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Does Collaboration Between Sales and Marketing AffectBusiness Performance?Ken Le Meunier-FitzHugh & Nigel F. PiercyPublished online: 23 Sep 2013.
To cite this article: Ken Le Meunier-FitzHugh & Nigel F. Piercy (2007) Does Collaboration Between Sales and Marketing AffectBusiness Performance?, Journal of Personal Selling & Sales Management, 27:3, 207-220
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Journal of Personal Selling & Sales Management, vol. XXVII, no. 3 (summer 2007), pp. 207–220.© 2007 PSE National Educational Foundation. All rights reserved.
ISSN 0885-3134 / 2007 $9.50 + 0.00. DOI 10.2753/PSS0885-3134270301
Research considering the interface between sales and market-ing has proved to be of growing academic and managerial interest, including a keynote discussion by Kotler, Rackham, and Krishnaswamy in 2006 entitled “Ending the War Between Sales & Marketing.” This review underlines the concern that sales and marketing do not always act collaboratively to the benefit of the organization. The aim of our study is to estab-lish whether higher levels of collaboration between sales and marketing are associated with enhanced business performance and to identify factors that are managerially relevant to this interface. This research adds to the conceptual contributions by Dewsnap and Jobber (2000) and Rouzies et al. (2005) by modeling the identified antecedents to collaboration be-tween sales and marketing, and the consequence to business performance.
Kotler, Rackham, and Krishnaswamy recommend, “Every company can and should improve the relationship between Sales and Marketing” (2006, p. 78). There is also a long-stand-ing contention that sales and marketing activities should be coordinated because their functions are interrelated (Munn 1998): marketing relies on salespeople to deliver the marketing message externally and to collect valuable customer informa-tion (Colletti and Chonko 1997). In addition, Yandle and Blythe (2000) indicate that sales functions are frequently dependent on marketing activities to provide a consistent supply of prospective customers through their promotional
activities. Both sales and marketing have the ultimate goal of selling products and services. Logically, sales and marketing functions should be working symbiotically to the benefit of the organization:
You’d expect sales and marketing to be aligned in any successful organization—yet in fact the opposite is often true. The reality is that sales and marketing need to synch up or sink. The two need to be integrated in order to build customer relationships, enhance brand, capitalize on leads, improve market share and to boost revenue. (Athens 2001, p. 1)
Prior studies considering the cross-functional relationship between sales and marketing suggest that this interface ex-hibits many negative characteristics (Cespedes 1993; Dawes and Massey 2005; Dewsnap and Jobber 2000, 2002; Kotler, Rackham, and Krishnaswamy 2006; Piercy 2006; Rouzies et al. 2005; Strahle, Spiro, and Acito 1996). For example, Lorge noted, “Historically there has been tension between sales and marketing, bred by physical and philosophical separation and by poor communication” (1999, p. 27). In addition, there is often poor coordination between sales and marketing, par-ticularly in planning and goal setting (Colletti and Chonko 1997; Kotler, Rackham, and Krishnaswamy 2006; Strahle, Spiro, and Acito 1996). Recent studies have identified several factors that contribute to sales and marketing collaboration, although these have not been tested and provided only lim-ited evidence regarding the consequences of the relationship. It appears timely to examine the proposition that improving collaboration between sales and marketing benefits the orga-nization in terms of business performance.
CONCEPTUAL DEVELOPMENT
Our conceptualization identifies five antecedents to collabo-ration between sales and marketing and proposes a positive
DOES COLLABORATION BETWEEN SALES AND MARKETING AFFECT BUSINESS PERFORMANCE?
Ken Le Meunier-FitzHugh and Nigel F. Piercy
Prior research proposes that greater collaboration between sales and marketing has benefits to the organization through improved business performance. This study examines the importance of this proposition and finds that there is a direct and positive relationship between these two constructs. In addition, this study identifies five antecedents to improving collaboration between sales and marketing and outlines the management implications of the study. The findings indicate that a positive senior management attitude toward collaboration between sales and marketing, the reduction of inter-departmental conflict, the improvement of communications, the establishment of organizational learning, and effective market intelligence systems are important antecedents to effective collaboration between sales and marketing.
Ken Le Meunier-FitzHugh (Ph.D., Warwick University), Lec-turer in Management, School of Management and Organizational Psychology, Birkbeck University of London, UK, [email protected].
Nigel F. Piercy (D.Litt., Heriot-Watt University), Professor in Marketing and Strategic Management, Warwick Business School, University of Warwick, UK, [email protected].
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relationship between sales and marketing collaboration and business performance. Blake, Shepard, and Mouton note that integration of two groups is facilitated if the groups have “a vested interest in the outcome,” and they “are convinced they can develop final positions that represent the convictions of both” (1968, p. 90). Figure 1 indicates the proposed ante-cedents to collaboration between sales and marketing and business performance. Interdepartmental conflict between the sales and marketing functions is based on poorly aligned goals and differing backgrounds and philosophies (Dawes and Massey 2005; Piercy 2006). Further, some sales and marketing departments experience role ambiguity, and there may be a lack of understanding of each other’s roles (Cespedes 1993; Dawes and Massey 2005; Kotler, Rackham, and Krishnas-wamy 2006). Therefore, it is proposed that interdepartmental conflict will have a negative impact on collaboration between sales and marketing. Cross-functional learning can lead to improved collaboration between groups because informa-tion may be transferred through informal networks (Mayers and Wilemon 1989). Accordingly, organizational learning is included in the model as an antecedent to collaboration.
Market intelligence may be a process upon which both sales and marketing can focus to achieve joint success, and it
is proposed to support collaboration. Improved collaboration between sales and marketing may also be founded on the level and quality of communications between the two groups. The attitude of senior managers toward collaboration between sales and marketing is a key construct within the framework, especially as collaboration is not just based on close working relationships but must be supported by aligned goals and integrative processes. Finally, where senior managers succeed in improving cross-functional activities within the marketing function, organizations experience superior profit levels (Kot-ler, Rackham, and Krishnaswamy 2006; Krohmer, Homburg, and Workman 2002), leading to the proposal that higher levels of sales/marketing collaboration will be associated with higher levels of business performance.
Collaboration and Business Performance
It should be noted that this study focuses on the consequences of collaboration between sales and marketing, rather than evaluating the related, but conceptually distinct, concept of integration. Kahn (1996) suggests that there are two distinct processes to integration—those related to interaction and those concerned with collaboration. Interaction is defined as physical
Figure 1 Collaboration Between Sales and Marketing and Business Performance
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activities, such as meetings, e-mails, and telephone calls, and cross-functional training, whereas collaboration comprises intangible elements, such as mutual understanding, common vision, and information sharing/building. Some studies focus on developing interactive behaviors and emphasize the use of formal communication between departments, representing the structural nature of cross-departmental activity (including routine meetings and the flow of standard documentation) (Griffin and Hauser 1996; Ruekert and Walker 1987). How-ever, successful organizations are moving away from emphasis on formal control systems to adopting processes that are more flexible and promote collaboration. “Collaboration represents the unstructured, affective nature of interdepartmental rela-tionships” (Kahn 1996, p. 139).
According to Kotler, Rackham, and Krishnaswamy (2006) and Shapiro (2002), sales and marketing have necessarily dif-ferent activities performed by different people appropriate to each function. However, sales and marketing are often required to interact repeatedly. To some extent, they rely on each other to be able to carry out their tasks effectively, and they need to collaborate (Dewsnap and Jobber 2000; Lorge 1999; Rouzies et al. 2005). Nonetheless, there is a tension between the need to retain the distinctiveness of sales and marketing functions (because they perform differentiated tasks) and simultaneously facilitate a collaborative stance (to coordinate efforts around organizational goals). Unsurprisingly, there have been several calls for additional research concerning this organizational interface (Dewsnap and Jobber 2000; Piercy 2006; Rouzies et al. 2005; Shapiro 2002; Workman, Homburg, and Gruner 1998). Indeed, Shapiro stated that “nowhere is the need to work together more important than in the twin customer-facing functions of marketing and sales” (2002), and noted that this should improve operating performance and financial performance.
Piercy (2006) stated that with the growth of competition in many markets, there is an urgent need to develop the cross-functional collaboration of sales and marketing to improve per-formance. Previous research identifies a positive link between internal collaboration and improved business performance (e.g., Child 1985; Griffin and Hauser 1996; Kotler, Rackham, and Krishnaswamy 2006; Morgan and Turnell 2003; Narver and Slater 1990; Shapiro 2002; Tjosvold 1988). Research suggests that coordinating activities across departments can provide superior value to the customer (e.g., Child 1985; Kohli and Jaworski 1990; McGee and Spiro 1988; Narver and Slater 1990), and many organizations now believe that enhanced cooperation leads to business success and are adopt-ing relevant managerial initiatives (Griffin and Hauser 1996; Krohmer, Homburg, and Workman 2002; Shapiro 2002). For example, Tjosvold found that collaboration between two groups led to “improved productivity, enhanced competence and increased confidence in work relationships. Ineffective
interaction resulted in dissatisfied customers and lost business” (1988, p. 287). Similarly, Corstjens and Corstjens (1999) indicate that a lack of cooperation between sales and mar-keting has the potential to damage the overall success of the organization. There is some consensus that poor collaboration between sales and marketing may have a detrimental effect on business performance, whereas effective collaboration should improve business performance. Critically, the establishment of appropriate levels of interaction and collaboration across functions promotes opportunities for greater performance success (e.g., Kotler, Rackham, and Krishnaswamy 2006; Morgan and Turnell 2003; Narver and Slater 1990). On the basis of this support, we hypothesize:
Hypothesis 1: Collaboration between sales and marketing functions is positively associated with business perfor-mance.
Interdepartmental Conflict
We have defined interdepartmental conflict as working at cross-purposes, having incompatible goals, being obstructive, and not appreciating each other’s roles. Prior research has found evidence of marked interdepartmental conflict between sales and marketing (Dawes and Massey 2005; Dewsnap and Jobber 2002; Kotler, Rackham, and Krishnaswamy 2006; Ruekert and Walker 1987), which is obstructing the development of a collaborative relationship. Yandle and Blythe describe conflict as “a breakdown or disruption in normal activities in such a way that the individuals or groups concerned experience difficulty working together” (2000, p. 14). There are many reasons cited for the lack of collaboration between sales and marketing, including that they have very different philosophies and that individuals often have different backgrounds (e.g., education and experience), which may also be aggravated by poor communications (Dawes and Massey 2005; Griffin and Hauser 1996; Lorge 1999; Piercy 2006; Ruekert and Walker 1987) and the need to work interdependently (Dewsnap and Jobber 2000; Yandle and Blythe 2000).
Research into team identification indicates that the value and emotional attachment that group members assign to their “team” encourages them either to interact freely or to disengage from interaction with other groups (Bergami and Bagozzi 2000). Sales and marketing appear to have some cul-tural resistance to working together (e.g., Dawes and Massey 2005; Dewsnap and Jobber 2002; Yandle and Blythe 2000), created by the acquisition of specialized knowledge and skills that are linked with functional identities (Van der Vegt and Bunderson 2005). Oh, Labianca, and Chung noted, “Groups create boundaries that are both cognitive and real, that are meaningful to the members, and that affect subsequent identification and behaviors” (2006, p. 578). Sales and mar-keting have a history of poor cooperation. Frequently, sales
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and marketing have developed mutual negative stereotyping, distrust, and noncooperation based on the strength of their group identities and goal conflict (Dewsnap and Jobber 2002). Even in well-coordinated organizations, poor relationships between sales and marketing may create interdepartmental conflict that will be detrimental to establishing collaboration; therefore, our hypothesis is:
Hypothesis 2: Interdepartmental conflict between sales and marketing functions will be negatively associated with the level of collaboration between sales and marketing.
Organizational Learning
Organizational learning refers to both process and structure, and facilitates the development of new ideas that have the potential to change behavior (Hult, Ketchen, and Slater 2002). Importantly, it has been noted that “Effective learn-ing requires integrating concepts, knowledge and experience from multiple disciplines. Everyone in the organization is a potential contributor to learning” (Cravens 1998, p. 200). Organizational learning encourages groups to achieve orga-nizational and group goals through positive interactions and information exchanges across departments (Vera and Crossan 2004). The rationale is that organizational learning will help to align paradigms, share good practice, and allow flexibility of response to the marketplace. Van der Vegt and Bunderson (2005) noted that multidisciplinary teams that bring together representatives from diverse areas are more likely to be suc-cessful if they can create a sense of shared team identification, as their decisions will be based on a range of perspectives and knowledge. Part of learning is sharing knowledge that pro-motes successful collaboration. Inner environments influence learning processes, and some are more conducive to learning than others (Vera and Crossan 2004). The proposition is that sales and marketing need to develop these integrating and sharing behaviors. Therefore, it is hypothesized that:
Hypothesis 3: A commitment to organizational learning will be positively associated with the level of collaboration between sales and marketing.
Market Intelligence
Loermans indicated that it is necessary to build a corporate architecture to “facilitate learning at the organizational level to create knowledge sharing and dissemination mechanisms across the organization” (2002, p. 290). It is proposed that gathering, analysis, and dissemination (sharing) of market intelligence provides a method of improving organizational learning between sales and marketing. Vera and Crossan stated, “Researchers have described organizational learning systems and mechanisms as formal, information, cultural,
structural, or procedural arrangements that allow organizations to systematically collect, analyse, store, disseminate, and use information relevant to their performance” (2004, p. 232). Improving market intelligence is beneficial to both marketing and sales, and they should therefore be motivated to develop this area together.
It is suggested that learning begins at the individual level and moves to the group through the individual interpreting and integrating his or her knowledge into the group and, finally, is transferred to the organization through institutionalization (Crossan, Lane, and White 1999). Participating in the joint generation of market information will provide a process and structure whereby sales and marketing can integrate knowledge into the group and develop institutionalized learning through sharing their jointly acquired knowledge. Slater and Narver (1995) note that the facilitation of organizational learning should include information dissemination and the effective sharing of the interpretation of that information. However, many organizations fail to develop systems to analyze competitor intelligence collected by the sales force or to give them feedback on market intelligence (Capron and Hulland 1999; Evans and Schlacter 1985; Le Meunier-FitzHugh and Piercy 2006). Pool-ing market intelligence and discussing its implications should facilitate team identification as it is mutually beneficial and will promote organizational learning through sharing knowledge, capabilities, and experience. We hypothesize:
Hypothesis 4: The development of a joint market intelli-gence system between sales and marketing functions will be positively associated with organizational learning.
Communications
Effective communication across boundaries is a key construct in collaboration (Fisher, Maltz, and Jaworski 1997; Griffin and Hauser 1996; Kotler, Rackham, and Krishnaswamy 2006; Menon, Bharadwaj, and Howell 1996). Souder (1988) noted that frequent combined meetings to discuss joint involve-ments and to increase the sharing of information aid in the establishment of closer interfunctional relationships. Managers often wish to improve relationships between departments by increasing contacts through information flows, but simply increasing frequency of communication may be ineffective in reducing conflicts between sales and marketing (Dawes and Massey 2005). Rouzies et al. (2005) suggest that increasing the frequency of communication between sales and marketing is likely to damage collaboration if the interaction is acrimoni-ous. However, bidirectional (consultative or interactive) com-munication has a strong negative impact on conflict because it is a collaborative form of communication (Dawes and Massey 2005; Kotler, Rackham, and Krishnaswamy 2006). Effec-tive communication is bidirectional and can help to reduce
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interdepartmental conflict by aligning targets, improving understanding, and sharing ideas. We hypothesize:
Hypothesis 5: Effective communications between sales and marketing functions will be negatively associated with interdepartmental conflict.
A number of studies recommend that feedback from the sales force should be included in gathering market intelligence (e.g., Festervand, Grove, and Reidenbach 1988; Kotler, Rack-ham, and Krishnaswamy 2006; Le Meunier-FitzHugh and Piercy 2006). Further, Wood and Tandon (1994) note that after collection, market intelligence needs to be disseminated. Correspondingly, “Intelligence data can be rendered useless if not properly processed and analyzed . . . [and] if not com-municated quickly and effectively” (Powell and Allgaier 1998, pp. 33–34). Collation and dissemination of information may form part of the process required to improve communication between sales and marketing, because it promotes both formal and informal communications. Interfunctional communica-tion may be improved by encouraging information-sharing behaviors (Fisher, Maltz, and Jaworski 1997). The develop-ment of a robust system of market intelligence requires sales and marketing to exchange information and discuss implica-tions, which should improve bidirectional communications. Consequently, we hypothesize:
Hypothesis 6: Shared market intelligence between sales and marketing functions will be positively associated with the level of communications.
Management Attitudes Toward Coordination
Functional specialization is important for operational effec-tiveness but must be accompanied by creating a collaborative working environment (Maltz and Kohli 2000; Piercy 2006; Ruekert and Walker 1987). Viswanathan and Olson (1992) suggest that the role of senior management is to create the culture and environment of the organization. Kahn suggested that “Top management should consider programs that encour-age departments to achieve goals collectively, have mutual understanding, work informally together, ascribe to the same vision and share ideas and resources” (1996, p. 147). The process of building a shared vision can lead to staff achiev-ing more than they thought they could. The vision becomes achievable as it becomes more real in the sense of a mental reality (Senge 1990).
Sharing vision is important to collaboration, and processes need to be identified that may be relevant to establishing shared vision. As many of these activities are strategic, any program aimed at improving collaboration between sales and marketing should include modifications to the company’s stra-tegic planning process. Shapiro notes that, “If marketing and sales do not cooperate, the company’s strategy will be incon-
sistent and weak; and execution will be flawed and inefficient” (2002). Similarly, Kotler, Rackham, and Krishnaswamy (2006) recommend that senior managers should intervene to prevent interdepartmental conflict created by competition for scarce resources. However, sales and marketing have frequently been set different goals by senior management and may be working at cross-purposes to each other (Lorge 1999; Piercy 2006; Rouzies et al. 2005; Strahle, Spiro, and Acito 1996). Senior managers frequently have difficulty in assessing the trade-offs between short-term and long-term financial performance (Gupta, Raj, and Wilemon 1985; Webster 1997). One aspect of the general management role is to reduce interdepartmental conflict between sales and marketing. Our hypothesis is:
Hypothesis 7: A positive management attitude toward coor-dination between the sales and marketing functions will be negatively associated with interdepartmental conflict.
A critical dimension of effective collaboration is infor-mation sharing. However, in many organizations, market information may be available, but organizational structures and processes fail to facilitate prompt and meaningful market information exchange (Evans and Schlacter 1985). Informa-tion sharing may be promoted through setting up integrated market intelligence processes that allow sales and marketing to work together formally and informally. Such collaborative developments are highly dependent on supportive senior manager attitudes. The main concerns about the sales and marketing interface are that they may not exchange infor-mation or collaborate to improve performance, and senior management is not focused on establishing coordination between these two areas (e.g., Piercy 2006; Workman, Hom-burg, and Gruner 1998; Yandle and Blythe 2000). A positive management attitude toward coordination will help develop a culture of sharing, will allow compatible goals to be set and joint planning to take place, as well as establish an esprit de corps and develop a common vision (e.g., Child 1985; Kahn 1996; Menon, Bharadwaj, and Howell 1996; Slater and Narver 1995). We hypothesize that:
Hypothesis 8: A positive management attitude toward coordination between the sales and marketing functions will be positively associated with the creation of market intelligence.
RESEARCH METHOD
Sample Selection
The population sampled comprised large, UK-based organiza-tions operating in business-to-business markets. A sampling frame of 3,349 organizations was provided by a commercial agency and screening processes utilized to remove organiza-tions with duplicate listings. From the cleansed sampling
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frame, 1,000 organizations were selected for inclusion in the survey. Data were collected through a mail survey using a pre-tested, self-administered questionnaire, and the sampling units were managing directors/chief executives. Organizations were selected from different industries to improve generalizability. The initial survey questionnaire and letter were followed by a reminder letter approximately two weeks later. A month after the initial contact, another questionnaire and letter were sent to nonrespondents, followed two weeks later by a final reminder (Fox, Robinson, and Boardley 1998). The survey generated 223 (22.3 percent) responses, of which 77 were ineligible for a variety of reasons (e.g., their turnover was too low, there were no sales or no marketing departments, they “do not complete surveys,” they were no longer trading, or the research instrument was inadequately completed). The sample composition is shown in Table 1, and the response rate statistics are shown in Table 2.
The study achieved a response rate of 22.3 percent, and a usable questionnaire response rate of 14.6 percent. An ac-ceptable and significant response rate from managing directors (chief executives) is 10–20 percent (Menon, Bharadwaj, and Howell 1996; Slotegraaf and Dickson 2004). Multivariate analysis of variance (MANOVA) tests were carried out to discover if there were any significant differences between the types of respondent, industry types, and organizational turn-over within the constructs in our model, and no significant differences were detected.
Two possible sources of sampling error were considered. Nonresponse bias was examined by performing chi-square tests and multiple t-tests on the early and late response groups (Armstrong and Overton 1977). Chi-square tests were car-ried out on early and late responses based on industry type, turnover, and number of employees, and no significant differences were found at the conventional level (p > 0.05). Multiple t-tests were also carried out and yielded no significant differences between the two groups at conventional levels (p > 0.05) for the majority of constructs in the study. However, in the case of business performance, early responses had an average score of 4.75, whereas late responses had an average of 4.25, which was significantly different. However, it may be expected that there would be a difference between early and late responses in this measure, as less efficient/successful organizations are more likely to be those who respond later, after prompting. To test this supposition, we measured the means of four groups—those who responded before the first reminder, the group who replied after the first reminder, the group who replied after the second questionnaire was sent out but before the second reminder, and the group who replied after the final reminder. The means of these groups were 4.83, 4.73, 4.32, and 4.17, respectively. These results appear to support our contention that the less-efficient organizations were those who responded after prompting. The noncoverage error was examined by comparing the characteristics (turnover, number of employees, and industry type) of a sample who did not respond. The tests found that nonresponse bias was not present in the data.
Operationalization and Measurement
The scales were adapted from prior research and from explor-atory interviews with nine practitioners in sales and market-ing. All items (including sources used for scale) are shown in the Appendix. The majority of the items selected for the final questionnaire were measures that had been used in prior
Table 1 Sample Composition (N = 146)
Industry Percent
Industrial Manufacturers 42Wholesalers 30Consumer Goods Manufacturers 28
Respondents
Chairman/Chief Executive Officers/Managing Directors/ Directors/General Managers 70.5Marketing Directors/Managers/Executives 11.6Sales and Marketing Directors/Managers 6.9Sales Directors/Managers 4.8Business Development Managers 2.7Other Human Resources Managers/Accountants/ Customer Liaison Managers 3.4Total Number of Senior Managers (Directors) 83.6
Annual Turnover
£11 million–£20 million ($21.9–$39.8 million) 52£21 million–£50 million ($41.8–$99.6 million) 27More than £50 million (more than $99.6 million) 21
Table 2Survey Response Rate Statistics
Total
Sample Size 1,000Total Number of Respondents 223Total Number of Usable Respondents 146Turnover too Low (less than £11 million [$21.9 million]) 24No Sales or Marketing Department 10Do Not Do Surveys 13No Longer Trading 25Unusable 5Total Number Ineligible Respondents 77Response Rate (percent) 14.6
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research, which is a recommended procedure and assists with the concurrent validity of the questionnaire (Churchill and Iacobucci 2002).
Collaboration Between Sales and Marketing
The collaboration measure was adapted from Hult, Ketchen, and Slater (2002). The items on collaboration between sales and marketing were called team orientation in the Hult, Ketchen, and Slater (2002) study, and defined the degree to which the members of the organization stress collaboration and cooperation in performing activities and making decisions. The scale consists of three items (α = 0.86).
Business Performance
The measure of business performance was adapted from Behr-man and Perreault (1982). This measure is similar to measures of business performance in prior research (e.g., Morgan and Turnell 2003). The scale consists of four items (α = 0.83).
Interdepartmental Conflict
Interdepartmental conflict relates to the type and depth of interactions—both formal and informal—that can exist be-tween sales and marketing. These measures were adapted from prior research (Menon, Jaworski, and Kohli 1997) concerned with the impact of interdepartmental interaction, the tension that occurs in interdepartmental interactions, and the existence of goal incompatibility between departments. The scale consists of four items (α = 0.64, mean interitem correlation 0.31).
Organizational Learning
Our measure of organizational learning was adapted from Hult, Ketchen, and Slater (2002), who were concerned with learning climates and cycle times in supply chains. Organiza-tional learning was termed learning orientation in this study and defined the degree to which members of the group stressed the value of learning for long-term benefits to the organization and the specified strategic units. The scale consists of three items (α = 0.81).
Market Intelligence
The market intelligence scale consists of three items (α = 0.63, mean interitem correlation 0.36) adapted from prior research (Evans and Schlacter 1985; Sinkula, Baker, and Noordewier 1997). The measures evaluate the role of sales managers and salespeople in marketing information systems and the extent to which the organization uses sales as a source
of information (Evans and Schlacter 1985) and considers the importance of sharing information (Sinkula, Baker, and Noordewier 1997).
Communications
The communications measure (α = 0.83) is concerned with intelligence dissemination and responsiveness and is adapted from prior research by Kohli, Jaworski, and Kumar (1993). Communications are frequently cited as important in improv-ing collaboration, and this receives support from Gupta, Raj, and Wilemon (1985), who found that improved communica-tions can lead to greater interfunctional integration. Kohli and Jaworski (1990) found that effective communications had an impact on business performance.
Management Attitudes Toward Coordination
A new two-item scale was used to measure management atti-tudes toward coordination (α = 0.85). The goal of the scale was to capture the support of senior management for aligning sales and marketing goals and activities. The items were developed in conjunction with senior sales and marketing executives and sub-sequently tested for comprehension with executives. Krohmer, Homburg, and Workman (2002) found that senior managers should be aware of the benefits of integration and promote cross-functional involvement. Moreover, Menon, Bharadwaj, and Howell suggest, “Managers should formalize overlapping activities that require inter-functional coordination and should clarify roles that are mutually dependent and have potential for role ambiguity” (1996, p. 309). The scales were developed to test the concepts of aligning goals and activities.
Validity
To assess content validity, the initial questionnaire was given to 25 part-time MBA students to review, and its effectiveness was discussed separately with a small group of these students. Moser and Kalton (1971) indicate that an appropriate way to measure content validity is to use the judgment of specialists in that area. These students were selected because they all are currently working in senior management roles. Sixteen ques-tionnaires from the pilot survey were returned, and a number of adjustments were made to the order of the questions and three questions had to be reworded to improve their clarity. The questionnaire was then pretested by being sent to 30 managing directors. There were 20 responses from the pretest, which resulted in further adjustments to the layout, grammar, and punctuation of the questions. Four marketing lecturers then independently reviewed the questionnaire, but no other changes were made.
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A Cronbach’s alpha test (see Table 3) was carried out to test the internal reliability of each of the measures. It was found that two of the measures had a Cronbach’s alpha of less than 0.7 (interdepartmental conflict, 0.64; market intelligence 0.63). However, it is not unusual to find a low Cronbach’s alpha value when the scale being tested has fewer than 10 items. It may be more appropriate to report a mean interitem correlation for the items (interdepartmental conflict, 0.31; market intelligence, 0.36), and an optimum range for the mean interitem correlation would be between 0.2 and 0.4 (Briggs and Cheek 1986; Cortina 1993). This test confirms the internal reliability of the interdepartmental conflict and market intelligence measures.
The measurement model (confirmatory factor analysis) establishes how and to what extent the observed variables are linked to the underlying latent factors. The goodness-of-fit statistics indicate an adequate fit with χ2 = 185.61, degrees of freedom (df ) = 186, p = 0.494; goodness-of-fit index (GFI) = 0.90. Table 3 summarizes the correlations and descriptive statistics.
RESULTS
The structural model indicates that the theoretical model is an overall good fit to the data: χ2 = 191.31, df = 197, p = 0.601; GFI = 0.90. The model confirms that all eight hypotheses are supported by the empirical findings (see Table 4). H1 consid-ers the effect of collaboration between sales and marketing on business performance and finds it is positive and significant. H2 proposes a negative relationship between interdepartmen-tal conflict and collaboration between sales and marketing, and the path is significant. H3 considers the relationship between organizational learning and collaboration between sales and marketing, and the path is positive and significant. H4 finds that the relationship between market intelligence and organizational learning is positive and significant. H5 finds communications and interdepartmental conflict have a significant negative relationship. H6 considers the impact of market intelligence on communication and finds it is positive and significant. H7 proposes a negative relationship between management attitude toward coordination and interdepart-mental conflict, and the path is negative and significant. H8 considers the relationship between management attitudes to market intelligence and found the relationship to be positive and significant.
Unsurprisingly, when standardized effects are examined (see Table 5), the largest impact on business performance is the effects of collaboration between sales and marketing (0.620) and interdepartmental conflict (–0.512). Management atti-tudes toward coordination also played a considerable indirect role (0.394). By comparison, market intelligence (0.129), communications (0.137), and organizational learning (0.073)
play relatively small roles in explaining variations in business performance.
DISCUSSION
The study finds strong support for the hypothesis that col-laboration between sales and marketing has a positive associa-tion with business performance. Although this relationship has been proposed on a number of occasions (e.g., Dewsnap and Jobber 2000; Kotler, Rackham, and Krishnaswamy 2006; Rouzies et al. 2005), this is the first empirical evidence confirming that collaboration between sales and marketing is positively related to benefits for the organizations in terms of enhanced business performance. These findings indicate that organizations should consider investing in improving the rela-tionship between sales and marketing functions, as a route to achieving benefits to the organization in business performance. Further, the research identifies a number of factors that influ-ence collaboration between sales and marketing.
Interestingly, interdepartmental conflict has a strong nega-tive impact on collaboration between sales and marketing. It appears that when interdepartmental conflict is higher, collaboration between sales and marketing tends to be lower. This finding confirms prior research (Dawes and Massey 2005). Interdepartmental conflict is characterized by different philosophies, working at cross-purposes, and a lack of under-standing of each other’s roles. In addition, interdepartmental conflict is aggravated by poor communications (e.g., Griffin and Hauser 1996; Piercy 2006; Ruekert and Walker 1987). It is unsurprising that the constructs communications and management attitudes toward coordination have significant negative relationships with interdepartmental conflict.
Organizational learning embraces the concepts of working together, sharing ideas, developing good practice, and inte-grating knowledge for the benefit of the organization. This construct captures attributes such as sharing information and aligning paradigms by management. The model confirms that organizational learning is positively associated with collabora-tion between sales and marketing. Although organizational learning plays a relatively small role in explaining the total variance in business performance, the findings suggest that or-ganizations that invest in learning should benefit from greater internal collaboration and improved business performance.
Market intelligence is important to both sales and market-ing, as it allows them to focus their activities on customers more efficiently, and it relies on information from both func-tions to be effective. However, prior research confirms that the development of market intelligence is less likely to be successful if information is not jointly discussed and then disseminated to the rest of the organization (Kotler, Rackham, and Krish-naswamy 2006; Powell and Allgaier 1998). Market intelligence provides an opportunity for the development of organizational
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Tabl
e 3
Co
rrel
atio
n M
atri
x, C
ronb
ach’
s A
lpha
, Mea
n, a
nd S
tand
ard
Dev
iati
on
Cro
nbac
h’s
Alp
ha
(m
ean
M
ean
inte
rite
m
(sta
ndar
d
co
rrel
atio
n)
devi
atio
n)
V1
V2
V3
V4
V5
V6
V7
Man
agem
ent A
ttitu
des
0.
85
4.92
To
war
d C
oord
inat
ion
(V1)
(1.4
0)In
terd
epar
tmen
tal C
onfli
ct (
V2)
0.
64
2.70
–0
.533
**
(0
.31)
(1
.06)
Com
mun
icat
ions
(V
3)
0.83
4.
89
0.44
7**
–0.3
38**
(1
.51)
Org
aniz
atio
nal L
earn
ing
(V4)
0.
81
4.57
0.
227*
* –0
.100
0.
158
(1
.16)
Mar
ket
Inte
llige
nce
(V5)
0.
63
5.07
0.
531*
* –0
.474
**
0.52
4**
0.27
9**
(0.3
6)
(1.1
7)C
olla
bora
tion
Betw
een
Sale
s
0.86
4.
99
0.59
1**
–0.6
14**
0.
405*
* 0.
210*
0.
494*
*
and
Mar
ketin
g (V
6)
(1
.25)
Busi
ness
Per
form
ance
(V
7)
0.83
4.
57
0.30
5**
–0.3
22**
0.
345*
* 0.
312*
* 0.
354*
* 0.
295*
*
(1.1
5)
Not
es: N
= 1
46. *
Cor
rela
tion
is s
igni
fican
t at t
he 0
.05
leve
l (tw
o-ta
iled)
. **
Cor
rela
tion
is s
igni
fican
t at t
he 0
.01
leve
l (tw
o-ta
iled)
.
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216 Journal of Personal Selling & Sales Management
learning through information sharing. Developing market in-telligence systems also promotes bidirectional communication and consultation, and influences communications.
Communications is a central construct in this study and illustrates opportunities for sales and marketing staff to exchange information, develop strategies, and coordinate activities. However, communication has to be two-way, or consultative, to be effective in reducing interdepartmental conflict. Simply increasing frequency of communication is unlikely to be beneficial to the organization (Dawes and Massey 2005; Kotler, Rackham, and Krishnaswamy 2006; Rouzies et al. 2005). The relationship of communications to market intelligence is clear, as developing market intelligence allows sales and marketing staff to consult over a mutually beneficial activity.
Management attitudes toward coordination is also a key construct, with a strong impact on both interdepartmental conflict and market intelligence. Management plays a pivotal role in overcoming the natural tension between sales and marketing. Setting aligned goals and creating a culture of
cooperation are associated with reduced interdepartmental conflict and, to a greater extent, collaborative working, for ex-ample, through the development of joint market intelligence. Of course, there are other factors that may be important to improving collaboration between sales and marketing (for example, the use of joint working parties), but market intel-ligence may provide a particularly accessible and relevant area on which to focus management attention because it encourages sales and marketing to work together on a mutually beneficial activity. The study confirms that greater collaboration between sales and marketing is positively associated with business performance, and we have added insight into several factors that are related to the operation of the interface between sales and marketing.
LIMITATIONS AND FUTURE RESEARCH
There are several limitations to the study. First, the organi-zations sampled were only large, UK, business-to-business
Table 4 Structural Model
Standardized Paths Modeled Coefficient t-Value p
H1 Collaboration between sales → Business performance 0.620 4.770 0.001 and marketingH2 Interdepartmental conflict → Collaboration between sales and –0.826 –4.453 0.001 marketing H3 Organizational learning → Collaboration between sales and 0.117 2.173 0.030 marketingH4 Market intelligence → Organizational learning 0.320 3.059 0.001H5 Communications → Interdepartmental conflict –0.298 –2.538 0.011H6 Market intelligence → Communications 0.772 3.059 0.002H7 Management attitudes toward → Interdepartmental conflict –0.596 –3.947 0.001 coordinationH8 Management attitudes toward → Market intelligence 0.694 4.461 0.001 coordination
Overall fit: χ2 = 191.31, df = 197, p = 0.601; GFI = 0.90.
Table 5Standardized Total, Direct and Indirect Effects of Constructs of Business Performance
Standardized Standardized Standardized Direct Effects Indirect Effects Total Effect
Management Attitudes Toward Coordination 0.000 0.394 0.394Market Intelligence 0.000 0.129 0.129Communications 0.000 0.137 0.137Interdepartmental Conflict 0.000 –0.512 –0.512Organizational Learning 0.000 0.073 0.073Collaboration Between Sales and Marketing 0.620 0.000 0.620Business Performance 0.000 0.000 0.000
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organizations; therefore, the generalizability of the findings to other sectors and sizes of organization may be limited and further research would be useful. Second, the questionnaire was targeted at senior managers and did not explicitly solicit the views of sales and marketing staff. This prevented the data being pooled from a number of respondents from within the organization and therefore should be highlighted as a possible area of bias. Future research could be expanded to include data from sales and marketing staff. Finally, the research was conducted within the United Kingdom and in one time frame. Therefore, the research could be expanded into other regions and may be developed into a longitudinal study.
MANAGEMENT IMPLICATIONS
To improve the sales and marketing interface, senior man-agement are required to develop a positive attitude to their coordination so that they can help to reduce interdepart-mental conflict and develop a culture of sharing. This may partially be achieved through focusing on creating a joint market intelligence forum, where both parties can contribute market information, develop joint strategies, and disseminate the information to their staff. Senior managers may reduce interdepartmental conflict by creating a joint vision, align-ing goals, and promoting collaborative planning. Interde-partmental conflict will also be reduced through improved bidirectional communications between sales and marketing. Collaboration between sales and marketing can be further enhanced through the development of organizational learn-ing. In conclusion, improving collaboration between sales and marketing should be an ongoing focus for senior managers as the research suggests that this will be linked to improved business performance.
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APPENDIX Scale Items for Construct Measure
Construct Items Adapted from
Collaboration Between • Cross-functional teamwork is a common way of working within sales Hult , Ketchen, Sales and Marketing and marketing. and Slater (2002)1 = Strongly disagree • Sales and marketing are committed to sharing their vision with each other.7 = Strongly agree • There is agreement between sales and marketing of our organizational vision.α = 0.86
Business Performance • How successful is the organization at generating a high level of sales revenue? Behrman and1 = Needs improvement • How successful is the organization at selling those products with the highest Perreault (1982)7 = Outstanding profit margins?α = 0.83 • How successful is the organization at exceeding all sales targets and objectives during the year? • How successful is the organization at generating sales of new products?
Interdepartmental Conflict • Sales and marketing get along well with each other. (Reverse scored) Menon, Jaworski,1 = Strongly disagree • Sales and marketing feel that the goals of their respective departments are in and Kohli (1997)7 = Strongly agree harmony with each other. (Reverse scored)α = 0.64 • The objectives pursued by the marketing department are incompatible withν = 0.31 those in the sales department. • There is little or no interdepartmental conflict between sales and marketing. (Reverse scored)
Organizational Learning • We believe that employee learning is an investment, not an expense. Hult, Ketchen,1 = Strongly disagree • We believe that the sales and marketing process is improved through learning. and Slater (2002)7 = Strongly agree • Our future sales and marketing success is at risk if we stop learning.α = 0.81
Market Intelligence • How frequently does the organization use sales as a source of information? Evans and1 = Very infrequently Schlacter (1985)7 = Very frequently
1 = Strongly disagree • There is a lot of communications between marketing and the sales department Sinkula, Baker, and7 = Strongly agree concerning market development. Noordewier (1997)α = 0.63 • When the sales department finds out something important about customers, itν = 0.36 is quick to alert other departments.
Communications • We have interdepartmental meetings at least once a quarter to discuss market Kohli, Jaworski,1 = Strongly disagree trends and developments. and Kumar (1993)7 = Strongly agree • Marketing personnel spend time assessing customers’ future needs with theα = 0.83 sales department. • Sales and marketing get together periodically to plan responses to changes taking place in our business environment.
Management Attitudes • Senior management ensures that the sales and marketing goals are closely aligned. New scaleToward Coordination • To what degree does senior management ensure that the activities of the sales1 = Not at all and marketing departments are well coordinated?7 = To a great extentα = 0.85D
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