Effectiveness of Cross-functional Integration Mechanisms in Relationships between Sales and Marketing

Ken Le Meunier-FitzHughGraham 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 FrameworkIntegration 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