Reports

Dynamic Effects of Intrafirm Relational Strategies and Relational Structures on Performance

Danny P. Claro, Carla S. D. Ramos, Gabriel Gonzalez, and Robert W. Palmatier, 2017, 17-120

Interfirm relationship effects change over time, driving individual sales performance, yet existing research often takes a static view of intrafirm relationship effects on individual performance. In this report, the authors introduce a dynamic perspective on the influence of intrafirm relationships on relationship marketers’ sales performance. They integrate results from two studies: Study 1 uses a longitudinal sample (three-year period) of relationship managers (RMs) from a single firm and Study 2 uses a sample of RMs across three industries.

They find that spanning and teaming exert opposing effects on RM performance, moderated by tenure: As tenure increases, the importance of spanning to RM sales performance increases, but the importance of teaming decreases. Specifically,

  • The effects of teaming on sales growth diminish as RMs gain tenure; at the same time, this highly interconnected relational structure can trap RMs as they grow more socialized. For RMs who maintain high levels of teaming, sales growth diminishes by up to 34% as their tenure increases.
  • Spanning is more important for sales growth later in the RM’s tenure, as they take on more complex tasks and develop more novel customer solutions over time. If RMs can maintain high levels of spanning, their sales growth increases up to 29%.
  • Both unilateral and reciprocal relationships drive teaming and spanning.

Marketing implications

These findings provide valuable information about the most effective ways to leverage teams to ensure the necessary resource flows to RMs over time.

Managers can embed new RMs in highly interconnected peer groups; newcomers placed into a highly cohesive peer group can assimilate more quickly into the firm and master their job tasks.

Managers can encourage senior RMs to form connections beyond their immediate peer group and take spanning positions in the firm, for example, by arranging cross-unit collaborations of RMs to explore potential work synergies, different approaches to solving similar customer problems, and ways to share novel customer insights.

Managers should keep newcomers from occupying spanning positions, because they cannot benefit from spanning effects until later in their tenure. Further, when RMs’ territory sales potential is greater or they are located far from headquarters, managers should ensure these RMs are not relying too much on spanning.

To promote reciprocity and future teaming, RMs can devote more time to interactions with specific RMs with whom they have some connection and share common interests. To create unilateral relationships and future spanning, RMs should seek out peers with whom they would not normally interact who may possess information relevant to solving customer problems or developing novel ideas.

Danny P. Claro is Associate Professor of Marketing and Carla S. D. Ramos is Assistant Professor of Marketing, Insper (Institute of Education and Research), Brazil. Gabriel Gonzalez is Assistant Professor, Department of Marketing, Fowler College of Business, San Diego State University. Robert W. Palmatier is Professor of Marketing and John C. Narver Chair in Business Administration, Michael G. Foster School of Business, University of Washington.

 

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