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Introduction

The competitive sales landscape is changing rapidly, moving away from the traditional arms-length transactional exchange and more towards the relational exchange (e.g., Ingram et al. 2001). Within this changing competitive environment, firms need greater flexibility to proactively and quickly reallocate critical resources (Storbacka et al. 2009) in order to meet customers’ changing exceptions. Although it is suggested that salespeople are becoming more interdependent (i.e. dependent on their colleagues) to acquire the necessary resources needed for effective work with customers (Schmitz 2013; Kennedy et al. 2001), research has yet to systematically examine such flexibility in salespeople internal resource exchange.

The main focus of this research is, therefore, the investigation of the role of flexibility within the exchange relationship among salespeople, i.e. sales intra-functional flexibility (SIF). In order to define flexibility within the context of sales intra-functional relationships, we turn to social exchange theory (SET) and explicate the resource movement between salespeople in dynamic market conditions via their social processes (Emerson 1987). Secondly, we posit that as salesperson customer orientation (CO) levels increase there will be a greater sales function-wide cultural value system that encourages information sharing and salespeople collaboration within the sales function, and this culture is expected to enable salespeople to open-up to customer-related information from the wider sales organization (Malshe 2009; Sheth and Sharma 2008). Thus, we argue that high levels CO should facilitate the effectiveness of SIF on performance. Finally, we argue that efforts to increase flexibility between salespeople may also result in reduction of role ambiguity (RA) that would in turn reduce any negative performance consequences associated with RA (Mohrman 1993). That is, where a salesperson is more flexible in co-working with other salespeople within the sales function, the salesperson’s primary task of satisfying customer needs should be given greater priority. Where the task of satisfying customers is clearer to salespeople, sales unit performance should be correspondingly positively affected. While avoiding RA and its negative consequences is key, current understanding of the role of salesperson RA in the relationship between SIF and performance, and the extent to which CO interacts with SIF to reduce RA, is limited. Thus, in view of repeated calls for systematic reconsideration of the salespeople’s role within the competitive marketplace (Brown et al. 2005; Steward et al. 2010), we contend that greater understanding of the interplay between SIF, CO and RA is one important way to more clearly explain the mechanisms for enhancing sales function performance in changing, competitive environments.

Theoretical Background and Hypotheses

Despite widespread acknowledgement that flexibility plays an important role in organizational success, most sales unit level studies tend to concentrate on the salesperson’s external behavior and relationships with customers. This is achieved by researching adaptive selling behavior or agility (e.g., Dixon et al. 2001; Hughes et al. 2013) with less attention directed to understanding how salespeople may engage in internal relational exchanges. To address this oversight this study draws on SET to study the exchange relationship between salespeople as a dynamic process in which they continuously adapt to each other’s needs by modifying their resources in order to respond to those needs (Newcomb et al. 1952). Based on the norm of reciprocity (Blau 1964), adaptations that a salesperson exhibits towards his/her colleagues will be reciprocated by adaptations made by those salespeople benefiting from such modifications, and vice-a-versa. Flexibility of salespeople in moving resources within their departmental boundaries in order to address changing market demands will enable salespeople to leverage their resources effectively through: (a) reorganization of their shared resources to seize market opportunities and to solve market and customer-related problems, (b) harmonized sharing of such resources and (c) joint efforts in implementing these newly structured resources. Based on SET, we define SIF as ‘the extent to which salespeople redefine, reconfigure, reallocate and redeploy sales resources within the sales unit’ (Dewsnap et al. 2012, p. 116). As a relational norm, flexibility represents a ‘good faith’ modification, one that fosters mutuality and connectivity between salespeople (Macneil 1980; Noordewier et al. 1990) and consequently, enhances performance. For example, greater flexibility in managing resources enables salespeople to switch critical resources (e.g. personnel and budget) amongst themselves and re-focus their joint efforts on supporting their colleague in dealing with the market issue he/she might be facing. In addition, greater closeness and understanding of flexible resource usage ensures greater solidarity, consensus and trust among salespeople. This can help increase sales function effectiveness. When intra-functional exchange is high, there is greater willingness of salespeople to support one another emotionally and logistically, helping build a sense of mutuality and togetherness, which can then be extended to customers. Thus, greater good faith flexible resource exchange between salespeople would mean that salespeople would find it easier to ensure that the best customer opportunities are exploited. As such, we expect that increases in levels of SIF would lead to increases in sales function performance (Johnson et al. 2003). Accordingly, we posit:

H1:

SIF is positively related to customer, market and financial performance.

Extant empirical research confirms that RA significantly decreases salesperson performance (e.g. Ford et al. 1985; Fry et al. 1986). Implicitly, when salespeople are certain about what they are expected to do in their job they should perform better (Ford et al. 1985). We argue that the extent to which salespeople apply SIF should enhance their ability to serve their customers better and also develop better relationships with their sales colleagues (as they are required to share resources among each another). Such supportive sales behaviors, in turn, lead to clarifying their respective roles within the sales team, as each salesperson would work towards superordinate goals in sales, rather than each individual salesperson taking a parochial view. The primary job of the salesperson, which is to satisfy customer needs (Homburg et al. 2011) is made clearer and more compelling for salespeople when levels of sales resource sharing is higher. By this, sales function tasks and expectations are clarified to salespeople when SIF is higher. Accordingly, although RA has a negative relationship with performance, SIF should work to decrease RA. Hence, we contend that:

H2a:

High levels of SIF will lead to decreases in salesperson role ambiguity; and (H2b) high levels of salesperson role ambiguity will lead to decreases in firm performance. Thus, the direct effect of SIF on firm performance will be mediated by salesperson role ambiguity.

CO is “practising the marketing concept by trying to help customers make purchase decisions that will satisfy customer needs” (Saxe and Weitz 1982, p. 344). CO is seen as a long-term oriented activity, which can ultimately binds salespeople together around a common customer-related purpose (Kennedy et al. 2001). Further, CO makes salespeople more responsive in respect of addressing customer needs (Wachner et al. 2009), as it furnishes salespeople with the knowledge to better tailor products and services to customers relative to competitors. Hence, we contend that greater levels of CO are needed to facilitate the effectiveness of SIF. However, there is a limit to how far sales units can benefit from intra-functional closeness embedded within the concept of SIF: there is a risk of lack of central authority within the sales unit, customer information diversity and novelty may be ignored, and absence of good social relationships with other groups (e.g. with the marketing function) (Oh et al. 2004). To address these challenges associated with SIF, greater CO is needed because CO brings with it exploitative market routines embodying refinement of existing market knowledge and reliance on the “processes of search, collection and assimilation” (Hughes et al. 2007, p. 364). Since highly customer-oriented sales functions tend to focus more on addressing customer demands, stable routines are needed to act promptly on those demands. We therefore argue that flexibility of SIF processes and the stability of CO processes, when combined, will help foster performance.

H3:

The positive effect of SIF on performance is stronger when levels of sales unit CO are higher

CO ensures that all salespeople do “what needs to be done” to achieve collective customer satisfaction goals (Babakus et al. 2009, p. 484). This implies that CO can help amplify role clarity within the sales unit. The effectiveness of the resource coordination processes inherent in SIF are enhanced when salespeople develop customer-related supportive behaviors. This may lead to further clarification of their respective sales team roles as each salesperson would know better what needs to be done for customers in order to maximize revenues (Martin and Bush 2006). Thus, it can be argued that as levels of CO increase, the clarity of salespeople’s roles is maximized such that the negative relationship between SIF and RA should be more pronounced (i.e. more negative):

H4:

When levels of SIF are higher, and when levels of CO increase, levels of salespeople’s role ambiguity are lower.

Methodology and Model Testing

As part of a larger study, data was collected in a UK-wide, multi-industry survey of marketing and sales managers. After obtaining the data, we compared the means of the two groups and our test results indicated no significant differences across these two categories of respondent (marketing vs. sales response); hence responses from both groups of respondents were used for this study with a final response rate of 12.1 %.

Regarding measures used, for capturing SIF we developed new items to capture this construct through extensive interviews with sales managers and insights from the resource flexibility literature (e.g. Sanchez 1997). As an example questionnaire item: “Our sales department is able to shift resources from one sales activity to another if needed” was used. Our CO measures were taken from Homburg and Jensen (2008), we also adapted our RA measures from Rizzo et al. (1970), and our performance measures from Hooley et al. (2005). For completeness and in line with previous research (Hooley et al. 2005), we also examined control paths between CO and market performance and financial performance. In addition, we control for the effect of RA on all three performance variables.

To analyze the data a two-step approach (Anderson and Gerbing 1988) was followed. First, reliability and validity of each construct was evaluated using CFA in LISREL 8.71. Results indicate a good model fit. Composite reliability (CR) and average variance extracted (AVE) are above recommended thresholds of 0.60 and 0.50 (Bagozzi and Yi 1988). Additionally, all constructs exhibited discriminant validity since all AVE scores are greater than the square of the correlations between each pair of constructs (Fornell and Larcker 1981). We then tested the data for common method variance using the marker variable technique (Podsakoff et al. 2003).

Second, we tested our hypotheses by estimating three nested models in hierarchical moderated regression analyses using maximum likelihood estimation. In Model 1, the control variables and SIF were estimated on performance and RA. CO was added in Model 2, while the interaction term was added in Model 3.

Findings and Discussion

Findings indicate that Model 3 (which is the higher-order nested model) returns superior model fit, relative to Model 1 and Model 2: (Chi-square/D.F. = 134/184.40 = 1.376; p < 0.05; RMSEA = 0.041; GFI = 0.92; CFI = 0.98; and NFI = 0.94). As such, we rely on Model 3 to interpret our hypotheses. We find that SIF is positively related to customer (t = 1.75; p < 0.05), financial (t = 1.79; p < 0.05), and market (t = 0.95; p > 0.10) performance although the direct effect on market performance is non-significant, arguing that H1 should be supported. Evidence shows that in addition to the direct positive effect of SIF on performance, the direct effect of SIF on ambiguity is significant (t = −2.75; p < 0.01), providing support for H2a. However, we also introduced an alternative hypothesis to H1 that RA negatively mediates the positive relationship between SIF and performance (i.e. H2b). Moreover, since direct impact of RA on customer (t = −4.22; p < 0.01) and financial (t = −2.20; p < 0.01) performance are significantly negative and Sobel test of the mediation path is significant at 5 % level, our proposition in H2 that the relationship between SIF and performance is through RA is supported, thus rejecting H1. We argue in H3 that the positive effect of SIF on performance is stronger when levels of sales unit CO are higher, and is supported: market (t = 4.06; p < 0.01) and customer (t = 2.99; p < 0.05). Although the impact on financial performance is positive, its impact is non-significant (t = 1.06; p > 0.10). Thus, we conclude that SIF is a more effective predictor of market and customer performance when CO levels within the sales unit are higher. We have also argued in H4 that when levels of SIF are higher, and when levels of CO increase, levels of salespeople’s RA are lower. This is modestly supported (t = −1.48; p < 0.10). The support for H4, implying that CO acts to further minimize the positive effect of SIF on RA such that when CO levels are higher RA is lowered to its minimum levels, making it possible for salespeople to perceive greater role clarity in their job.

Conclusion

By responding to the calls for research (Brown et al. 2005; Jones et al. 2005; Steward et al. 2010; Weitz and Bradford 1999) that reconsiders the salesperson role in today’s dynamic and competitive environments, this research introduces the notion of SIF and examines its relationship with performance and salesperson’s RA under differing levels of CO. Findings indicate that when CO is higher and increasingly pervasive across a sales unit, the positive values of SIF, including its potential to boost market, customer and financial performance, are maximized. The major theoretical implication is that beyond the much advocated benefits of flexibility, sales organizations are able to extract greater benefits from their flexible use of sales resources and processes when CO is encouraged within the sales unit. An additional benefit that flows from CO is that it helps to minimize levels of salesperson RA. Findings from the current study suggest that aside from the direct effects of CO often discussed in the sales literature, CO also plays two important facilitating roles: it helps to maximize economic benefits to sales organizations; and also aids sales organizations to minimize RA within the sales unit.

Our study is not, of course, without limitations. The conceptual model assessed in this study presents a very simple explanation of the importance of SIF in sales operations. Accordingly, future research should look at potential drivers of SIF (e.g. salespeople’s level of interdependence, trust, commitment to one another) and external environment moderators and controls of the SIF-performance relationship.