Transcript presentation [1]

Effectiveness of Cross-functional
Integration Mechanisms in Relationships
between Sales and Marketing
Ken Le Meunier-FitzHugh
Graham R. Massey
Nigel F. Piercy
Agenda
Background to the Research
Theoretical Framework
Hypothesis Development
Methodology
Results
Background to Research
The effectiveness of cross-functional working
relationships (CFRs) between sales and marketing is of
considerable academic and practitioner interest.
Where there is sales and marketing conflict the CFR is
likely to be less effective and business performance can
suffer.
Given that the quality of sales and marketing CFRs has
performance implications, improving these CFRs is an
important objective for senior management, and is the
focus of this study.
Background to Research
To improve working practices between functional areas
many organisations ‘employ lateral linkage devises or
structural coordination mechanisms to connect relatively
autonomous functional units’
Some of the factors affecting sales and marketing CFRs
have been considered in academic literature, including
Informal communications
Personal characteristics of sales and marketing
personnel
Trust between managers
Organisation’s incentive systems
Background to Research
To date, however, little work has been done to test the
effects of formal and structural integration mechanisms on
the operation of the sales and marketing interface.
We draw primarily on the theory relating to departmental
“thought worlds.” As Dougherty’s (1992) landmark article
on innovation in large organisations notes,
Departments can evolve into distinct thought worlds with
different funds of knowledge and systems of meaning,
and use different interpretive schemes to make sense of
their working activities.
Background to Research
In this research we examine six integration mechanisms
highlighted in literature:
Cross-functional training
Cross-functional project teams
Cross-functional meetings
The opportunity for job rotation
The location of sales and marketing staff
The structure of the sales and marketing units within
the organisation
Background to Research
We explore the effects of these mechanisms on two
relationship outcome variables
Sales and marketing conflict
Sales and marketing collaboration
Which are proxies for the level of “integration” between
the two departments.
These mediators are in turn, linked to our dependent
variable, Business performance.
Theoretical Framework
Integration Mechanisms
Methodology
The research was carried out using a mail survey of
large organisations (turnover of more than £11.2 million)
operating in B2B markets in the United Kingdom.
A pre-tested, self-administered questionnaire and letter
were addressed to the Managing Director/Chief Executive
(CEO) of each organisation in the sampling frame.
A sample of 1,000 organisations was randomly selected
for inclusion in the survey. A response rate of 22.3% was
achieved, of which 7.7% were not usable for various
reasons.
Methodology
Results
The results for the structure of the sales and marketing
units suggest that these two groups are more likely to be
separate, rather than in the same department. Therefore,
the preconditions exist for thought worlds to be a problem.
Results
Not all of the integration mechanisms are equally
effective.
Those with important effects on collaboration are the use
of cross-functional teams, meetings, the opportunity for job
rotation, and the structure of sales and marketing, all of
which increase sales/marketing collaboration.
Our results confirm collaboration’s strong positive link to
business performance.
One conclusion is that the managerial pursuit of sales
and marketing collaboration is vital because it has wider
performance implications for the organisation rather than
simply interdepartmental effects.
Results
Our results also reinforce the necessity of managing
sales and marketing conflict as this affects collaboration.
We would argue that these integrating mechanisms
should stimulate effective interaction to reduce thought
world differences, and increase sales and marketing
integration.
Integration mechanisms are means by which senior
managers can provide appropriate contexts for effective
sales and marketing interaction, via structural changes,
and formalised initiatives such as decentralisation via
cross-functional meetings and teamwork