Sales manager encouragement behavior in value-centered business models

Abstract

Purpose Seeing past research, sales managers’ encouragement of their salespeople, tailored to the demands of value-creating sales, should constitute a key success factor for implementing value-centered business models. But prior research is largely silent on sales managers’ encouragement behavior for adopting value-centered business models regarding specific sales manager encouragement behaviors. Hence, this paper aims to examine the moderating effect of in-role and extra-role encouragement by sales managers in value-centered business models on financial firm performance. Design/methodology/approach The research model was tested empirically on a sample of key informants from 209 firms working in (sales) management positions using regression analysis. Findings The findings suggest that in-role encouragement behavior is more effective to achieve financial firm performance in value-centered business models. Sales managers should use in-role encouragement to provide their salespeople with a clear structure as a framework for their tasks and work environment and a strategic alignment along the sales organization. Research limitations/implications First, while the study included a variety of industries, it only covered countries from the Dach region (Germany, Austria, and Switzerland), which could limit the generalizability of the findings. To validate the results in additional countries, future research could replicate the research in a cross-country study to test whether the effects differ between countries. Second, the study surveys one key informant per firm on a firm-level leadership tendency. Although leadership culture may promote similar leadership styles or behaviors within one firm, individual leadership behaviors may still vary. Future research should validate the findings using individual sales managers data. Practical implications Firm managers must encourage sales managers in value-centered business models to engage in in-role encouragement and avoid extra-role encouragement and thus intensify their micromanagement. Micromanaging the salesforce comprises extensive guidance regarding their expectations and execution toward their salespeople’s work-related tasks and their way of thinking. Furthermore, firms must ask themselves whether their sales managers are capable of micromanaging at all and whether they have the capacity to do so. If not, they must create the appropriate capacities for this. Supplementary, firms should offer regular training for managers on the application of in-role encouragement. Originality/value To the best of the authors’ knowledge, this is the first study combining the two rather separately considered research streams of encouragement behavior and value-centered business models regarding the effects on firm performance outcomes.