Sales managers' performance and social capital: the impact of an advice network.
| Autor | Claro, Danny Pimentel |
| Cargo | Report |
INTRODUCTION
A rich body of work from the cognitive sales research tradition demonstrates the relationship between knowledge structure and sales performance (Weitz, Sujan, & Sujan, 1986). For example, research indicates that more effective salespeople have richer and more interrelated knowledge structures concerning their customers (Sujan, Sujan, & Bettman, 1988), rely on more distinctive selling scripts (Leigh & McGraw, 1989; Leong, Bush, & Roedder, 1989; Matsuo & Kasumi, 2002), organize and weigh the category attributes of a sale situation differently (Szymanski & Churchill, 1990), possess more categories in memory (Sharma, Levy, & Kumar, 2000) than less effective salespeople, and create information-search networks to gain access to critical information about customers (Gonzalez, Kapelianis, Walker, & Hutt, 2007).
While providing valuable insights into sales performance, recent trends in theory and practice highlight an important gap in the socio-cognitive sales paradigm. No studies, to our knowledge, have examined the salesperson's (hereafter referred to as the sales manager) network structure and the purpose of maintaining such a network of contacts. There is a diverging view of network structure in the literature. Coleman (1988) argues that having a network of a certain configuration (e.g. highly cohesive wherein all the actors are closely connected) allows for the effective exchange of information. Burt (1992) argues a more strategic perspective, in which actors can gain informational benefits of access, timings and flows when their contacts do not know each other. Both views argue about how the structure of the firm affects members in the network. While Coleman (1988) states that everyone in the network benefits, Burt (1992) states that certain actors will benefit more (in certain ways) than others.
These diverging views invite further work attempting to theoretically and empirically examine whether a sales manager develops a network combining high cohesiveness (i.e. Coleman's view of the network structure) and structural holes (i.e. Burt's view of the network structure) to achieve high sales, or either one separately. There is certainly no consensus as to exactly which network structure impacts sales performance. There is little agreement on the proper use of this centrality position in the network and also in which kind of network it is important to be embedded.
Recent literature stresses the importance of identifying not only the structure of a social network, but also the purpose of forming a network (Cross & Prusak, 2002; Krackhardt, 1998). In this article, we consider two types of network that are based on its purpose: friendship and advice networks. The friendship network refers to a free set of relationships of affective and social bonds. The advice network addresses who goes to whom for work-related or technical advice.
The aim of our article is to investigate the type and structure of a sales manager network and its influence on sales performance. We developed two hypotheses to study the issue of networks and sales performance. Empirical census data was collected from over 500 personnel of an agricultural input retailer with 23 divisions. We mapped the sales managers' networks: their friendship network contains 1,284 ties and the advice network 774 ties. To test our hypotheses, regression models were estimated considering the sample of 101 sales managers.
The concept of the type of network and network structure will be explored in the following two sections. First, we shall take up the friendship and advice purpose of networks and then examine the centrality concept as it refers to the locations of positions within the network structure. In the third section, the hypotheses are developed on the basis of previous literature of network and sales force. The methodology is presented in the fourth section, followed by the results. At the end, we present a discussion and conclusions.
SOCIAL CAPITAL: FRIENDSHIP AND ADVICE NETWORK
Built on Coleman's (1988) discussion of social capital, Burt (2007b) defines such capital by its function. According to these two highly regarded authors, social capital is not a single entity but a variety of different entities having two characteristics in common: they all consist of some aspect of social structure, and they facilitate certain actions of individuals who are within the structure. Like other forms of capital, social capital is productive, enabling the achievement of certain goals that would not be attainable without it. It consists of a social structure formed by persons or corporate actors. Unlike other forms of capital, social capital is inherent to the structure of relations between actors and among actors.
In sociological terms, each actor has control over certain resources (i.e. information) and interests in certain resources and events, and therefore social capital constitutes a particular kind of resource available to an actor. The concept of social capital allows actors to take information and show how it can be combined with other resources to produce different system-level behavior or, in other cases, different outcomes for individuals. Information is essential in any business setting and provides the basis for action in the social structure. Information can be expected to spread across the people in a market, but it will circulate within groups before it circulates between groups. However, acquisition of information is costly. At a minimum, it requires attention, which is always in scarce supply. One means by which information can be acquired is by use of social relations that are maintained for different purposes (Burt, 1980, 1992, 2007a, 2007b; Coleman, 1988).
Network relationships may be assessed as a multidimensional concept. One critical issue is what type of network relations enables sales manager to increase net sales, i.e., sales performance? A network composed of incidental communication links, such as a mechanical How do you do? may not be as rich in relevant information as a network composed of critical advice relationships (Burt, 1980). It is not surprising when you meet a person at an event and find out that you have a mutual friend in common. In the literature, the term small world is often associated with the tendency that people at different geographic locations are connected through a few intermediaries. Granovetter (1973) showed that weak ties are actually the matter of intermediaries. Watts (2004) and Barabasi (2003) showed how close someone is from the point that they might return to their own ego-network.
The cognitive social structure considers two main different types of networks. First, the advice network represents the instrumental, workflow-based network in the organization (Krackhardt, 1990). Basically, it addresses who goes to whom for work-related or technical advice (Cross & Prusak, 2002). Second, the network assessed was the friendship network. This is a free set network. It is not necessarily linked to the routine work done in the organization, but it does capture important affective and social bonds that can affect trust, especially in times of change (Krackhardt & Stern, 1988). After discussing friendship and advice networks and their relation with social capital, in this section we will discuss elements of network structure: closure and structural holes.
NETWORK STRUCTURE: CLOSURE AND STRUCTURAL HOLES
Closure and structural holes have been the foundation for studies on networks (Burt, 1992, 2007b; Coleman, 1988). These two mechanisms do not assume that networks replace information so much as they affect the flow of information and what people can do with it. Both mechanisms begin with the assumption that communication takes time, so prior relationships affect who knows what. Even though the two mechanisms share the same assumption, they are singular.
In closure, it can be said that people are always doing things for each other. Closure depends on two elements: trustworthiness of the social environment--which means that obligations will be repaid--and the actual extent of social norms (Coleman, 1988). Social norms arise as attempts to limit negative external effects or encourage positive ones. In some cases, the norms are internalized through peoples'...
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