THE INFLUENCE OF SALES MANAGEMENT CONTROL
ON INNOVATIVENESS OF SALES DEPARTMENTS
Makoto Matsuo
This study examines the influence of sales management control (outcome based, behavior based, and knowledge based)
on the innovativeness of sales departments. Using data from Japanese sales departments, the results indicate that sales
departments tend to be innovative when salespeople are evaluated based on their behavior and knowledge rather than on
outcome. Theoretical and managerial implications are discussed.
Sales innovativeness—that is, flexibility and willingness to
accept new ways of problem solving (Evans et al. 2007)—is
indispensable for any sales force in dealing with the increasing
complexity of the environment. Technological innovation,
product complexity, customer demands, and competition
require salespeople to create knowledge-based solutions and
provide them to customers (Bettencourt et al. 2002; Jones et
al. 2005; Verbeke et al. 2008). Despite the importance of innovativeness for corporate growth (Dess and Lumpkin 2005;
Lumpkin and Dess 1996), few empirical studies have examined the antecedents of innovativeness in sales departments.
This study focuses on the role of sales management control
in facilitating innovativeness in sales departments. A sales
management control system—an organization’s set of procedures for monitoring, directing, evaluating, and compensating
its employees (Anderson and Oliver, 1987)—is regarded as
a key management tool because it is intended to influence
salespeople’s attitude, behavior, motivation, and performance
in attaining desired organizational objectives (Anderson and
Oliver 1987; Fang, Evans, and Zou 2005). Although some
studies have investigated the relationship between sales control
systems and innovativeness (e.g., Evans et al. 2007; Oliver and
Anderson 1994), as yet no consensus on the nature of this
relationship has been achieved.
In addition to conventional management control dimensions (outcome-based and behavior-based control), this study
developed and examined the effect of knowledge-based control
on sales innovativeness. Knowledge-based control was introduced because the role of the salesperson has changed from
order taking to partnering with clients and prospects (Weitz
and Bradford 1999; Wotruba 1991). Salespeople increasingly
need to act as knowledge brokers (Sarvary 1999), and their
knowledge structure has a strong effect on their performance
Makoto Matsuo (Ph.D., Lancaster University), Professor of Marketing Management, Graduate School of Business Administration,
Kobe University, Japan, [email protected].
(Sharma, Levy, and Evanschitzky 2007). One of the contributions of this paper is to examine the role of knowledge-based
control in promoting sales innovativeness.
Greater understanding of the effects of different forms of
management control on the outcomes of sales force efforts will
provide a basis for more effective management of salespeople
in today’s hypercompetitive business environment. This
study develops and tests a structural model that incorporates
three dimensions of management control that influence the
innovativeness and ultimately the financial performance of
sales departments.
THEORETICAL BACKGROUND AND
RESEARCH HYPOTHESES
Drawing on literature on sales control and organizational innovativeness, the conceptual framework is proposed in Figure 1.
This framework points out that three types of sales control
are key determinants of sales innovativeness influencing sales
performance. The model’s key constructs and hypothesized
relationships are discussed in the remainder of this section.
Innovativeness and Sales Performance
Innovativeness reflects a firm’s tendency to engage in and
support new ideas, novelty, experimentation, and creative
processes that may result in new products, services, or
technological processes (Lumpkin and Dess 1996, p. 142).
Roehrich (2004) describes firm innovativeness as the “creation of newness.” Inventions and new ideas are a source of
competitive advantage and need to be nurtured, even if their
benefits may be unclear (Dess and Lumpkin 2005). Thus, in
today’s rapidly changing climate, cultivating organizational
innovativeness can be an important avenue in achieving a
competitive advantage.
Deshpandé, Farley, and Webster (1993) surveyed Japanese
firms and found that innovativeness was positively related to
a firm’s financial performance. Hurley and Hult (1998) also
Journal of Personal Selling & Sales Management, vol. XXIX, no. 4 (fall 2009), pp. 321–331.
© 2009 PSE National Educational Foundation. All rights reserved.
ISSN 0885-3134 / 2009 $9.50 + 0.00.
DOI 10.2753/PSS0885-3134290402
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Journal of Personal Selling & Sales Management
Figure 1
Research Model
reported that the innovativeness of divisions in government
agencies promoted the divisions’ capacity to innovate, as well
as the ability of the organizations to adopt or implement new
ideas, processes, or products successfully.
In recent sales research, Evans et al. (2007) conceptualized
sales innovativeness as the extent to which salespeople perceive
an organization as demonstrating flexibility and willingness
to accept new ways of problem solving with regard to the
sales function. They found that sales innovativeness was
positively related to salespeople’s job satisfaction, but it was
not significantly related to salespeople’s performance. These
results were inconsistent with previous research reporting a
positive relationship between innovativeness and performance
(e.g., Damanpour and Evan 1984; Han, Kim, and Srivastava
1998; Selvarajan et al. 2007; Subramanian and Nilakanta
1996). These inconsistent results suggest the need for further
investigation of the innovativeness–performance relationship
in a sales context.
Following Evans et al. (2007) and Scott and Bruce (1994),
this study defines innovativeness of a sales department (sales
innovativeness) as the degree to which salespeople view the
organization as open to change and as willing to accept new
ways of problem solving. Innovativeness may help sales departments to cope with technological and market changes by
“creating newness.”
Innovativeness enhances performance for two reasons. First,
innovations function as coping mechanisms for environmental
change and uncertainty (Damanpour and Evan 1984; Han,
Kim, and Srivastava 1998). A firm’s ability to generate and
adopt ideas that are new to the organization and new to the
market is key to survival in a changing environment. More
concretely, sales innovativeness may encourage salespeople
to come up with new selling methods or proposals that solve
customers’ problems and enhance customers’ satisfaction and
loyalty to the firm.
Second, sales innovativeness may have a psychological effect on salespeople. Strutton, Pelton, and Lumpkin (1993)
reported that salespeople who perceived their department as
innovative tended to trust sales managers. The researchers’
interpretation of this finding was that granting salespeople
the freedom to act more innovatively should increase their
involvement in their work, which in turn leads to better sales
performance. Thus, the following hypothesis is proposed:
Hypothesis 1: Sales innovativeness positively affects sales
performance.
Management Control and Innovativeness
Anderson and Oliver (1987) and Oliver and Anderson (1994)
categorized control systems into outcome control and behavior
control. Outcome-based control systems involve relatively little
monitoring of salespeople by management; rely on straightforward, objective measures of results (e.g., sales); and use
compensation methods that shift risk to the salesperson (i.e.,
commission or bonus). In contrast, a behavior-based control
system emphasizes considerable levels of supervisor monitoring, direction, and intervention in activities and results, and
subjective and more complex methods of evaluating performance based on the salesperson’s job inputs (e.g., aptitude,
product knowledge, activities, and sales strategies).
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Challagalla and Shervani (1996) distinguished two types
of behavioral control—activity control and capability control.
Activity control refers to the specification of the activities a
person is expected to perform on a regular basis, the monitoring of actual behavior, and the administering of rewards and
punishments based on the performance of specified activities.
Capability control emphasizes improving competence through
better skills and abilities. It involves setting goals for the level
of skills and abilities salespeople must possess, monitoring
their skills and abilities, providing guidance for improvement,
and rewarding and punishing individuals based on their level
of skills and abilities.
Past studies have investigated the effect of sales management
control on salespersons’ motivation (Miao, Evans, and Zou
2007), satisfaction with supervisors (Challagalla and Shervani
1996), role stress (Lusch and Jaworski 1991), sales force performance (Piercy, Cravens, and Morgan 1999), and ethical
standards (Ingram, LaForge, and Schwepker 2007). The results of these empirical studies suggest that sales management
control has an impact not only on a salesperson’s thoughts,
feelings, and behaviors, but also on sales force effectiveness.
This study extends the research on management control of
sales departments by adding innovativeness as an outcome.
However, few empirical studies have explored this relationship, and the influence of sales management control on sales
innovativeness remains unclear. Oliver and Anderson (1994)
reported that behavior control managerial styles are perceived
by salespeople as more innovative, and argued that behavior
control permits and encourages salespeople to pursue intrinsic
goals. In contrast, Evans et al. (2007) found that process control, emphasizing sales behaviors, had no significant effect on
innovativeness, although capability control positively affected
innovativeness. These findings may be logically explained.
Because the scale of process controls developed by Evans et
al. (2007) involved items measuring whether established sales
procedures were followed by salespeople, process control may
restrict innovative behavior by strictly prescribing and controlling salespeople’s behavior. On the other hand, capability
control allows individual capabilities to range, leaving room
for salespeople to use their capabilities innovatively.
Baldauf, Cravens, and Piercy (2005) reviewed previous
empirical studies and concluded that a consensus existed that
behavior controls had a positive influence on salespersons’ attitudes, behaviors, and performance, as well as on sales organization effectiveness (sales revenue, market shares, profitability,
customer satisfaction). A behavior-based control system has
several advantages for enhancing sales innovativeness. First,
sales managers are more directly and actively involved with
salespeople and work with them in a behavioral control system
(Piercy, Cravens, and Morgan 1999). In such a system, a sales
manager’s support may help salespeople generate innovative selling approaches. Second, behavioral control (activity
control) improves salespeople’s performance by enhancing
intrinsic motivation (Miao, Evans, and Zou 2007), which is
regarded as a source of innovation (Amabile 1988). Third,
in behavior-based supervisory modes, salespeople may be
expected to spend a greater proportion of their time on planning and other nonselling activities and have a more thorough
knowledge of the customer’s organization (Anderson and
Oliver 1987; Rouzies and Macquin 2003). Thus, the following hypothesis is offered:
Hypothesis 2: Behavior-based control positively affects sales
innovativeness.
This study hypothesizes that outcome-based control has
a negative effect on innovativeness for the following reason.
Because sales volume and profitability are comparatively
short-term indicators of performance and are affected by the
presence of sales volatility (Cravens et al. 1993; Menguc and
Barker 2003), salespeople may think that the attainment or
nonattainment of output goals is beyond their control under
outcome-based control systems (Challagalla and Shervani
1996). Lee et al. (2004) reported that individuals under high
evaluative pressure were less likely to engage in experimental
behavior, which is critical to organizational innovation. Because failures are inevitable in the experimentation process
(Lee et al. 2004), outcome-based control may inhibit experimentation behavior by reducing psychological safety. Thus,
the following hypothesis is proposed:
Hypothesis 3: Outcome-based control negatively affects sales
innovativeness.
In addition to conventional types of sales control systems,
this study examines the effect of knowledge-based control.
Knowledge-based control is defined as the extent to which
salespeople are evaluated and rewarded for generating and
sharing transferable knowledge (e.g., sales proposals) within
a sales force.
The reason the present research focuses on knowledgebased control is that as the economy becomes increasingly knowledge intensive, salespeople are tending to sell
knowledge-based solutions to customers (Bettencourt et al.
2002). Sharma, Levy, and Evanschitzky (2007) reported that
knowledge structure variables (declarative and procedural
knowledge) explained about 50 percent of the variance in
salesperson performance. Knowledge management systems
permit firms to collaborate more effectively; thus the crucial
knowledge and information locked in the heads of salespeople
can be shared across the organization (Shoemaker 2001). In
organizational research, Hansen and Haas (2001) conceptualized the “knowledge market” as an electronic document
dissemination system in an organization, in which suppliers
of electronic documents compete for the limited attention of
users of the documents.
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Knowledge-based control can be conceptualized as a
particular type of process-based control that involves behavior-based (activity-based) and capability-based control.
Knowledge-based control emphasizes the role of transferable
knowledge that salespeople generate (e.g., sales proposals),
whereas behavior control and capability control (Challagalla
and Shervani 1996) focus on salespeople’s activities, skills,
and abilities that are difficult to articulate and share within
a sales force.
The importance of managing transferable knowledge has
been pointed out in previous research. Dong-Gil and Dennis
(2005) reported that the more knowledge management–based
sales force automation (SFA) system documents a sales representative read, the greater were his or her sales as a percentage
of quota. Shoemaker (2001) also argued that the information
or knowledge available to salespeople within a department was
key to achieving and sustaining a competitive advantage.
The rationale behind the knowledge-based control/
innovativeness relationship is that the organizational ability to transfer knowledge effectively among individuals is
critical to a host of organizational processes and outcomes
(Reagans and McEvily 2003). Knowledge sharing may lead
to better team performance by improving decision making
and promoting coordination (Srivastava, Bartol, and Locke
2006). Previous research on knowledge transfer (Dyer and
Nobeoka 2000; Gupta and Govindarajan 2000) pointed out
the importance of a sender’s motivation for sharing knowledge
with others in the organization. Knowledge-based control
systems may promote the generation and acceptance of new
knowledge because they encourage salespeople to generate
selling knowledge, and evaluate salespeople based on their
sharing valuable knowledge with others. Thus, the following
hypothesis is proposed:
Hypothesis 4: Knowledge-based control positively affects
sales innovativeness.
Although knowledge-based control should be distinguished
from behavior-based and capability-based control, the three
types of control can be grouped into process control systems
that focus on sales inputs, including sales proposals, activities, and skills. A summary of all measures used is provided
in Appendix Table A1.
METHODOLOGY
Sample and Data Collection
The population examined in this study consisted of the
sales departments of Japanese companies. A sample of 1,000
companies with headquarters in Tokyo or Osaka was drawn
from companies in the first section of the Tokyo Stock Exchange. A questionnaire entitled “Sales Management Survey,”
with a cover letter explaining the purpose of the survey, was
mailed to the sales directors of these companies. Because it
was difficult to identify the sales manager of each firm’s main
product or service, the cover letter asked the sales director to
pass on the questionnaire to the manager of the sales department dealing with the firm’s main product or service. Four
weeks later, a postcard reminder was sent to firms that had
not responded. A total of 1,000 questionnaires were mailed;
213 were returned. A summary of the research findings was
offered as an incentive to respondents. To ensure the validity
of the answers, answers from nonmanagers were deleted because they may not be knowledgeable about the department.
In total, 199 questionnaires were considered usable after
removing missing answers (final response rate: 19.9 percent).
An analysis of early and late respondents on a number of key
characteristics revealed no significant differences at the 0.05
level. This indicates that nonresponse bias was not likely a
major problem (Armstrong and Overton 1977). The sample
was composed of 72.3 percent manufacturers and 27.7 percent
nonmanufacturers; 85.5 percent of respondents answered
that their main customers were corporations rather than end
users. The average number of salespeople in a department
was 70.8. Regarding the number of employees, 35.7 percent
of the sample employed 999 people or less; 47.4 percent had
between 1,000 and 4,999 employees; and 17.0 percent had
more than 5,000 employees.
Measures
Multiple-item scales were developed based on items previously
proposed in survey research studies (Daft and Macintosh
1981; Oliver and Anderson 1994; Scott and Bruce 1994).
The scale items were translated from English to Japanese and
checked by a bilingual marketing researcher unaware of the
purpose of the study.
Management Control
The scale items of behavior-based and outcome-based management control were developed using parts of Oliver and
Anderson’s (1994) sales management scale (“behavior-based
control” and “outcome-based control”) and newly created
items. Newly created items were introduced because the
original scale on outcome-control (four items focusing on the
absence of a bottom-line orientation) developed by Oliver and
Anderson (1994) did not seem to clearly measure the extent of
an outcome-based control system. The items on knowledgebased control were created specifically for this study. Respondents were asked about their perceptions of how salespeople
were monitored, directed, evaluated, and compensated in a
sales department using a seven-point Likert scale (1 = strongly
disagree, 7 = strongly agree).
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Because some new items were used, the scale of management control was examined following the procedures
recommended in Churchill’s (1979) paradigm. The factor
analysis (principal factors method with oblique rotation)
was conducted with seven items from Oliver and Anderson’s
(1994) behavior-control/outcome-control index scale and
six newly developed items. Items for which the item-to-total
correlations were low and the removal of which increased
the alpha coefficient were deleted. This procedure resulted in
three factors: four items for behavior-based control (α = 0.74),
three items for outcome-based control (α = 0.80), and three
items for knowledge-based control (α = 0.72). All four items
in behavior-based control and one item in outcome-based
control were from Oliver and Anderson’s (1994) scale. The
scores for each item were used as observable variables for the
three types of management control.
Sales Innovativeness
To measure sales innovativeness, the scale of the climate for
innovation developed by Scott and Bruce (1994) was used.
The original measure contained two subscales—support for
innovation and resource supply. The support for innovation
subscale was adopted in this study because it reflects general
innovativeness in an organization. The 16 items were subjected
to an exploratory factor analysis for two reasons. First, the
subjects in the original study were engineers, scientists, and
technicians employed in a large research and development
(R&D) facility of a major U.S. industrial corporation; as a
result, the scale should be reexamined in the sales context.
Second, it was necessary to make the scale more compact to
analyze data using structural equation modeling (SEM). A
factor analysis (principal factors method with oblique rotation) resulted in a three-factor solution. Factor 1 (six items)
was named “tolerance of diversity”; it measures the degree to
which members are expected to think and deal with problems
in different ways. Factor 2 (six items) was named “encouragement of innovation”; it measures the degree to which members
are encouraged to be creative and open to change. Factor 3
(four items) was named “breaking the status quo”; it measures
the degree to which members do not stick to previous ways
of working. Among the three factors, encouragement of innovation was adopted as a proxy for the innovativeness scale
because the factor best reflects the meaning of the original
dimension of “support for innovation” developed by Scott
and Bruce (1994). The other two factors were eliminated
because the alpha coefficient of “breaking the status quo”
was below 0.65, and “tolerance of diversity” seemed to be
extracted because it consisted of all reverse-scored items.
Cronbach’s alpha for “encouragement of innovation” was 0.82.
Responses to each item assessed innovativeness using a sevenpoint Likert scale (1 = strongly disagree, 7 = strongly agree).
The scores for each item were used as observable variables for
sales innovativeness.
Sales Performance
Sales performance was measured with three items—“overall
performance of the department,” “profitability (return on
investment) of the department,” and “sales growth rate of
the department” relative to competitors in the last three
years. Performance in the last three years may show a sales
department’s capability to gain competitive advantage in the
market. Responses to each item measured performance on
a seven-point scale (1 = very low, 7 = very high). The scales
were developed based on Deshpandé, Farley, and Webster’s
(1993) work that asked marketing executives to rate firms’
performance in terms of profitability, size, market share, and
growth rate in comparison with their competitors. Cronbach’s
alpha was 0.83. The scores for each item were used as observable variables for sales performance.
Although this study’s adoption of only subjective measures
of performance instead of objective measures poses some
limitation, some researchers have reported that objective
measures are highly related to subjective measures. Wall et al.
(2004) have shown the validity of subjective (self-reported)
measures of company performance by comparing the use of
objective and subjective measures in three separate samples.
Similarly, Barling, Kelloway, and Cheung (1996) and Jaworski
and Kohli (1991) reported a high correlation between output
performance and behavioral performance. Thus, using subjective measures alone may not have a significant biasing effect
on the results.
Validation of the Measures
The internal consistency of the constructs was evaluated by the
alpha coefficient. Table 1 shows the correlations, descriptive
statistics (means, standard deviations), and reliability estimates. All scales met the recommended reliability coefficient
of 0.7 (Nunnally 1978).
To evaluate the convergent validity of the model constructs,
a confirmatory factor analysis (CFA) with five latent constructs
(behavior-based control, outcome-based control, knowledgebased control, sales innovativeness, sales performance) and a
total of 19 measures was conducted. The results show that
all items significantly loaded on the respective constructs
(p < 0.001), and the goodness-of-fit statistics for the model
were as follows: χ2 = 252.05, degrees of freedom (df ) = 143,
comparative fit index (CFI) = 0.92, root mean square error
of approximation (RMSEA) = 0.06, and Tucker–Lewis index
(TLI) = 0.91. That all the items significantly loaded on the
assigned constructs and that the fit indices were relatively good
provides evidence of convergent validity.
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Table 1
Descriptive Statistics and Correlations
Variable
1
2
3
4
5
Behavior-Based Control
Outcome-Based Control
Knowledge-Based Control
Innovativeness
Sales Performance
Number of
Items
Mean
Standard
Deviation
1
2
3
4
4
3
3
6
3
5.72
4.40
4.74
5.12
4.39
0.80
1.39
1.03
0.94
1.39
(0.74)
0.22**
0.42***
0.50***
0.15*
(0.80)
0.22**
0.19**
0.11
(0.72)
0.54***
0.12
(0.83)
0.26***
(0.83)
Notes: n = 199. Mean scores are used for all multi-item scales. All are seven-point scales. Coefficient alpha is presented along the diagonal. * p < 0.05;
** p < 0.01; *** p < 0.001.
Table 2
Structural Model Results
Structural Paths
Estimate1
t-value
Innovativeness → Sales performance
Behavior-based control → Innovativeness
Outcome-based control → Innovativeness
Knowledge-based control → Innovativeness
0.25
0.33
0.03
0.55
3.06**
4.72***
0.53
6.39***
Hypothesis
H1
H2
H3
H4
Notes: 1 Value represents standardized estimate. ** p < 0.01; *** p < 0.001.
As the knowledge-based control scale was developed for this
study, its criterion validity (correlation between scale items
and known standard measures) was evaluated by correlating
knowledge-based control with “information sharing” (within
a sales department), developed by Chalos and Poon (2000)
based on Denison, Hart, and Kahn’s (1996) work. The correlation coefficient was 0.54 (p < 0.001), which indicates that
salespeople tend to share their information within a sales department in which knowledge-based control is adopted. This
provides evidence of the criterion validity of the knowledgebased control scale.
RESULTS
Descriptive statistics and intercorrelations among variables are
presented in Table 1. SEM was conducted to test the proposed
research model, because SEM provides a simultaneous estimation of the model parameter estimates and overall model fit
estimates. The model fit measures indicated acceptable agreement with the covariance in the data (χ2 = 263.40, df = 148;
CFI = 0.92; RMSEA = 0.06; TLI = 0.91).
The standardized path coefficients for the model are
presented in Table 2. Sales innovativeness positively related
to performance (β = 0.25, p < 0.01). This is consistent with
H1. Both behavior-based control and knowledge-based control were positively related to sales innovativeness (β = 0.33,
p < 0.001; β = 0.55, p < 0.001, respectively), indicating that
a sales department controlled by salespeople’s behavior and
knowledge tends to be innovative. This is consistent with
H2 and H4. Outcome-based control was apparently not significantly related to sales innovativeness (β = 0.03, n.s. [not
significant]), which does not support H3. The explained variances for sales performance and innovativeness were R2 = 0.07
and R2 = 0.42, respectively.
DISCUSSION
Theoretical Implications
The primary purpose of this study was to investigate what
kinds of sales management control promotes innovativeness of
sales departments. Despite a great deal of research on management control, a limited number of studies have examined the
relationship between management control and innovativeness.
This study provides some theoretical implications concerning
the mechanisms of innovative sales force and the development
of constructive competition among salespeople.
First, the results suggest that sales innovativeness is enhanced
by behavior-based and knowledge-based control, but not by
outcome-based control. This indicates that sales departments
can be innovative when salespeople are evaluated and rewarded
for their behavior and knowledge, rather than for their sales
performance. The positive relationship between behavior-based
control and sales innovativeness corresponds with the result
Fall 2009 327
of Oliver and Anderson (1994), who reported that behavior
control managerial styles were perceived by salespeople as being
more innovative. Behavior-based control systems may require
salespeople to think over their selling activities and come up
with new ways of problem solving for customers. The systems
also allow salespeople and managers to spend their time on
planning and gathering information regarding customers (Anderson and Oliver 1987; Rouzies and Macquin 2003).
Second, the most important finding of this study is that
knowledge-based control facilitated sales innovativeness.
Knowledge-based control is different from capability-based
control (Challagalla and Shervani 1996) in its focus. The former encourages salespeople to generate transferable knowledge,
such as sales proposals, and share them with others, whereas
the latter emphasizes improvement in salespersons’ skills and
abilities, which are difficult to transfer to others. Sales innovativeness is enhanced through knowledge-based control because
it may promote disseminating and sharing information and
knowledge on useful selling activities. It can be interpreted
that knowledge-based control facilitates social learning in a
sales department by disseminating best practices. Given that
most innovations result from borrowing rather than from true
invention (Cohen and Levinthal 1990; March and Simon
1958), dissemination of selling information and knowledge
should stimulate salespeople to generate new sales solutions
for customers by combining a variety of selling ideas.
This can be inferred from the intrinsic motivation principle
of creativity (Amabile 1988). That is, behavior-based control
and knowledge-based control may promote a salesperson’s
intrinsic motivation, a key factor for creative activities.
Amabile argued that people can be more creative when they
are motivated by interest, fun, satisfaction, and the challenge
of the job versus when they are motivated by external pressure.
Behavior-based and knowledge-based control systems may
make members feel that their jobs are interesting and challenging. Miao, Evans, and Zou (2007) reported that activity
control affects challenge seeking (the cognitive dimension of
intrinsic motivation) and capability control affects task enjoyment (the affective dimension of intrinsic motivation).
Third, it is possible that behavior-based control and knowledge-based control complement one another. Behavior-based
control may prevent free riders who obtain others’ knowledge
without providing their own knowledge. Dyer and Nobeoka
(2000) pointed out that it was important to prevent free riding
to promote knowledge sharing. Moreover, behavior-based control restrains process conflicts or controversies over duty and
resource delegation (Jehn and Mannix 2001) by clarifying the
behavioral standard for salespeople and lowering role ambiguity. Oliver and Anderson (1994) reported that a behavior-based
control system lowers role conflict. Salespeople working in a
sales force with behavior-based systems can understand what
kind of selling knowledge should be generated.
Fourth, this study indicates that process-based control,
which can be distinguished from output-based control, may
consist of three types of control—behavior (or activity)-based
control, capability-based control, and knowledge-based
control. Whereas Challagalla and Shervani (1996) divided
behavioral control into activity control and capability control,
the present research adds knowledge control to this categorization. These three types of control systems focus on different
aspects of salespeople’s inputs—selling activities, selling skills,
and selling codified knowledge. This indicates that process
control plays an important role in developing innovative and
learning-oriented sales departments.
Finally, outcome-based control has apparently no significant
relationship with sales innovativeness; this finding is inconsistent with H3, which predicted a negative relationship between
these factors. This is also contrary to the results of Evans et al.
(2007), who found a positive relationship between outcome
control and sales innovativeness. Their interpretation of their
results was that effective outcome controls were found most
often in organizational settings where firms assumed responsibility for providing adequate sales support and innovation.
Although further research is needed to investigate the effect
of outcome-based control on sales innovativeness, a possible
explanation for the results of this study is that the negative side
of outcome-based control (e.g., lowering intrinsic motivation)
may offset its positive side (e.g., increasing awareness of the
gap between goal and performance).
Managerial Implications
The present research has some managerial implications for
developing a high-performing sales force. First, innovativeness
can be a key driver in establishing a competitive advantage
not only for R&D departments but also for the sales department in rapidly changing environments. It may be possible
for sales management to enhance performance by facilitating
a department’s flexibility and willingness to accept new ways
of problem solving with regard to the sales function.
Second, sales managers desiring to facilitate sales innovativeness need to design sales control systems by combining
knowledge-based with behavior-based control. Special attention should be paid to the fact that knowledge-based control
has stronger effects than does behavior-based control in
facilitating innovativeness of sales departments. This implies
that sales managers have to develop procedures for monitoring, directing, evaluating, and compensating salespeople who
generate and share valuable selling methods or approaches
with others.
Third, in developing a process-based control system, sales
managers need to recognize the difference among three types of
process control—activity-, capability-, and knowledge-based
control. Activity control focuses on selling activities, whereas
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capability control emphasizes selling skills. Knowledge control
deals with codified and transferable knowledge. These results
suggest that outcome-based control systems are not so harmful to sales innovativeness. The combination of these control
systems may depend on the nature of the business environment
and the firm’s strategy.
Finally, knowledge management systems may be necessary
to manage codified knowledge (e.g., selling proposals) that
can be shared within a department. It is important for sales
managers to manage information and knowledge on who
contributes to the sales department by selling know-how.
Knowledge management–based SFA (Dong-Gil and Dennis
2005) may play an important role in establishing a knowledgebased sales control system.
Limitations and Future Research
Suggestions
The findings of this study are subject to several limitations
that suggest fruitful directions for future research. First,
this study focuses on Japanese sales departments engaging
in selling activities, primarily to corporate customers. It is
important to consider the influence of national culture and
firm characteristics of the samples before generalizing these
findings. For example, employees in Japanese firms tend to
be motivated by intrinsic incentives such as reputation in
the workplace. Moreover, 72.3 percent of the sample firms
were manufacturers. Future research should investigate
sales departments that deal with services, collect samples
in other countries, and compare the results with those of
this study.
Second, this study relied on a single source to measure
the constructs. To cope with this problem, questionnaires
were sent to sales departments dealing with main products
or services asking middle managers with a grasp of the situation in their departments to answer the questionnaires, and
answers from nonmanagers were deleted. In future research,
it is advisable to obtain multiple answers per department.
Third, as the concept and scale of knowledge-based
control were developed for this study, more work is needed
to validate the scale. In particular, the relationship between
knowledge-based control and capability control conceptualized by Challagalla and Shervani (1996) should be examined.
Previous literature on the knowledge-based theory of the firm
(DeCarolis and Deeds 1999; Grant 1996; Zander and Kogut
1995) may provide useful insights for developing a more
rigorous scale of knowledge-based control. The economy is
becoming increasingly knowledge intensive (Bettencourt et
al. 2002), even as empirical studies on knowledge management in the sales force are limited in number (e.g., Shoemaker 2001). It is important to investigate how knowledge
is acquired, shared, and created in a sales force.
Finally, the function of outcome control in enhancing
sales innovativeness remains unclear. Although this study
indicates that outcome control had no significant effect on
sales innovativeness, past empirical studies have reported
inconsistent results (Challagalla and Shervani 1996; Miao,
Evans, and Zou 2007). More work investigating the effect
of outcome control on sales innovativeness is needed.
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Appendix Table A1
Scale Items
Scale Items
Behavior-Based Control (1 = strongly disagree, 7 = strongly agree)
Supervisors stay in close touch with their subordinates.2
Supervisors make sure everyone knows what to do and how to do it.
Supervisors rarely ask subordinates for information on how they're doing. (R)3
When management rates our performance, they take many things into consideration.
Outcome-Based Control (1 = strongly disagree, 7 = strongly agree)
Sales managers compare the sales performance among salespeople.2
Management decides who's good by looking strictly at each salesperson’s bottom line.
A salesperson's reputation in a department is determined by his or her sales performance
ranking as compared to other salespeople.
Knowledge-Based Control (1 = strongly disagree, 7 = strongly agree)
Our manager positively evaluates salespeople who share their knowledge with others.2
We are encouraged to generate sales proposals that can be shared in a department.
A salesperson's reputation in a department is determined by the quality of his or her
sales proposals.
Sales Performance (1 = very low, 7 = very high)
Profitability (return on investment) of the department.2
Overall performance of the department.
Sales growth rate of the department.
Sales Innovativeness (1 = strongly disagree, 7 = strongly agree)
Our ability to function creatively is respected by the leadership.2
Creativity is encouraged here.
Around here, people are allowed to try to solve the same problems in different ways.
This organization can be described as flexible and continually adapting to change.
This organization is open and responsive to change.
The reward system here encourages innovation.
Alpha
Estimate1
t-value
0.92
0.81
0.47
0.51
—
11.42***
6.68***
7.17***
0.80
0.66
0.83
—
8.61***
9.27***
0.81
0.73
0.53
—
8.13***
6.53***
0.81
0.88
0.68
—
11.21***
9.84***
0.84
0.82
0.61
0.55
0.60
0.50
—
12.82***
8.87***
7.85***
8.67***
7.10***
0.74
0.80
0.72
0.83
0.83
Notes: 1 Value represents standardized estimate. 2 The corresponding parameter is fixed to a value of 1.00 to set the scale of measurement. 3 Item was
reverse coded. *** p < 0.001.