values must be accurately received. Alterna- tively, salespeople may be driven by different values (e.g., cus- tomer-oriented versus financial-oriented) than the organiza- tion. To the extent that this occurs, salespeople may experi- ence role conflict. This role conflict could lower the sales force's motivation to learn.

P11: Increased perceptions of role conflict will be associated with

lower levels of learning orientation among the sales force members.

Organizational Policies

Organizational policies represent the fourth set of variables that affect an organization's readiness for change. Managing

the organization's ability to support change also reHes on managing organizational policies. Simply stating that change is forthcoming is not sufficient (Thompson and Luthans 1990). Organizational policies must be consistent with the desired change. Two policy elements critical to sales force perceptions of change readiness are training and rewards.

Training

Performance and productivity improvement are critical orga- nizational goals. Therefore, it makes sense to target training toward behavioral changes required to implement organiza- tion-wide change strategies. Caudron (1993) observes that it is important for organizations to distinguish between aware- ness training and behavioral training. Indeed, it has been shown that, after behavioral skills are learned, emphasis can be placed on training to enhance effectiveness. This, in turn, has been demonstrated to promote a culture that fosters change (Toppert 1993).

Xerox Corporation is employing its direct sales force to focus on the high-end copier market (Hilson 2001). The move is part of Xerox's need to provide improved customer ser- vice. Xerox is attempting to make color printing as cost-ef- fective as black-and-white printing. The company is collabo- rating with software-focused resellers to create solutions us- ing its multifunction products in conjunction with Microsoft Exchange and Lotus Notes. It is estimated that the size of this market is $1 trillion, and the key to capturing customers will be the expertise of Xerox salespeople in offering color printing capability that is fast and affordable. Training the sales force on the lessons learned from software-focused resellers will be the key to Xerox's efforts to capture market share.

Dubinsky (1996) reported a positive correlation between sales training effectiveness and the rate of product obsoles- cence. Under such circumstances, change is rapid and sales- people must be capable oi transitioning between selling prod- ucts that are becotning obsolete and learning to sell new prod- ucts. Change often necessitates the acquisition of new skills, leading to a need for training and adjustments in the sales force skills portfolio (Schuler and Huber 1993). Similarly, as competition intensifies, salespeople must be adept at coping with the associated change. As competition intensifies, the need for training increases (Ingram and LaForge 1992). How- ever, Chonko, Tanner, and Weeks (1992) observe that many sales organizations ignore areas that impact training effec- tiveness including the organization's comrmtment to training and rewards for learned behaviors. Sheperd and Ridnour (1995) support this observation, noting that sales training continues to focus on traditional topics.

P12: Sales organisations that emphasise training will be viewed

as more ready for change by the sales force than sales organisations

tbat do not emphasise training.

b'all2002 235

Kewards

Management must create an atmosphere in which trust, open- ness, and innovation are paramount if employees are to per- form at high levels. Management that is trained to provide appropriate rewards for high performers will likely encour- age people to want to perform at high levels (McNabb and Sepic 1995). It has long been known that motivation plays a key role in directing sales performance (cf Weitz., Sujan, and Sujan 1986). (Hionko, Tanner, and Wbeks (1992) reported that salespeople attach high levels of importance to various re- wards including pay raises. However, they conclude that no single reward package is universally acceptable. Tyagi (1985) reported that organizational climate influences desirability of various rewards, whereas Apasu (1987) observed that reward effectiveness depends on the congruit}' of organizational and individual values. In other words, in a turbulent environment, salespeople ma\' be asked to change their behaviors with re- spect to changes occurring in the marketplace. To the extent that new beha\"iors are advisable and old behaviors deemed obsolete, new rewards ma\- also be advisable and old rewards may be obsolete. Symantec, a software database company, recognized this a decade ago ((^ronin 1992). The company shifted its reward structure, paying salespeople for \A-hat prod- ucts reached consumers (a "sell through" focus), not what was sold to distributors. The challenge for Symantec was to encourage distributors to share customer data. Symantec asked its distributors to provide monthly reports of products de- livered to retailers and corporate accounts by zip code. Since salespersoti pa\" is based on retail success, Symantec has ex- perienced a tremendous increase in customer service pro- vided by salespeople.

PI3: Sales organ'Rations that are willing to change their

compensatioti structure when they change the salesperson's job will

be viewed as more r-ady to change hy the sales force.

To summarize, how- salespeople view environment^ tur- bulence, organizational culture, climate, and policies is indica- tive of the sales force's perceptions of the organization's readi- ness for change. Culture, climate, and policy variables that are seen as supportive of sales force change activities in the face of business turbulence will increase the likelihood that salespeople will view the sales organization as ready for change. To the extent that culture, climate, and policies arc viewed as non-supporti\'e of ^ales force efforts in times of turbulence, salespeople will view^ the sales organization as less ready for change. If sales organizations really wish to motivate their sales force's responsiveness to changing environmental con- dituMis, they must first take a hard look at the extent to which their culture, climate, and policies are in alignment with their change strategies.

Individual Learning Orientation

Learning orientation of salespeople, identified in Figure 1, is reflected in a set of values that allows extant knowledge to be questioned (Sinkula, Baker, and Noordewier 1997). It reflects the degree to which sales organizations and sales force mem- bers are encouraged to learn. Environmental mrbulence would seem to foster a learning orientation among salespeople. When customers change or competitors change, for example, sales- people would seemingly be interested in gaining knowledge of the changes and, subsequently, adjusting sales strategies or tactics to react to those changes. Salespeople, whether on a sales team or not, might seek information from other mem- bers of the team or their peers about the changes taking place in the business environment. Under conditions of high tur- bulence, then, the organization and the sales force are drawn closer together by the need to keep current. This "closeness" results in a stronger impact of culture, climate, and policies on the learning orientation of the sales force.

: High turbulence fosters a higher learning orientation among

the sales force.

As noted by Baker and Sinkula (1999), various interpreta- tions (jf market orientation have an operational focus on market information-processing activities concerning custom- ers and competitors. Market orientation is a continuous pro- cess of inter|3reting memor)', the success of which depends on decision rules for accepting/rejecting new information (Day 1994). Whether such an organizational environment is fostered, though, is likely to be a function of the degree to which an organization manifests a learning orientation. Armenakis, tlarris, and Mossholder (1993) assert that the pri- mary mechanism for creating reatliness for change among empk)yees is the message for change. The message must in- clude the discrepancy between the existing state of affairs and the desired state.

A learning orientation is likely to increase the rate of change in a firm (Baker and Sinkula 1999). If organizations place minimal value on learning, little learning will likely occur (Sackmann 1991), thus hampering effective organizational change. Nystrom and Starbuck (1984) assert that higher-order learning is needed for firms to unlearn obsolete knowledge. Market orientation directs and prioritizes learning activity. The importance of sales force member knowledge (gained via learning) has been emphasized in selling (e.g., Weitz, Sujan, and Sujan ] 986). Siemens Power T&D was a minor division within Siemens Energy when it was spun off to exploit new business opportunities presented by deregulation of the in- dustry (Cohen 2001). However, Siemens's parent company employed inefficient methods of tracking and sharing sales information. The old system was one of sales representa-

23 6 Journal of Personal Selling <& Sales Management

tives e-maiUng spreadsheet analyses to managers in five divi- sions, but the managers in different divisions rarely commu- nicated. The parent company was slow to change. But Siemens came across salesforce.com and within two days had a CRM system in place. Managers now have the capability of access- ing up-to-date sales and contact information, allowing them to track opportunitj^

¥15: Sales organisations higher in market orientation will foster

a higher learning orientation among the sales force.

How individuals learn has been the subject of consider- able conceptual work. In this paper, our purpose is not to provide a comprehensive review of learning styles. Nor is it to make recommendations concerning which of these learn- ing styles conceptualizations is best suited for etnpirical use. Thus, the ensuing discussion of individual learning does not include a discussion of existing learning taxonomies. For a review of this literature see, for example, Baldwin, Danielson, and Wiggenhorn (1997), Crossan, Lane, and White (1999), Miller (1996), and Sinkula (1994). Suffice it to say that these individual and organizational leartiing st\-les tnust be under- stood if effective learning is to occur.

In their presentation of how individuals learn, Slater and Narver (1995) emphasized the organizational variables of climate and culture as key factors in understanding learning. Research on organizational culture and climate suggests that one's experiences shape percepdons of an organization con- certiing specific aspects of that organization (e.g., Schneider 1975, 1990). Presumably, salespeople learn from their expe- riences. Change success requires that organizations seek and learn new ways of doing things while concurrently parlay- ing their present knowledge (March 1991). Learning will likely be instrumental in affecting successful change. As such, leartiing is also posited to strengthen the relationship be- tween percepdons of the organization's readiness for change and salient individual and organizational measures of change

success. P16: A higher salesperson learning orientation strengthens the

relationships between perceptions of organisational readiness for

change and change success.

Individual salespeople have the propensity for stability or change (Cooke and Szumal 1993; Reynolds 1986). Individu- als may be open to change or have a need for the security that is satisfied by routine bebavior (Hofstede et al. 1990). In their work on boundary spanning, Yan and Louis (1999) assert that "boundary-competent" leaders are those with diagnos- tic competence to anticipate and monitor the need for change and plan responses to the new needs that arise as a result of the recognized need for change. As salespeople are boundary spanners Qones, Roberts, and Chonko 2000), they may be in the best position to take on the role of "boundary-compe-

tent" leaders. From a leartiing perspective, available knowl- edge on what boundary work entails may not adequately re- flect the contemporary sales situation. Therefore, the bound- ary-competent leader must have an outward focus to antici- pate and monitor change. Lower levels of learning orienta- tion, emphasizing exploitation of existing routines and a fo- cus on shorter-term outcomes, may not be sufficient to meet change. Higher-level learning orientations may be necessary.

Participate Systems provides software that allows sales- people to share their working "know-how" in many ways [Business Wire News 2002^. Salespeople can submit questions to experts in the sales community, poll a subset of their peers on a particular topic, access discussion boards, or read sales success stories. Combined with a portal provided by BEA Systems, tbe idea is to increase salesperson communications efficiency by tapping into the working knowledge of an en- tire sales team. Such knowledge will allow salespeople to le- verage their current knowledge and past understanding to make faster more informed decisions.

P17: Higher levels of sales force learning will be positive^

associated with change success.

March's (1991) work on learning is based on studies of the adaptive process and the relationship between explora- tion of new possibilities and the exploitation of old certain- ties (e.g., Holland 1975; Kuran 1988). The essence of explo- radon is captured by terms such as search, risk taking, experi- mentation, discovery, and innovation. Exploitive learning is the result of repetition and routine and includes such things as goal development and decision rules (Cyert and March 1963). Exploidve learning tends to occur in contexts that are well understood (i.e., conditions of low environmental turbulence) and in which management thinks it has control. In a selling tnilieu, sales trainees engage in lower-level learning when they become familiar with how to complete expense reports, dem- onstrate a canned sales presentation, or internalize the pa- rameters for granting discounts to prospects.

Exploitation is characterized by terms such as refinement, production, efficiency, and implementation. March (1991) asserts that organizations that heavily emphasize exploration as a mode of learning are likely to suffer higb costs of ex- perimentation without realizing much benefit. Undeveloped ideas and too few distinctive competencies result from an overemphasis on exploration. Alternatively, organizations that place too much emphasis on exploitation are likely to find themselves mired in the status quo. March (1991) concludes that a balance between exploitation and exploration is needed.

Exploration learning focuses on adjusting rules and norms rather than specific activities and behaviors. The associations that evolve from higher-level learning have a longer-term impact on the company. This type of learning occurs through heuristics, skill development, and insights (Fiol and Lyles

Fait 2002 237

1985). The context for exploration learning is usually am- biguous (i.e., conditions of high environmental turbulence), making repetitive behavior meaningless. Unfortunately, a cri- sis within a firtTi is usually needed to move from cxploitive learning to exploration learning (Miller and Friesen 1983). Salespeople mav manifest exploration learning, for insiancc, when they seek to overcome a unique problem for a pros- pect, discern how to deal with ethically troublesome situa- tions, or determine how to gain the willingness of the pro- duction personnel to ramp up manufacturing quantities to satisfy a key account.

Wheti an external event leads to a need for change, a higher Learning orientation strengthens the perceptions that an or- ganization perceiveti as ready for change will realize change success (Hurst 1995; Miller 1990), We posit that if individu- als and the organization are operating at lower levels of learn- ing, sales force perceptions of the organization's readiness for change will be low. Under such circumstances, etubcdded routines will dominate individual and organizational activit\; Alternatively, if individuals and the organization are operat- ing at higher lercis of learning, new ideas and strategies will be explored and the organization will be more Ukely perceived as ready for chatige by the sales force.

PI 8: Sales force members who favor exploitation learning will

view their organi:(ations as less ready for change than sales force

members who engage in exploration learning.

Performance Outcomes: Assessing Change Success

We now examine the impact ot orgatiizational readiness for change and individual learning on key success measures. In Figure 1, our framework identifies both organizational and individual cjutcome measures used to assess change success, The ultimate treasure of success for change initiatives is whether performance (however defined) is enhanced. After aij, making changes m an organizational setting is directed at making the organization more effective and efficient. Slater and Narver (1995), m their work on market orientation anti learning, identify customer satisfaction, sales growth, new product success, and profitability as key outcome variables. They recognize, though, that for companies aspiring to be- come learning organizations, traditional measures of perfor- mance are inadequate (Garvin 1993). (]honko et al, (2000) call for the establishment of criteria to measure each of the elements of sales success. In the context of sales force change, we present three broad sets of indicators of the success of change initiati\'fs: (1) individual salesperson success measures, as described by behavioral-based and outcome-based mea- sures; (2) intcrtiiediatc measures of chatige success—used to assess the progress of change processes as they take place in the sales organization; and (3) organizational outcomes that are reflective ot higli performing sales organizations.

Individual Performance Measures

The development of performance criteria for the sales force has been a long-standing topic of research (cf Chonko et al. 2000; Skinner 2000). As Morris, LaForge, and Allen (1994) observe, a key aspect of sales force management is the devel- opment of a list of factors that differentiate the successful from the unsuccessful salesperson. The traditional approach to measuring sales success has incorporated outcome-basedmt-A- surements (e.g., sales volume, market share). Such measures require very little monitoring of salespeople, minimal mana- gerial direction, and straightforward measurement of results (Anderson and Oliver 1987). However, these managerial side effects related to the use of outcome variables may not be in the best interest of a firm undergoing change and attempting to manage sales force change. By not being "close" to the implementation of change, management may be ignoring the learning (or potential learning) that occurs from the use of bebavior-based rae-a.sures (e.g., selling process knowledge, new account generation activities, utilization of sales strategies). Such behavior-based measures are not indicators of results but are anticipated to lead to results (a la intermediate out- comes) (Oliver and Anderson 1995). Garvin (1993) observes that traditional measures (e.g., sales volume) suggest only one learning driver and ignore the possibilities of learning in ma- ture industries where output is flat. They also overlook the possibility that learning might be induced by other sources such as new technologies or challenges posed by competitive offerings.

The Pepsi Cola Buffalo Bottling Corporation p n m d e d its sales force with Palm m505 color handheld computers to in- put, track, and process sales orders (Business Wire News 2001A). The combination of focusing on outputs and processes has led to excellent results for Pepsi salespeople. The Palm tech- nology has helped reduce sales process time and increase customer service time provided by sales representatives. Sales representatives carry up-to-date sales data in their Palms, in- cluding customer purchase history, monthly and yearly com- parisons, and fuU-year sales summaries for each customer.

PI 9: Organif^ational readiness for change will positively impact

.salesperson performance as assessed by both outcomes-ha.wd and

behavior-based measures.

Intermediate Outcomes

Change management is concerned with the successful intro- duction of innovations in an organization. But the results of change can be long-term in nature. Success in change man- agement initiatives is more than just the measurement of sales increases. Success also depends on the organization's ability to manage the change process and to create intermediate outcomes in order to monitor the progress of change initia-

238 foumal of Personal Selling <& Saks Management

tives (Carr, Hall, and Trahant 1996). Examples of intermedi- ate performance outcomes during the change process include such aspects as the responsibility for goal achievement is clearly assigned, rewards and sanctions are used to support change, salespeople understand the need for change and what is required of them to support the change, and the organiza- tion structure is aligned to reflect changes in management practice (Carr, Hall, and Trahant 1996).

Scott-Levin generates a Web-based report generator to pharmaceutical sales forces (Business Wire Nem 2002d). Fea- tures and benefits of the report generator include a focus on intermediate sales outcomes such as: (1) information gather- ing—ability to conduct queries entirely over the Internet; (2) communication—e-mailing of reports to colleagues; (3) time—system simplicity results in less dme finding and assessing information; (4) st^de—production of more effec- tive visual presentations; (5) adaptation—the ability to change any aspect of a query in the middle of a report; and (6) the creation of custom queries. All of these outcomes are de- signed to improve the effectiveness and efficiency with which pharmaceutical salespeople perform their sales jobs.

Salesnet, an SFA subscription service, now provides activ- ity reporting {Business Wire News 2002c). The activity report- ing allows salespeople to uncover and understand areas of customer sales cycles that need special attention or for which additional training is required. It also provides information on where salespeople are performing daily activities such as making appointments, communications, and various other sales activities. Salesnet is endeavoring to use activit)' report- ing to encourage their salespeople to sell more effectively and more efficiendy.

P20: Organisational readiness for change will positively impact

the use of intermediate measures of performance.

Sales Organization Outcomes

Colletd and Chonko (1997) present several characteristics of high-performing sales organizations. A high-performing sales organization is one that outperforms its competition and consistently meets or exceeds the needs of its customers. High-performing companies achieve their results by attract- ing, retaining, and expanding their business with the right cus- tomers. They attain the status of high performance through people—the ability to hire and retain dedicated profession- als. They actively employ teams that develop, maintain, and re-create competencies to sustain growth. Several outcome variables by which high performance can be measured are:

• revenue growth has been greater than that of the industry for the last three years;

• demonstrated success in selling new products;

• a proven track record in successfully acquiring new accounts;

• a high rate of customer retention; • a demonstrated proven success in customer retention; • an excellent track record in salesperson retention; and • sales-expense ratio is lower than that of the industry.

P&G employs technology-based solutions provided by Dendrite in order to enable its pharmaceutical sales force to achieve maximum productivity in the field (Business Wire 2001a). Through the use of their technology, Dendrite has helped P&G to improve their management of customer re- lationships and increase their share of the market. The tech- nology helps P&G salespeople create unique, analytically driven solutions that are influencing customer behavior. Sales- people can now evaluate competitive activity, record customer and prospect data, access databases, track promotional activ- ity success in order to ensure sales goal achievement, and improve the management of necessary sales force activities.

P21: Organisational readiness for change will positively impact

sales organisational outcomes.

In studies of learning, balancing exploration and exploita- tion is described by distinctions between refinements of ex- isting technologies and inventing new technologies (Levinthal and March 1991). In a sales force context, sales force mem- bers that focus on exploration reduce the rapidity with which their skills are improved. For sales force members who focus on exploitation and improving existing competencies, explo- ration is less attractive (Levitt and March 1988). Enesco Group, Inc., a leader in the gifts, collectibles, and home decor market, is employing both types of learning. Their Home Gallery line of gift and accent products w ^ continue to be sold by the company's in-house sales force with a focus on exploiting sales strategies directed at specialty card and gift retailers. They have also employed the services of about 100 independent sales representatives who will explore ways to sell the company's line of decorative home and dinnerware accessories to lifestyle and decorative accessory retailers and major accounts.

Nu Skin Enterprise Ltd. projected a 30 percent growth in sales in Southeast Asia in 2002 {Business Source Premier 2001). The combination of recruiting new sales force members and introducing new products is expected to contribute to the achievement of this goal. Nu Skin has invested considerable resources and time in developing innovative products, learn- ing about customers, and recruiting new sales representatives. Existing sales representatives w ^ have to learn new prod- ucts; new sales representatives will have to learn the sales job and old and new products in order to be successful in goal achievement. To the extent that learning occurs, the com- pany is likely to achieve its goals.

239

OppenhiemcrFunds has remodeled its distribution network Co be more custromtr-oriented and ser̂ '-e its clients more ef- fectively (Hunter 2()02). Traditionally, fund companies have segmented their wholesale groups into banking, brokerage, and financial planning channels. Salespeople were assigned to specific businesses. Oppenheimer created two divisions— one that addresses salespeople at the branch level and a key account division that deals with senior executives. Wholesal- ers are now divided into seven geographic regions, (̂ llient ser- ^ace and reduced saJesper.son travel time are two goals of the reorgamzaticjn. As large clients make decisions for all their subsidiaries at the fxecuti\'c level, it did not make sense to treat each subsidiary separately. Now, one Oppenheimer sales representative calls on one client instead of assigning a par- ticular sales represeatative to call on a particular subsidiary. Whereas the change risks alienating some customers, Oppenheimer has taken steps to ensure that its salespeople maintain their relationships with their clients. The sales 'iorcc c o n s o l i d a t i o n p r e s e n t e d a l e a r n i n g o p p o r t u n i t y for Oppenheimer's sales force. Early results indicate a 12 per- cent increase in sales of mutual funds over the same month in the prior veatr.

orie^itatim mil perform

'afion

P22: Saksptopk wit-h aposith

al higher levels than salespeopk

under conditions oj change.

DISCUSSION

The focus of this paper was to propose researchable propo- sitions investigating the impact of business turbulence, orga- nization culture, climate, and policies on salesperson percep- tions of the organisations readiness for change, and to fur- ther proffer that these perceptions impact change success. In the 195()s, Penrose {i 955) emphasized managerial competence as a key engine of organizational growth. In the 1960s, likert {196"̂ ) advocated the accounting for investments in human resources and the costs of managerial activity' that might de- plete th(.)se human resources. The 1990s saw a renewed em- pha.sis on competitive advantage through people, with efforts focusing on die creation of human know-how as a primary means by which companies can create economic value (Pfeffer 1995). Today, investiag in the competence of an organization's salespeople seems to be an economic necessit\^ (Edvinsson and Malone 1997). like Armenakis, Harris, and Mossholder (1993), this paper argues for a proactive approach to readi- ness for change. The framework of Armenakis, Harris, and Mossholder (1993) argues for the \<\cnn'iicmon of where change is needed and the development of programs that in- fluence beliefs, attitudes, intentions, and behaviors so change can be implemented successRiUy. In our approach, the cre-

ation of readiness for change is not only a pre-change con- cern. Rather, through an orgatiizadon's culture, climate, and policies, a readiness for change is maintained and adapted such that sales force members perceive that the organization is indeed change-ready and that such readiness efforts are manifested throughout the entire sales organization.

In addition to the relationships specified in Figure 1, the matters of organization readiness for change, learning, and change success are rich with research and managerial impli- cations. Change initiatives are typically directed at improving a sales organization's status quo in some domain (e.g., adop- don of a CRAI model). Historically, however, organizations undertaking change initiatives have experienced problems (Demon 1996; Galpin and Robinson 1997; Geisler 1996; Harari 1997). Therefore, recognizing that change is difficult to accomplish, especially in large organizations, it is still re- quired to affect continued improvement. So, too, is the de- velopment oi a change orientation that brings continuity to changes initiated by the organizadon (Hunt and Morgan 1995; Hurst, Rush, and White 1989).

One reasoti for these less than desirable results may lie in organizational policies as they relate to change inidatives. For example, Erffmeyer and Johnson (2001) reported that firms are generally satisfied with their SFA efforts. However, many of the respondents viewed the implementation of SFA as negative. Problems associated with implementation included lack of training and interfacing with other funcdonal areas of the firm. It appears that, for salespeople to "buy in" to change, management must provide training if SFA programs are to realize success potential. Issues related to organizational poli- cies and their impact on change, such as sales force training and rewards, appear to be fertile ground for researchers.

We posit that organization readiness for change, organiza- donal culture, climate, and policies are simultaneously viewed as indicators of an organizadon's change readiness. This view- point differs from that advanced by McNabb and Sepic (1995), who portray culture as an antecedent to climate and policies. We do not necessarily disagree with this conceptualization. However, our purpose was to delineate organizational fac- tors that are influential in affecting sales force perceptions of an organization's readiness for change. Enterprising research- ers can embark on a research pilgrimage that delineates rela- tionships among these various organizational variables. If, in- deed, organization readiness for change affects change suc- cess, examination o£ the relationsJiips among the variables that constitute organization readiness for change can only add to our understanding of change success in the sales force.

As observed by Leigh and Marshall (2001), market adapt- ability implies the necessity of rapid and targeted response to changing business conditions. The adaptable organization IS one that is ready to change. Focusing on one aspect of

240 foumal of Personal Selling (& Sales Management

organizational readiness for change, Homburg and Pfesser (2000) noted that being adaptable cannot be separated from the beliefs that underlie an organization's culture. In other words, the culture of an organization has much to do with the change readiness of the organization. If culture was not an issue in change, sales organizations could quickly become more market-oriented and, therefore, presumably more ready for change. Researchers, again, have opportunities to study types of sales organization cultures that fit market-oriented firms and facilitate change implementation in the marketplace.

Individual learning is also a key element in Figure 1. Schol- ars view learning as a process that develops and adapts over dme. They perceive learning as linked with knowledge acquisi- tion a n d improved business performance (e.g., G a r v i n 1993). I n -

deed, this has been the case with the introducdon of pro- grams like CRM, which bas been viewed as a sales tool, a marketing tool, a customer service tool, a technology, and a business model. There is still a lack of understanding of what CRM really is, and this lack of understanding speaks to the necessity of individuals, including salespeople, to learn more about CRM. In essence, sales force learning requires the gen- eradon of new ideas that lead to altering the way work is performed, thus triggering performance improvements. In preparing for a change like a CRM or SFA inidadve, for ex- ample, organizadonal culture, climate, and policies may have to be realigned prior to the change. Adaptability demonstrated by the organizadon is likely to increase sales force percep- dons of the organizadon's readiness for change and salesper- sons' confidence in the success potendal of the change. Sales organizadon management would be advised to foster confi- dence among salespeople through programs designed to pro- vide learning opportunides for the sales force—what the change is all about, why the change is being made, how the change will benefit the organizadon and the individual.

In examitiing organizadonal readiness for change, research- ers are presented with a framework that provides some struc- ture for evaluadng the ambiguous and often chaodc state that characterizes changing organizadons. Implicit in Figure 1 is the requirement of patdcipadon and the percepdon of flex- ibility on the part of the sales force if change efforts are to be successful. This requirement may be most perdnent in the area of measuring change success. In Figure 1, a number of potendal outcome variables useful in assessing change suc- cess are presented. Chonko et al. (2000) called for research- ers to create improved performance measures for sales force performance. This same call was voiced by Avila, Fern, and Mann (1988), who presented arguments for the use of mul- dple measures to assess sales force performance. The change literature in general, and the customer reladonships literature in pardcular to sales force management, are replete with calls for outcome-measures research to determine how to best assess performance under condidons of change. As more

sales forces adopt CRM or other reladonship management approaches, new success measures must be idendfied and tested for their validity (Campbell 1990).

CONCLUSION

In their work concerning change and the sales force, Colletd and Chonko (1997) observed that sales organizadons must be responsive and adapdve to change. A sales organizadon is not ready for change when sales organizadon culture, climate, and policies yield sales force strategies and tacdcs that are not consistent with customer needs and changing customer re- quirements. Under such circumstances, organizadon policies may require that the sales force engage in obsolete sales prac- dces. In a sense, the industry has seemingly passed the sales force by and customers see diminished added value provided by sales representadves.

Obsolescence consdtutes a potendal threat to the indi- vidual salesperson and to the organizadon if salespeople are not up-to-date. Obsolescence in the selling funcdon leads to the Creadon of a gap between sales job requirements as dic- tated by the business environment and personal competen- cies. The threat of becotning obsolete is indicadve of the need for change. As noted earlier in this paper, some incen- dve or galvanizing circumstance must exist before individu- als will give serious consideradon to change (e.g, turbulence). In a sales setdng, salespeople must simply act in a way that is consistent with how customers want to conduct business. To the extent that this does not occur, salespeople risk engaging in ineffecdve and obsolete sales strategies and tacdcs.

Managing change ultimately implies changes in behavior and culture, both of which take dme (Beer and Walton 1987). Sales force learning, as it relates to change, must be viewed as an investment with short-term and long-term payback. Many sales organizadons, however, typically concentrate on the short-term performance goals, with litde emphasis placed on learning skills that will provide long-term benefits (Sujan, Weitz, and Kumar 1994). Mardn (1993) describes many or- ganizadons as having management that does not see what is cridcal in their markets. In reality, these organizadons have become immune to learning. An inability to learn and adapt leads to undesirable circumstances for sales organizadons (Gouillart and Sturdivant 1994). Unfortunately, a common response by such orgatiizadons is the "program du jour" such as total quality management ^TQM), "world class service," or CRM. Such programs advance business philosophies, pro- vide a sense of warmth to employees, but, all too often, have reladvely little impact on the delivery of long-term customer value. Hence, there is considerable dissadsfacdon with the results of these change programs and considerable resistance to implemendng new change programs due to the negadve brand image that has evolved. In today's turbulent business

Fall 2002 241

environment, sales organizations must embrace change and learning. Being in a steady state of change readiness is the first step to sales force success.

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