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Navigating Through Rough Waters
Navigating Through Rough Waters The Importance of Trust in Managing Sales Representatives in Times of Change
Kevin M. McNeilly Marian B. Lawson Companies are in the midst of transition, either because of downsizing to reduce costs or re-engineering to improve quality; and the sales force is a key component in these changes. This study examines the impact of sales representatives’ relationships with their managers during times of change. The results suggest that representatives with greater trust in the sales manager are more accepting of the anticipated changes, especially in the longer run. Furthermore, managers interested in building trusting relationships with their representatives should be particularly concerned about using fair performance evaluation procedures and making joint sales calls with their representatives. © 1998 Elsevier Science Inc.
Address correspondence to Dr. K. M. McNeilly, Department of Marketing, Richard T. Farmer School of Business, Miami University, Oxford, OH 45056.
Industrial Marketing Management 28, 37–49 (1999) © 1998 Elsevier Science Inc. All rights reserved. 655 Avenue of the Americas, New York, NY 10010
INTRODUCTION That organizations are changing is almost old news these days. In fact, a recent American Management Association research report suggests that corporate America’s anthem should be Bob Dylan’s “The Times They Are A Changing” [1]. The types of changes range from the most radical form, where the very essence of the organization’s purpose and product is redefined, to more evolutionary changes, where processes and priorities are adapted to increase organizational efficiency and effectiveness. This special issue of Industrial Marketing Management reflects the increasingly central role the marketing and sales areas have to play in successfully implementing organizational change. As Wotruba [2] recently noted in this journal, “Whether now or in the near future, indus-
0019-8501/99/$–see front matter PII S0019-8501(98)00021-2
trial selling in all firms will experience major changes” (p. 328). Many of these changes are related to the customer orientations industrial firms are adopting [2, 3]. While customer-focused strategies have dominated the literature on consumer goods and services for some time, it is a more recent emphasis in industrial settings. We suggest that recognizing the importance of the sales force during re-engineering or other types of organizational change is long overdue. Sales representatives are well known to be the critical link to the customer, occupying the “boundary position” in organizations [4, 5]. During periods of organizational change, it is essential to maintain this link—not only to sustain sales, but also to help the customer adapt to changes in the company’s products and processes. Representing the company during organizational transitions often means explaining the changes, correcting misunderstandings, addressing rumors, and reassuring the customer that service and delivery will not suffer as the changes are implemented. Unfortunately, it also often means apologizing when the new systems are not immediately effective, and intervening when a system has failed. Managing customer relationships is difficult at best during organizational changes. It becomes almost impossible when the sales representatives themselves are anxious, uncertain, and/or negative about the changes. Some level of uncertainty, of course, will almost always accompany changes in products or systems; even under the best circumstances, the details are seldom fully worked out before the customer is involved. As such, what the sales force is often asked to represent is a concept—and a confidence in the organization’s ability to succeed in implementing it. The sales representative’s attitude about the value of the change, and the capability of the company, thus become central ingredients for sustaining effective customer relationships during periods of change. As the sales representative is the organization’s link to the customer, the sales manager is often the representative’s primary link to the company. The representative’s
KEVIN M. MCNEILLY is Professor of Marketing in the Department of Marketing, Richard T. Farmer School of Business at Miami University in Oxford, Ohio. MARIAN B. LAWSON is Associate Professor of Management in the Department of Management and Marketing, College of Business, at North Kentucky University, Highland Heights, Kentucky.
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attitude toward, and confidence in, organizational changes would be expected, at least in part, to be a function of trust in his or her manager. Effective management of a sales force during times of change requires understanding the importance, and difficulties, of the role the sales representatives play—and special attention to maintaining an effective managerial relationship with the representatives on whom the company depends. In this article, we present a study that examines the connection between sales representatives’ attitudes toward company changes, and the level of trust in their managerial relationships. The research setting is a Fortune 1000 company that has recently initiated changes to re-engineer the reps’ jobs, and the respondents are more than 350 members of the industrial sales force whose jobs are directly affected. We explore how the sales reps’ reported trust in their sales manager is related to their attitudes toward the changes, and factors that contribute to their levels of trust. The relationship between managerial trust and attitudes toward change does not appear to have been previously addressed in the limited field research on organizational change. In proposing and empirically investigating these relationships, we hope to contribute to the understanding of managing in times of change, and to highlight the importance of the managerial behaviors that sustain their sales representatives’ trust during the turbulence of change. In the following section, we first review some general issues related to managing during change, and propose a model of factors influencing representatives’ trust in their managers, and the relationship between that trust and the representatives’ attitudes toward company changes. We then present the research, and discuss the managerial implications of our findings.
MANAGING IN TIMES OF CHANGE By definition, organizational change is stressful [6]. Change is also threatening to many people. There are many quite rational explanations for why this would be so. Change demands giving up the familiar, often for a vaguely defined alternative. Uncertainty is an inherent characteristic of organizational change, and recent business activities provide associations with change that suggest its effects are not likely to be positive. For example, organizational announcements of efforts to become “leanand-mean” are widely recognized as portending lay-offs
The bottom line is that managing through times of change means being a familiar and credible source to the sales representatives. [7]. A sense of job security is often an early casualty when a company announces a “strategic change.” To be sure, some people seem to thrive on change. Others, however, appear to have a constitutionally low tolerance for the uncertainty and ambiguity of change [8, 9].1 Organizational consultant Price Pritchett [10] applies the “20-50-30 rule” to any population confronting change: 20% will be change-friendly, 50% will be neutral, and “the remaining 30% are the resisters” (p. 13). While Pritchett encourages managers to give more attention to the 70% that “are carrying the load” (p. 13), the fact remains that in any group of sales representatives, you can expect a wide range of responses to any changes—all of which must be managed. Beyond resistance to change in general, specific changes may be seen to threaten the very systems under which sales representatives have successfully earned their living. In fact, today’s organizational changes often entail new structures and programs that alter the very nature of the employment relationship. The deal between the employee and the organization, the “psychological contract,” is thus up for renegotiation [11]. Referring to the terms of employment as a “personal compact,” Professor Paul Strebel, Director of the Change Program at the International Institute of Management Development, recommends making revisions to the formal, psychological, and social dimensions of personal compacts an explicit aspect of any change process [12]. A systematic change program, however, presumes an organizational development sensitivity that may be outside the experience of most sales and marketing managers trying to navigate through the turbulence of change.
1 Over the past 35 years, there has been periodic social science research on “tolerance for ambiguity” as a personality trait, and its application to issues in organizational behavior. Although not conclusive as a predictor of specific behaviors, it is generally accepted that people have varying levels of comfort with uncertainty and change [8, 9].
A more typical organizational response to change is likely to be “threat rigidity” [13]—the familiar experience of having senior management tighten controls and cut off communication when it is needed the most. While this may be frustrating for those caught in the middle, Larkin and Larkin [14] argue that more communication of values and visions from executives is exactly what “frontline employees” do not need. What they do need to know about change is specific information relevant to their work, communicated directly by the organizational representative whom they know the best, and who knows the most about their work—“a familiar and credible source” ([14], p. 104). For sales representatives, who fills this description better than their sales manager? The bottom line is that managing through change means attending to the basic management tasks of being a familiar and credible source to the sales representatives. These “basic tasks” are, of course, easier said than done. While we will not presume to review the considerable literature documenting the difficulty and complexity of being an effective manager, it should be noted that the inherent difficulties of sales management can be expected to multiply when the tensions of change are strong. The future is often as uncertain for the manager as it is for the representatives—but the manager is “supposed to know,” and silence can be interpreted as withholding information. During such times, it is critical that the lines of communication with the sales representatives be open and active—even when the message is “I don’t know.” Obviously, the time for managers to begin developing credibility with representatives is not amidst the dynamics of change; it must be established over the course of the managerial relationship. We argue, however, that a credible managerial relationship is crucial to sustaining a positive sales force during the uncertainty and turbulence of organizational change. Whether this means helping a representative understand shifts in job descriptions, or working through the details of a new product line, or explaining re39
FIGURE 1.
Trust and attitudes toward organizational change.
defined territories, the message is often that the old and familiar is being replaced with the new and uncertain. In many instances, the sales manager is, in effect, saying to the representative, “trust me.” We suggest, therefore, that how positively a sales representative responds to organizational changes will be, at least to some extent, influenced by how much trust there is in their relationship with their managers. The framework and research presented in the following sections addresses two questions with respect to managerial relationships and organizational change: (1) how is this trust related to sales representatives’ attitudes toward organizational changes?, and (2) what factors are important in developing sales representatives’ trust in their managers? The relationships we propose are summarized in Figure 1; the perceptions and attitudes of interest are those of sales representatives. REPS’ TRUST IN MANAGERS AND ATTITUDES TOWARD ORGANIZATIONAL CHANGE As we have argued, a sales representative’s attitude about an organizational change can have important implications for how positively s/he is able to communicate that change to the customer. If representatives are personally threatened by, or negative about, a change, they are unlikely to promote it actively to the customer. This may be obvious in cases where the change directly affects products, or procedures that involve the customer. Many of the changes marketing organizations 40
are currently implementing, however, focus more on internal systems (e.g., electronic communication and ordering, technological sales assistance, etc.). These types of changes often include redefining organizational processes or responsibilities that may be less visible to the customer at the outset, but have more immediate impact on representatives. The effects on customer relationships can thus be more subtle, but nonetheless important. Organizational changes tend to be complex, and open discussions between managers and sales representatives are needed to help sort out their implications [15]. Such conversations are more likely, of course, if the representatives trust their managers to fully and honestly discuss with them what is known (and admit to what is not) about changes. Although discussions may not eliminate the anxiety of the unknown, they allow the representative and manager to confront the uncertainties together, and develop strategies for dealing with them, minimizing the likelihood of negative spillover of anxieties into customer relations. As we have noted, people will vary in their feelings about change in general; some will be predisposed to embrace it, and others will find change inherently aversive. Sales representatives’ general change orientations, therefore, will likely color responses to a specific organizational change. There may also be several levels of feelings or attitudes about any given organizational change. For example, confidence in their sales unit’s abilities to successfully implement a new system may differ from
The sales manager is not only the “human” face of the organization in presenting changes, but also the implementer. representatives’ assessments of the new system’s value to the company. Distinctions also may be made about a change on the basis of a time horizon. While sales representatives may agree with the intended long-term effects of a change, they may be wary of the turbulence that will accompany the changes in the near term. Thus, as our model in Figure 1 suggests, we expect sales representatives’ attitudes toward organizational changes to reflect, at least to some extent, their level of trust in their sales manager. The manager is not only the “human” face of the organization in presenting changes, but it is the manager who will be most directly involved with the representative in implementing them. Trust in the manager, therefore, should boost representatives’ confidence in organizational capability, and free the sales force to represent positively the changes, and the company, to the customer. Thus, we hypothesize: H1a: Reps who have more trust in their sales managers are more likely to have confidence in their unit’s ability to implement organizational change programs. H1b: Reps who have more trust in their sales managers are more likely to expect a favorable outcome from organizational change programs in the short term. H1c: Reps who have more trust in their sales managers are more likely to expect a favorable outcome from organizational change programs in the long term.
IMPORTANT FACTORS IN DEVELOPING TRUST IN SALES MANAGERS Building Trust Issues of trust are increasingly being recognized as critical to organizational success, especially in times of re-engineering [15, 16]. Nevertheless, there seems to be widespread agreement among organizational consultants that trust in management is at an all-time low [15, 17, 18]. In the marketing literature, the interest in trust has
primarily focused on various aspects of buyer–seller or principal–agent relationships [19–21]. There has only been limited attention thus far, however, to the issue of trust in sales–managerial relationships [4], which is the interest here. We are specifically interested in what a manager can do to encourage a sales representative’s trust. From the growing literature on organizational justice, we know that employees’ perceptions of fairness in the employment context are important influences on their work attitudes. At the relational level, we would expect whether or not a representative’s feelings that s/he has been treated fairly by the manager to influence his or her trust of that manager. We also suggest that the sense that their managers are familiar with the representatives would influence levels of trust. Fairness Whether an employee perceives his/her employment situation to be characterized by fairness is an area which has been widely researched in the past decade, under the heading of organizational justice [22–27]. This literature typically distinguishes between fairness related to the personal outcomes (distributive justice) and fairness related to organizational procedures (procedural justice) [25]. While trust is a characteristic of a relationship with another person, perceptions of fairness are characteristics of outcomes and processes—and the negative consequences of unfair treatment may be particularly powerful for customer contact employees, such as sales representatives [8]. In sales organizations, it is typically the sales manager who interacts most directly with the sales representatives, and who is seen to be responsible for many of the representatives’ “outcomes,” such as their account assignments. It is also the sales manager who interacts with the representatives in implementing such formal organizational “processes” as performance evaluations. As such, it is as part of the relationship with his/her manager 41
Whether trust influences fairness or the reverse, fairness is seen as one of the key components of trust. that the sales representative will experience fair, or unfair, treatment. Whether trust influences the fairness perceptions, or perceived fairness results in trust, is not clear [28]. Fairness, however, is seen to be at least one of the critical components of trust [17]. We propose that when representatives consider their managers to have established a standard of fairness in the course of performing critical management tasks, such as account allocation and performance appraisal, they will be more likely to trust their managers. Thus: H2: Sales managers who are seen to be fair are more likely to be trusted.
Familiarity We also suggest that managers who are seen to be familiar with their representatives are more likely to be trusted. This “familiarity” standard is used to assess the extent sales representatives feel that their managers really know them, and have reason to believe that their manager is aware of their style, efforts, and special difficulties with accounts. Given the independent nature of many industrial sales organizations, sales representatives may, in fact, have very little contact with their managers, and may not feel that their problems are understood. We would expect there to be less trust, both in the manager and in the manager’s decisions and explanations, under these conditions. One aspect of familiarity is simply the amount of time the representative has actual contact with the manager. The frequency with which the manager accompanies the representative on sales calls is also an indication of familiarity with the representative’s selling and account management techniques, and the particular complexities of some accounts. We would expect there to be positive relationship between the representatives’ sense that their managers are familiar with their work, and the level of trust in their manager. We hypothesize: 42
H3: Sales managers who are seen to be familiar with their reps are more likely to be trusted.
In the following section, we present a study conducted to examine the nature and scope of the relationships depicted in Figure 1. The focus of the model is the sales representative’s trust in his/her manager. We propose that perceived fairness and familiarity influence trust, and that trust in the sales manager will influence the sales reps’ attitudes toward the three aspects of organizational change. METHODOLOGY This study is a part of a research project investigating managerial issues within the industrial sales organization of a Fortune 1000 corporation. The company operates primarily in the U.S. printing and publishing industry, and customers include a broad variety of businesses and not-for-profit organizations throughout the United States; the marketing and sales functions are organized geographically. Sales representatives are dispersed across the United States in six regions (Northeast, Mideast, Southeast, Midwest, Northwest, and Southwest). Sales managers supervised an average of 11 reps (range: 5–18), and joint sales calls were considered to be a part of regular sales management activities. Like many U.S. firms, this company has been assessing strategies and planning organizational changes to respond to its changing competitive environment. Although the company had not implemented any radical changes, such as mergers or business spinoffs, incremental adaptations had been introduced in various parts of the organization during the past few years. At the time of this study, corporate headquarters had recently announced a “reengineering program” which would change the nature of some product offerings and shift the responsibilities of the sales representatives. This program was the first significant change to directly impact the sales force.
Data Collection and Sample For this study, surveys were sent to all U.S. sales representatives listed as full-time employees of the company. A survey was mailed to each representative’s home address, with a cover letter from the vice president of sales asking for their voluntary participation in the study. A stamped envelope addressed to the researchers was also provided for the return of the surveys. Two weeks later, a follow-up letter was sent out. Of the 693 surveys distributed, 358 usable surveys were returned, resulting in a response rate of 52%. The average age of the respondents was 38 years (range: 22–63). Most of the respondents (68%) had graduated from college and about one-quarter were female (26.3%). The average sales experience at the company for this population was 10 years (range: 1–40 years), and the average time working for their current sale manager was three years. These representatives’ annual sales volume averaged $835,000 (range: 0 to over $4.5 million). The characteristics of these respondents are consistent with a profile of the total sales force of this company. Measures The nine research variables used in this study include three change attitude scales, a measure of general orientation to change, a scale measuring the sales representatives’ trust in their managers, two measures of fairness (procedural and distributive justice), and two measures of familiarity. Each is described below, and all scales included in the study are reproduced in Appendix 1. Descriptive statistics and internal consistency coefficients (Cronbach’s alpha) for multi-item scales are included in Table 1. CHANGE. The set of questions measuring reps’ attitudes toward change was developed specifically for this study. In examining the change literature it seemed appropriate to consider the following issues in developing scales measuring change: personal and organizational adaptability to change, personal and organizational results from change, and recognizing that changes can be short- or long-term in terms of implications and results. The items asked the representatives to assess changes of the type the company had recently announced, in terms of their confidence in their own sales unit’s ability to handle the changes, and their beliefs about the shortterm and long-term effects of the changes. A single item, change orientation, was used to assess the respondent’s general orientation toward change; this item asked the re-
TABLE 1 Descriptive Statistics for Study Variables
Variable Unit change Short-term change Long-term change Change orientation Trust in sales manager Distributive justice Procedural justice Personal contact Joint sales calls
Mean
Standard Deviation
No. of Scale Items*
Coefficient Alpha
4.37 4.22 5.40 5.35 4.84 4.80 5.09 6.16 1.90
1.25 1.17 1.02 1.28 1.63 1.50 1.35 8.11 2.41
2 6 6 1 6 4 15 1 1
0.775 0.827 0.860 NA 0.936 0.912 0.967 NA NA
*Responses to all items, except Personal Contact and Joint Sales Calls, were on a seven-point scale where 1 5 strongly disagree and 7 5 strongly agree.
spondent the extent to which s/he agreed with the following: “Although change can be upsetting, it usually does more good than harm.” This variable was used as a control variable in the regression analyses on the relationship between trust and attitudes toward organizational changes. TRUST. The six items in the “trust in manager” subscale of the “reciprocal trust” measure used by Lagace [4] comprised the sales representatives’ trust in manager variable. FAIRNESS. The items included in the two fairness scales were adapted from those developed by Folger and Konovsky [24]. The first measure included four items asking the representatives to assess how fair they considered their account allocations to be. These items addressed the fairness of personal outcomes, generally identified as distributive justice. The second scale addressed perceived procedural justice. This scale included 15 items that asked the representative to describe the processes their managers used in conducting their most recent performance appraisals. FAMILIARITY. Two single items were used to indicate the manager’s personal familiarity with the representatives. The first, personal contact, simply asked the representatives to estimate the average hours per month they spent “face-to-face” with their managers. For this item, responses are reported in hours. The second, joint sales calls, asked the representatives, on average, on how many sales calls per month their manager accompanied them. The responses to this item are reported as the number of calls per month. ANALYSES AND RESULTS As Table 1 shows, the reliabilities for the scale variables range from 0.77 to 0.96, well within acceptable 43
Sales reps believe an open, interactive, system of evaluation does build trust with their sales manager. limits [29]. The intercorrelations among the study variables are reported in Table 2. Within similar variables, correlations averaged 0.263, with a range from 0.138 to 0.409, indicating acceptable levels of multicollinearity for a study of this type. Table 3 summarizes the results of the four multiple regression analyses that were conducted to address our research questions. The first three regression analyses assessed how trust in the sales manager is related to the representatives’ attitudes toward organizational changes. We performed a regression analysis on each of the variables measuring representatives’ attitudes toward organizational changes: unit confidence, short-term effects and long-term effects, while controlling for the effects of the representative’s general orientation toward change. As Table 3 reports, the more trusting the relationship between the sales manager and the rep, the more accepting they will be of change. In combination with the control variable (change orientation), trust in the sales manager explained 12% of the variance in the reps’ confidence in the unit’s ability to implement change; 6% of the vari-
ance in the reps’ accepting short-term changes; and 15% of the reps’ attitudes of long-term change. In the remaining analysis, the representatives’ trust in manager was the dependent variable, and two measures each of fairness and of familiarity were entered, together, as the independent variables. The results indicate that this set of independent variables explained over 62% of the variance in trust in manager, and procedural justice and joint sales calls were statistically significant.
DISCUSSION Our study measured sales reps’ attitudes about company changes that were planned to be implemented over the next few years. We looked at change along three dimensions: beliefs about the unit’s ability to handle the planned changes, and beliefs about the short- and longterm effects of these changes. We measured trust by asking reps to indicate the extent to which they trusted their sales manager, and fairness was assessed by asking reps
TABLE 2 Correlation Matrix Variable Names Attitudes toward change Unit change (V1) Short-term change (V2) Long-term change (V3) Change orientation (V4) Trust in manager (V5) Fairness Distributive justice (V6) Procedural justice (V7) Familiarity Personal contact (V8) Joint sales calls (V9)
V1
V2
V3
0.198** 0.232** 0.177** 0.321**
0.409** 0.162** 0.197**
0.289** 0.282**
0.124*
0.134* 0.312**
0.096 0.177**
0.238** 0.257**
0.153** 0.148**
0.074 0.101
0.145** 0.079
**Correlation is significant at the 0.01 level. *Correlation is significant at the 0.05 level.
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V4
V5
V6
0.003 0.086
0.410** 0.773**
0.472**
0.054 20.016
0.275** 0.315**
0.242** 0.138*
V7
V8
0.215** 0.217**
0.420**
V9
TABLE 3 Regression Results Dependent Variable Unit change Short-term change Long-term change Trust in manager
Independent Variable
Hypothesis
Regression Coefficient
Standard Error
F
R2
Trust in manager† Trust in manager† Trust in manager† Distributive justice Procedural justice Personal contact Joint sales calls
H1a H1b H1c H2
0.304* 0.180* 0.250* 0.042 0.713* 0.057 0.131*
0.039 0.038 0.032 0.042 0.047 0.008 0.025
24.295 10.646 29.331 137.28
0.123* 0.058* 0.145* 0.625*
H3
*Correlation is significant at the 0.01 level. † Regression model controlled for rep’s change orientation (significant in all four equations). Incremental R2 contributed by trust in manager is 0.092, 0.027, and 0.061, respectively.
to indicate whether accounts were allocated equitably (distributive justice) and whether the process of performance appraisal was unbiased, open, and helpful (procedural justice). Together, these measures indicate how difficult or easy it will be to get planned changes initially accepted by the reps. Although not conclusive, our results provide interesting insights into these issues. It should be noted that this is an initial investigation of the relationships depicted in Figure 1. In assessing these results, it is important to consider the nature of the organizational changes being implemented, and the strategy of incremental change that the company had adopted. The results might be quite different in organizational environments where change has been more radical, or where there is a recent history of negative experiences with change. Clearly, research in a cross-section of settings is needed to assess the generalizability of our findings. We offer this study as a preliminary examination of the proposed relationships, and encourage further research in this area. In terms of the first issue, we hypothesized that representatives’ attitudes toward organizational changes would be influenced by their trust in their sales managers. All of the analyses examining this relationship provide preliminary support for this argument; higher levels of trust were associated with more positive attitudes toward the changes. This can be seen in the regression analyses (Table 3), as well as in Table 4, where we show average attitudes toward change for each of four levels of trust. The first dependent variable, unit confidence, measured the representatives’ confidence in their work unit’s abilities to implement pending organizational changes. The results show that the more the sales reps’ trusted their manager the more optimistic they were about the ability of their unit to implement change. This is not surprising since the implementation of the company changes
was to be facilitated by the manager. The second and third dependent variable measured attitudes toward the effects of change in the long and short run. The results show that sales reps indicate greater confidence in the benefits of change over the long run and that trust has more of an impact on long-run attitudes. As discussed earlier, transitions do cause problems and concerns, but the assumption is that this will pass; and this is reflected in the different results for short- and long-run change. We were initially somewhat surprised, but encouraged, by these differences in time horizons. The minimal influences on expectations about the short-term effects suggest a realistic view of organizational change—that even if changes are seen to be beneficial in the long term, such benefits are seldom immediately realized. In fact, the difficulties of implementing changes may override any benefits in the short run. Thus, even when levels of trust in the managers are high, the representatives are not very optimistic about short-term effects of change. The goal, of course, is that the changes will be seen as attractive enough in the long run to make the short-term turbulence worthwhile. For the sales representatatives in this study, more positive attitudes about the long-term effects of the changes are associated with higher levels of trust in their sales managers.
TABLE 4 Trust in Sales Manager and Attitudes Toward Change
Levels of Trust Distrust Neutral Moderate High
n
Unit Change
Short-term Change
Long-term Change
89 70 82 112
3.76 4.27 4.64 4.70
3.84 4.23 4.17 4.53
5.06 5.23 5.45 5.74
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Taking a “buckle-up” approach may not be sufficient or effective as reps deal with internal changes of their sales positions. We have also proposed that if reps trust their managers and if they believe their sales managers treat them fairly, they are much more likely to accept their managers’ opinions and follow their lead when change is being proposed. We argued that perceptions of fairness and familiarity would influence the representatives’ levels of trust in their managers. Our data supports this proposition on a general level: higher levels of perceived fairness and familiarity resulted in higher levels of trust. Sales managers interested in building trust with their reps can do so by providing a fair process of appraisal and by making joint sales calls. The results show that the sales reps believe that using an open, interactive, system of evaluation does build trust with their sales manager. Also, managers who actively work with their reps on sales calls can provide evaluative feedback that builds a stronger tie to the manager. However, the way accounts are allocated (distributive justice) did not influence trust in the manager. Statistically, this is not surprising, because (1) there is a strong bivariate correlation (0.77) between procedural justice and trust in manager; and (2) there is also a significant correlation (0.47) between the two fairness variables, procedural justice and distributive justice (which is consistent with the organizational justice literature). While it appears that procedural justice captured the collective contribution of the two justice variables in this case, we would caution against interpreting this finding as indicating that only perceived fairness in performance evaluations is important, and perceived fairness in account allocation is not. The strong correlation between trust and procedural justice also indicates a need for further conceptual and empirical research clarifying the nature of the relationship between these constructs. The average number of joint sales calls also was significant in the regression on trust in the manager. Again, it should be noted that the two familiarity measures, personal contact and joint sales calls, were significantly correlated (0.42), as might be expected. It seems, however, 46
that how the manager’s time is spent (i.e., making sales calls with the representatives) is more important rather than simply the number of hours of face-to-face time spent, in terms of developing representatives’ trust. This may be true because face-to-face time with the sales manager may not always be aimed at improving productivity, while joint calls usually are. We do not intend to assert that perceptions of fairness and familiarity are only important to the development and maintenance of trust during periods of change. Rather, our intent is to highlight the relationship between managerial trust and change attitudes, and to offer insight into managerial activities that can improve a rep’s trust. The importance of context here is that during the turbulence of change, these basic managerial behaviors are likely to be minimized—when, in fact, they may be most needed. MANAGERIAL IMPLICATIONS We began this article by recognizing that change has become a fact of organizational life. In the case of radical change, the message is clearly “what used to be is no more.” Even more subtle changes, however, send a message to organization members that “what is today may not be what is tomorrow.” Perhaps the need for company flexibility, adaptation, and quick responses may be the only thing we can predict about the future with any certainty. From a sales management view, the goal is to develop and maintain a sales force that is both positive about the organization and adaptive to change. Our argument is that this is best achieved through effective managerial behavior. In this concluding section, we attempt to summarize our recommendations to managers who must navigate through the rough waters of change. Recognize that Change Is Hard—and Talk About It! Giving up expectations that change should be painless and that transitions can always be smooth may be a nec-
essary step for all organizational members. Change is not only confusing, but it is inherently stressful. Managers in particular, however, must be aware that their relationships with their representatives can “either add to, or reduce, the amount of felt stress the sales person experiences in the work environment” ([30], p. 256). Managers must seek to reduce the stress of change by maintaining open communications and discussions with the sales representatives—both about the facts of, and the uncertainties surrounding, the change. Taking a “buck-up” approach may not be sufficient or effective as reps deal with internal changes of their sales position. Learning new procedures, programs, and sales roles takes time and success may not be quick, so listening to concerns and talking through these issues can build the necessary trust needed to help reps deal with uncertainty. A corollary here is to remember that people will differ in their reaction to any change. In our research, the control variable, a “personality” variable indicating the sales representatives’ general change orientation, explained significant amounts of the variance in all three attitudes about the organizational changes. There may be little a manager can do about this, beyond recognizing and understanding that responses to change will vary. To the extent a representative looks to the manager for cues on how to perceive a specific change, however, the manager must be sensitive to how the change is framed and communicated [17]. Establish, and Maintain, Representatives’ Trust To maintain open lines of communication, especially during change periods, sales representatives must be able to trust their managers as “familiar and credible” sources. In focusing on what managers can do to build representatives’ trust in them, we have emphasized fairness and familiarity. To the extent that organizational changes often involve new procedures and resource allocations, fairness issues may become particularly salient during periods of change [23]. As Blancero, Johnson, and Lakshman [8] have recently highlighted, the impact of feelings of unfair treatment may be strongest for customer contact employees, where the negative spillover onto customers is most likely. Nothing is worse for morale than when sales reps think they have been treated unfairly. Whether it is real or not, this situation can cause frustration to other reps and reduce customers’ loyalty to the company. Organizational procedures, per se, can be seen to be fair or unfair—but as our study emphasizes, it is how a manager implements the performance evaluation process that
influences the representatives’ trust. This may be especially important to remember during extended periods of change, when procedural details such as performance reviews are likely to be skipped or glossed over. Formal performance evaluations represent opportunities for communicated listening, and understanding, that are essential to maintaining a sense of fairness. So, during times of change, sales managers need to remember to continue to provide feedback about performance and provide an open-door policy to show their interest in being supportive and fair. Familiarity is the other influence on trust we have proposed. Representatives must see managerial input, either about performance reviews or about the effects of organizational changes, as being grounded on a credible understanding of them and their work. In our study, the specific behavior influencing representatives’ trust in their managers was the number of sales calls managers make with the representatives. This is another fundamental management activity that is easily omitted during the turbulence of organizational change, but that provides opportunities to establish, and maintain, credibility and familiarity—and trust—with the sales representatives. As sales managers are asked to handle internal changes which will undoubtedly take time, they need to continue to set some time aside to call jointly on customers with their reps. This activity helps the reps deal with questions by the customer, and shows that the company will continue to support the rep and the customer as these changes are made, and provides an opportunity for both manager and rep to interact. Respect the Managerial Relationship A goal of this article has been to highlight the importance of the sales manager–representative relationship during times of change. Our research demonstrated that sales managers’ behaviors influence the representatives’ trust, and that this trust affects the representatives’ attitudes about organizational changes. We would, therefore, admonish those responsible for re-engineering the sales and marketing functions to respect the relationships that managers have established with their representatives. Organizational changes should be seen as opportunities to build upon, rather than disrupt, the trust of the sales force. REFERENCES 1. Romano, C.: Managing Change, Diversity and Emotions. Management Review 84(7), 6–7 (1995).
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2. Wotruba, Thomas R.: The Transformation of Industrial Selling: Causes and Consequences. Industrial Marketing Management 25, 327–338 (1996). 3. Cravens, D. W.: The Changing Role of the Sales Force. Marketing Management 4(2), 49–57 (1995). 4. Lagace, Rosemary R.: An Exploratory Study of Reciprocal Trust Between Sales Managers and Sales Persons. Journal of Personal Selling & Sales Management XI(2), 49–58 (1991). 5. Rochford, L., and Wotruba, T. R.: New Product Development Under Changing Economic Conditions: The Role of the Salesforce. Journal of Business & Industrial Marketing 8(3), 4–12 (1993).
16. Shaw, Robert B.: Trust In the Balance: Building Successful Organizations on Results, Integrity, and Concern. Jossey-Bass Publishers, San Francisco, CA (1997). 17. Caudron, Shari: Rebuilding Employee Trust. Training & Development 50(8), 18–22 (1996). 18. Trust in Me. The Economist December 16, 61(1995). 19. Doney, P., and Cannon, J.: An Examination of the Nature of Trust in Buyer-Seller Relationships. Journal of Marketing 61(2), 35–51 (1997). 20. Kumar, N.: The Power of Trust in Manufacturer-Retailer Relationships. Harvard Business Review 74(6), 92–106 (1996).
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7. Osborne, J. D.: Lean and Mean: The Functions and Power of a Business Myth. Paper presented at the Annual Meeting of the Academy of Management, Vancouver, BC (1995).
22. Bies, R. J., and Moag, J. S.: Interactional Justice: Communication Criteria of Fairness, in Research on Negotiation in Organizations, Vol. 1, R. J. Lewicki, B. H. Sheppard, and M. H. Bazerman, eds., JAI Press, Greenwich, CT, 1986.
8. Blancero, D., Johnson, S., and Lakshman, C: Psychological Contracts and Fairness: The Effects of Violations on Customer Service Behavior. Journal of Market-Focused Management 1(1), 49–63 (1996).
23. Cobb, A. T., Folger, R., and Wooten, K.: The Role Justice Plays in Organizational Change. Public Administration Quarterly 19(2), 135–151 (1995).
9. Schere, J. L.: Tolerance of Ambiguity as a Discriminating Variable Between Entrepreneurs and Managers. Academy of Management Proceedings 404–409 (1982).
24. Folger, R., and Konovsky, M. A.: Effects of Procedural and Distributive Justice on Reactions to Pay Raise Decisions. Academy of Management Journal 32, 115–130 (1989).
10. Pritchett, Price: Overcome Resistance. Executive Excellence 14(2), 13–14 (1997).
25. Greenberg, J.: Organizational Justice: Yesterday, Today, and Tomorrow. Journal of Management 16, 399–432 (1990).
11. Rousseau, D. M.: Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Sage, Thousand Oaks, CA, 1995.
26. Lind, E. A., and Tyler, T. R.: The Social Psychology of Procedural Justice. Plenum Press, New York, 1988.
12. Strebel, Paul: Why Do Employees Resist Change? Harvard Business Review 74(3), 86–92 (1996).
27. Sheppard, B. H., Lewicki, R. J., and Minton, J. W.: Organizational Justice: The Search for Fairness in the Workplace. Lexington Books, New York, 1992.
13. Staw, B. M., Sandelands, L., and Dutton, J.: Threat-Rigidity Effects in Organizational Behavior: A Multilevel Analysis. Administrative Science Quarterly 26, 501–524 (1981). 14. Larkin, T. J., and Larkin, Sandar: Reaching and Changing Frontline Employees. Harvard Business Review 54(3), 95–104 (1996). 15. Management’s Lack of Credibility Dogs Many Companies: Organizational Change is Impeded by Employee Distrust. Supervision 58(3), 3–4 (1997).
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28. Fulk, J., Brief, A. P., and Barr, S. H.: Trust-in-Supervisor and Perceived Fairness and Accuracy of Performance Evaluations. Journal of Business Research 13, 301–313 (1985). 29. Nunnally, J. C.: Psychometric Theory. McGraw-Hill, New York, 1978. 30. Lapidus, R. S., Roberts, J. A., and Chonko, L. B.: Stressors, Leadership Substitutes, and Relations with Supervision among Industrial Salespeople. Industrial Marketing Management 26, 255–269 (1997).
APPENDIX 1 Research Variable Scale Items Change Attitude Scales Unit confidence 1. When the changes come, my area will be able to handle them better than other areas. 2. When the changes come, my district will be able to handle them better than the other districts in my area. Short-term effects 1. In the short run, these changes will improve my ability to meet customers’ needs. 2. In the short run, these changes will increase my workload.* 3. In the short run, these changes will decrease my earning potential.* 4. In the short run, these changes will harm my job satisfaction.* 5. In the short run, these changes will improve the company’s efficiency. 6. In the short run, these changes will improve the company’s profitability. Long-term effects 1. In the long run, these changes will improve my ability to meet customers’ needs. 2. In the long run, these changes will increase my workload.* 3. In the long run, these changes will decrease my earning potential.* 4. In the long run, these changes will harm my job satisfaction.* 5. In the long run, these changes will improve the company’s efficiency 6. In the long run, these changes will improve the company’s profitability. Trust in Sales Manager 1. I feel free to discuss work problems with my manager without fear of having it used against me later. 2. I have complete trust that my manager will treat me fairly. 3. If I make a mistake my manager is willing to “forgive and forget.” 4. My manager is friendly and approachable. 5. I can count on my manager for help if I have difficulties with my job. 6. I trust my manager to make quality business decisions. Fairness Distributive Justice 1. The accounts allocated to me provide opportunity for sales growth 2. The accounts allocated to me provide opportunity for income growth 3. The growth potential of the accounts allocated to me is the full amount I deserved 4. The growth potential of the accounts allocated to me met my expectations Procedural Justice Stem: “The last time I had a performance appraisal . . .” 1. My manager was honest and ethical in dealing with me. 2. My manager gave me an opportunity to express my side. 3. My manager used consistent standards in evaluating my performance. 4. My manager considered my views regarding my performance. 5. My manager gave me feedback that helped me learn how well I was doing. 6. My manager was completely candid and frank with me. 7. My manager showed a real interest in trying to be fair. 8. My manager became thoroughly familiar with my performance. 9. My manager took into account factors beyond my control. 10. My manager got input from me before making a recommendation. 11. My manager made clear what was expected of me. 12. My manager discussed plans or objectives to improve my performance. 13. My manager reviewed objectives for improvement with me. 14. My manager obtained accurate information about my performance. 15. My manager allowed me to discuss how my performance was evaluated. *Item was reverse scored
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Kevin M. McNeilly Marian B. Lawson Companies are in the midst of transition, either because of downsizing to reduce costs or re-engineering to improve quality; and the sales force is a key component in these changes. This study examines the impact of sales representatives’ relationships with their managers during times of change. The results suggest that representatives with greater trust in the sales manager are more accepting of the anticipated changes, especially in the longer run. Furthermore, managers interested in building trusting relationships with their representatives should be particularly concerned about using fair performance evaluation procedures and making joint sales calls with their representatives. © 1998 Elsevier Science Inc.
Address correspondence to Dr. K. M. McNeilly, Department of Marketing, Richard T. Farmer School of Business, Miami University, Oxford, OH 45056.
Industrial Marketing Management 28, 37–49 (1999) © 1998 Elsevier Science Inc. All rights reserved. 655 Avenue of the Americas, New York, NY 10010
INTRODUCTION That organizations are changing is almost old news these days. In fact, a recent American Management Association research report suggests that corporate America’s anthem should be Bob Dylan’s “The Times They Are A Changing” [1]. The types of changes range from the most radical form, where the very essence of the organization’s purpose and product is redefined, to more evolutionary changes, where processes and priorities are adapted to increase organizational efficiency and effectiveness. This special issue of Industrial Marketing Management reflects the increasingly central role the marketing and sales areas have to play in successfully implementing organizational change. As Wotruba [2] recently noted in this journal, “Whether now or in the near future, indus-
0019-8501/99/$–see front matter PII S0019-8501(98)00021-2
trial selling in all firms will experience major changes” (p. 328). Many of these changes are related to the customer orientations industrial firms are adopting [2, 3]. While customer-focused strategies have dominated the literature on consumer goods and services for some time, it is a more recent emphasis in industrial settings. We suggest that recognizing the importance of the sales force during re-engineering or other types of organizational change is long overdue. Sales representatives are well known to be the critical link to the customer, occupying the “boundary position” in organizations [4, 5]. During periods of organizational change, it is essential to maintain this link—not only to sustain sales, but also to help the customer adapt to changes in the company’s products and processes. Representing the company during organizational transitions often means explaining the changes, correcting misunderstandings, addressing rumors, and reassuring the customer that service and delivery will not suffer as the changes are implemented. Unfortunately, it also often means apologizing when the new systems are not immediately effective, and intervening when a system has failed. Managing customer relationships is difficult at best during organizational changes. It becomes almost impossible when the sales representatives themselves are anxious, uncertain, and/or negative about the changes. Some level of uncertainty, of course, will almost always accompany changes in products or systems; even under the best circumstances, the details are seldom fully worked out before the customer is involved. As such, what the sales force is often asked to represent is a concept—and a confidence in the organization’s ability to succeed in implementing it. The sales representative’s attitude about the value of the change, and the capability of the company, thus become central ingredients for sustaining effective customer relationships during periods of change. As the sales representative is the organization’s link to the customer, the sales manager is often the representative’s primary link to the company. The representative’s
KEVIN M. MCNEILLY is Professor of Marketing in the Department of Marketing, Richard T. Farmer School of Business at Miami University in Oxford, Ohio. MARIAN B. LAWSON is Associate Professor of Management in the Department of Management and Marketing, College of Business, at North Kentucky University, Highland Heights, Kentucky.
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attitude toward, and confidence in, organizational changes would be expected, at least in part, to be a function of trust in his or her manager. Effective management of a sales force during times of change requires understanding the importance, and difficulties, of the role the sales representatives play—and special attention to maintaining an effective managerial relationship with the representatives on whom the company depends. In this article, we present a study that examines the connection between sales representatives’ attitudes toward company changes, and the level of trust in their managerial relationships. The research setting is a Fortune 1000 company that has recently initiated changes to re-engineer the reps’ jobs, and the respondents are more than 350 members of the industrial sales force whose jobs are directly affected. We explore how the sales reps’ reported trust in their sales manager is related to their attitudes toward the changes, and factors that contribute to their levels of trust. The relationship between managerial trust and attitudes toward change does not appear to have been previously addressed in the limited field research on organizational change. In proposing and empirically investigating these relationships, we hope to contribute to the understanding of managing in times of change, and to highlight the importance of the managerial behaviors that sustain their sales representatives’ trust during the turbulence of change. In the following section, we first review some general issues related to managing during change, and propose a model of factors influencing representatives’ trust in their managers, and the relationship between that trust and the representatives’ attitudes toward company changes. We then present the research, and discuss the managerial implications of our findings.
MANAGING IN TIMES OF CHANGE By definition, organizational change is stressful [6]. Change is also threatening to many people. There are many quite rational explanations for why this would be so. Change demands giving up the familiar, often for a vaguely defined alternative. Uncertainty is an inherent characteristic of organizational change, and recent business activities provide associations with change that suggest its effects are not likely to be positive. For example, organizational announcements of efforts to become “leanand-mean” are widely recognized as portending lay-offs
The bottom line is that managing through times of change means being a familiar and credible source to the sales representatives. [7]. A sense of job security is often an early casualty when a company announces a “strategic change.” To be sure, some people seem to thrive on change. Others, however, appear to have a constitutionally low tolerance for the uncertainty and ambiguity of change [8, 9].1 Organizational consultant Price Pritchett [10] applies the “20-50-30 rule” to any population confronting change: 20% will be change-friendly, 50% will be neutral, and “the remaining 30% are the resisters” (p. 13). While Pritchett encourages managers to give more attention to the 70% that “are carrying the load” (p. 13), the fact remains that in any group of sales representatives, you can expect a wide range of responses to any changes—all of which must be managed. Beyond resistance to change in general, specific changes may be seen to threaten the very systems under which sales representatives have successfully earned their living. In fact, today’s organizational changes often entail new structures and programs that alter the very nature of the employment relationship. The deal between the employee and the organization, the “psychological contract,” is thus up for renegotiation [11]. Referring to the terms of employment as a “personal compact,” Professor Paul Strebel, Director of the Change Program at the International Institute of Management Development, recommends making revisions to the formal, psychological, and social dimensions of personal compacts an explicit aspect of any change process [12]. A systematic change program, however, presumes an organizational development sensitivity that may be outside the experience of most sales and marketing managers trying to navigate through the turbulence of change.
1 Over the past 35 years, there has been periodic social science research on “tolerance for ambiguity” as a personality trait, and its application to issues in organizational behavior. Although not conclusive as a predictor of specific behaviors, it is generally accepted that people have varying levels of comfort with uncertainty and change [8, 9].
A more typical organizational response to change is likely to be “threat rigidity” [13]—the familiar experience of having senior management tighten controls and cut off communication when it is needed the most. While this may be frustrating for those caught in the middle, Larkin and Larkin [14] argue that more communication of values and visions from executives is exactly what “frontline employees” do not need. What they do need to know about change is specific information relevant to their work, communicated directly by the organizational representative whom they know the best, and who knows the most about their work—“a familiar and credible source” ([14], p. 104). For sales representatives, who fills this description better than their sales manager? The bottom line is that managing through change means attending to the basic management tasks of being a familiar and credible source to the sales representatives. These “basic tasks” are, of course, easier said than done. While we will not presume to review the considerable literature documenting the difficulty and complexity of being an effective manager, it should be noted that the inherent difficulties of sales management can be expected to multiply when the tensions of change are strong. The future is often as uncertain for the manager as it is for the representatives—but the manager is “supposed to know,” and silence can be interpreted as withholding information. During such times, it is critical that the lines of communication with the sales representatives be open and active—even when the message is “I don’t know.” Obviously, the time for managers to begin developing credibility with representatives is not amidst the dynamics of change; it must be established over the course of the managerial relationship. We argue, however, that a credible managerial relationship is crucial to sustaining a positive sales force during the uncertainty and turbulence of organizational change. Whether this means helping a representative understand shifts in job descriptions, or working through the details of a new product line, or explaining re39
FIGURE 1.
Trust and attitudes toward organizational change.
defined territories, the message is often that the old and familiar is being replaced with the new and uncertain. In many instances, the sales manager is, in effect, saying to the representative, “trust me.” We suggest, therefore, that how positively a sales representative responds to organizational changes will be, at least to some extent, influenced by how much trust there is in their relationship with their managers. The framework and research presented in the following sections addresses two questions with respect to managerial relationships and organizational change: (1) how is this trust related to sales representatives’ attitudes toward organizational changes?, and (2) what factors are important in developing sales representatives’ trust in their managers? The relationships we propose are summarized in Figure 1; the perceptions and attitudes of interest are those of sales representatives. REPS’ TRUST IN MANAGERS AND ATTITUDES TOWARD ORGANIZATIONAL CHANGE As we have argued, a sales representative’s attitude about an organizational change can have important implications for how positively s/he is able to communicate that change to the customer. If representatives are personally threatened by, or negative about, a change, they are unlikely to promote it actively to the customer. This may be obvious in cases where the change directly affects products, or procedures that involve the customer. Many of the changes marketing organizations 40
are currently implementing, however, focus more on internal systems (e.g., electronic communication and ordering, technological sales assistance, etc.). These types of changes often include redefining organizational processes or responsibilities that may be less visible to the customer at the outset, but have more immediate impact on representatives. The effects on customer relationships can thus be more subtle, but nonetheless important. Organizational changes tend to be complex, and open discussions between managers and sales representatives are needed to help sort out their implications [15]. Such conversations are more likely, of course, if the representatives trust their managers to fully and honestly discuss with them what is known (and admit to what is not) about changes. Although discussions may not eliminate the anxiety of the unknown, they allow the representative and manager to confront the uncertainties together, and develop strategies for dealing with them, minimizing the likelihood of negative spillover of anxieties into customer relations. As we have noted, people will vary in their feelings about change in general; some will be predisposed to embrace it, and others will find change inherently aversive. Sales representatives’ general change orientations, therefore, will likely color responses to a specific organizational change. There may also be several levels of feelings or attitudes about any given organizational change. For example, confidence in their sales unit’s abilities to successfully implement a new system may differ from
The sales manager is not only the “human” face of the organization in presenting changes, but also the implementer. representatives’ assessments of the new system’s value to the company. Distinctions also may be made about a change on the basis of a time horizon. While sales representatives may agree with the intended long-term effects of a change, they may be wary of the turbulence that will accompany the changes in the near term. Thus, as our model in Figure 1 suggests, we expect sales representatives’ attitudes toward organizational changes to reflect, at least to some extent, their level of trust in their sales manager. The manager is not only the “human” face of the organization in presenting changes, but it is the manager who will be most directly involved with the representative in implementing them. Trust in the manager, therefore, should boost representatives’ confidence in organizational capability, and free the sales force to represent positively the changes, and the company, to the customer. Thus, we hypothesize: H1a: Reps who have more trust in their sales managers are more likely to have confidence in their unit’s ability to implement organizational change programs. H1b: Reps who have more trust in their sales managers are more likely to expect a favorable outcome from organizational change programs in the short term. H1c: Reps who have more trust in their sales managers are more likely to expect a favorable outcome from organizational change programs in the long term.
IMPORTANT FACTORS IN DEVELOPING TRUST IN SALES MANAGERS Building Trust Issues of trust are increasingly being recognized as critical to organizational success, especially in times of re-engineering [15, 16]. Nevertheless, there seems to be widespread agreement among organizational consultants that trust in management is at an all-time low [15, 17, 18]. In the marketing literature, the interest in trust has
primarily focused on various aspects of buyer–seller or principal–agent relationships [19–21]. There has only been limited attention thus far, however, to the issue of trust in sales–managerial relationships [4], which is the interest here. We are specifically interested in what a manager can do to encourage a sales representative’s trust. From the growing literature on organizational justice, we know that employees’ perceptions of fairness in the employment context are important influences on their work attitudes. At the relational level, we would expect whether or not a representative’s feelings that s/he has been treated fairly by the manager to influence his or her trust of that manager. We also suggest that the sense that their managers are familiar with the representatives would influence levels of trust. Fairness Whether an employee perceives his/her employment situation to be characterized by fairness is an area which has been widely researched in the past decade, under the heading of organizational justice [22–27]. This literature typically distinguishes between fairness related to the personal outcomes (distributive justice) and fairness related to organizational procedures (procedural justice) [25]. While trust is a characteristic of a relationship with another person, perceptions of fairness are characteristics of outcomes and processes—and the negative consequences of unfair treatment may be particularly powerful for customer contact employees, such as sales representatives [8]. In sales organizations, it is typically the sales manager who interacts most directly with the sales representatives, and who is seen to be responsible for many of the representatives’ “outcomes,” such as their account assignments. It is also the sales manager who interacts with the representatives in implementing such formal organizational “processes” as performance evaluations. As such, it is as part of the relationship with his/her manager 41
Whether trust influences fairness or the reverse, fairness is seen as one of the key components of trust. that the sales representative will experience fair, or unfair, treatment. Whether trust influences the fairness perceptions, or perceived fairness results in trust, is not clear [28]. Fairness, however, is seen to be at least one of the critical components of trust [17]. We propose that when representatives consider their managers to have established a standard of fairness in the course of performing critical management tasks, such as account allocation and performance appraisal, they will be more likely to trust their managers. Thus: H2: Sales managers who are seen to be fair are more likely to be trusted.
Familiarity We also suggest that managers who are seen to be familiar with their representatives are more likely to be trusted. This “familiarity” standard is used to assess the extent sales representatives feel that their managers really know them, and have reason to believe that their manager is aware of their style, efforts, and special difficulties with accounts. Given the independent nature of many industrial sales organizations, sales representatives may, in fact, have very little contact with their managers, and may not feel that their problems are understood. We would expect there to be less trust, both in the manager and in the manager’s decisions and explanations, under these conditions. One aspect of familiarity is simply the amount of time the representative has actual contact with the manager. The frequency with which the manager accompanies the representative on sales calls is also an indication of familiarity with the representative’s selling and account management techniques, and the particular complexities of some accounts. We would expect there to be positive relationship between the representatives’ sense that their managers are familiar with their work, and the level of trust in their manager. We hypothesize: 42
H3: Sales managers who are seen to be familiar with their reps are more likely to be trusted.
In the following section, we present a study conducted to examine the nature and scope of the relationships depicted in Figure 1. The focus of the model is the sales representative’s trust in his/her manager. We propose that perceived fairness and familiarity influence trust, and that trust in the sales manager will influence the sales reps’ attitudes toward the three aspects of organizational change. METHODOLOGY This study is a part of a research project investigating managerial issues within the industrial sales organization of a Fortune 1000 corporation. The company operates primarily in the U.S. printing and publishing industry, and customers include a broad variety of businesses and not-for-profit organizations throughout the United States; the marketing and sales functions are organized geographically. Sales representatives are dispersed across the United States in six regions (Northeast, Mideast, Southeast, Midwest, Northwest, and Southwest). Sales managers supervised an average of 11 reps (range: 5–18), and joint sales calls were considered to be a part of regular sales management activities. Like many U.S. firms, this company has been assessing strategies and planning organizational changes to respond to its changing competitive environment. Although the company had not implemented any radical changes, such as mergers or business spinoffs, incremental adaptations had been introduced in various parts of the organization during the past few years. At the time of this study, corporate headquarters had recently announced a “reengineering program” which would change the nature of some product offerings and shift the responsibilities of the sales representatives. This program was the first significant change to directly impact the sales force.
Data Collection and Sample For this study, surveys were sent to all U.S. sales representatives listed as full-time employees of the company. A survey was mailed to each representative’s home address, with a cover letter from the vice president of sales asking for their voluntary participation in the study. A stamped envelope addressed to the researchers was also provided for the return of the surveys. Two weeks later, a follow-up letter was sent out. Of the 693 surveys distributed, 358 usable surveys were returned, resulting in a response rate of 52%. The average age of the respondents was 38 years (range: 22–63). Most of the respondents (68%) had graduated from college and about one-quarter were female (26.3%). The average sales experience at the company for this population was 10 years (range: 1–40 years), and the average time working for their current sale manager was three years. These representatives’ annual sales volume averaged $835,000 (range: 0 to over $4.5 million). The characteristics of these respondents are consistent with a profile of the total sales force of this company. Measures The nine research variables used in this study include three change attitude scales, a measure of general orientation to change, a scale measuring the sales representatives’ trust in their managers, two measures of fairness (procedural and distributive justice), and two measures of familiarity. Each is described below, and all scales included in the study are reproduced in Appendix 1. Descriptive statistics and internal consistency coefficients (Cronbach’s alpha) for multi-item scales are included in Table 1. CHANGE. The set of questions measuring reps’ attitudes toward change was developed specifically for this study. In examining the change literature it seemed appropriate to consider the following issues in developing scales measuring change: personal and organizational adaptability to change, personal and organizational results from change, and recognizing that changes can be short- or long-term in terms of implications and results. The items asked the representatives to assess changes of the type the company had recently announced, in terms of their confidence in their own sales unit’s ability to handle the changes, and their beliefs about the shortterm and long-term effects of the changes. A single item, change orientation, was used to assess the respondent’s general orientation toward change; this item asked the re-
TABLE 1 Descriptive Statistics for Study Variables
Variable Unit change Short-term change Long-term change Change orientation Trust in sales manager Distributive justice Procedural justice Personal contact Joint sales calls
Mean
Standard Deviation
No. of Scale Items*
Coefficient Alpha
4.37 4.22 5.40 5.35 4.84 4.80 5.09 6.16 1.90
1.25 1.17 1.02 1.28 1.63 1.50 1.35 8.11 2.41
2 6 6 1 6 4 15 1 1
0.775 0.827 0.860 NA 0.936 0.912 0.967 NA NA
*Responses to all items, except Personal Contact and Joint Sales Calls, were on a seven-point scale where 1 5 strongly disagree and 7 5 strongly agree.
spondent the extent to which s/he agreed with the following: “Although change can be upsetting, it usually does more good than harm.” This variable was used as a control variable in the regression analyses on the relationship between trust and attitudes toward organizational changes. TRUST. The six items in the “trust in manager” subscale of the “reciprocal trust” measure used by Lagace [4] comprised the sales representatives’ trust in manager variable. FAIRNESS. The items included in the two fairness scales were adapted from those developed by Folger and Konovsky [24]. The first measure included four items asking the representatives to assess how fair they considered their account allocations to be. These items addressed the fairness of personal outcomes, generally identified as distributive justice. The second scale addressed perceived procedural justice. This scale included 15 items that asked the representative to describe the processes their managers used in conducting their most recent performance appraisals. FAMILIARITY. Two single items were used to indicate the manager’s personal familiarity with the representatives. The first, personal contact, simply asked the representatives to estimate the average hours per month they spent “face-to-face” with their managers. For this item, responses are reported in hours. The second, joint sales calls, asked the representatives, on average, on how many sales calls per month their manager accompanied them. The responses to this item are reported as the number of calls per month. ANALYSES AND RESULTS As Table 1 shows, the reliabilities for the scale variables range from 0.77 to 0.96, well within acceptable 43
Sales reps believe an open, interactive, system of evaluation does build trust with their sales manager. limits [29]. The intercorrelations among the study variables are reported in Table 2. Within similar variables, correlations averaged 0.263, with a range from 0.138 to 0.409, indicating acceptable levels of multicollinearity for a study of this type. Table 3 summarizes the results of the four multiple regression analyses that were conducted to address our research questions. The first three regression analyses assessed how trust in the sales manager is related to the representatives’ attitudes toward organizational changes. We performed a regression analysis on each of the variables measuring representatives’ attitudes toward organizational changes: unit confidence, short-term effects and long-term effects, while controlling for the effects of the representative’s general orientation toward change. As Table 3 reports, the more trusting the relationship between the sales manager and the rep, the more accepting they will be of change. In combination with the control variable (change orientation), trust in the sales manager explained 12% of the variance in the reps’ confidence in the unit’s ability to implement change; 6% of the vari-
ance in the reps’ accepting short-term changes; and 15% of the reps’ attitudes of long-term change. In the remaining analysis, the representatives’ trust in manager was the dependent variable, and two measures each of fairness and of familiarity were entered, together, as the independent variables. The results indicate that this set of independent variables explained over 62% of the variance in trust in manager, and procedural justice and joint sales calls were statistically significant.
DISCUSSION Our study measured sales reps’ attitudes about company changes that were planned to be implemented over the next few years. We looked at change along three dimensions: beliefs about the unit’s ability to handle the planned changes, and beliefs about the short- and longterm effects of these changes. We measured trust by asking reps to indicate the extent to which they trusted their sales manager, and fairness was assessed by asking reps
TABLE 2 Correlation Matrix Variable Names Attitudes toward change Unit change (V1) Short-term change (V2) Long-term change (V3) Change orientation (V4) Trust in manager (V5) Fairness Distributive justice (V6) Procedural justice (V7) Familiarity Personal contact (V8) Joint sales calls (V9)
V1
V2
V3
0.198** 0.232** 0.177** 0.321**
0.409** 0.162** 0.197**
0.289** 0.282**
0.124*
0.134* 0.312**
0.096 0.177**
0.238** 0.257**
0.153** 0.148**
0.074 0.101
0.145** 0.079
**Correlation is significant at the 0.01 level. *Correlation is significant at the 0.05 level.
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V4
V5
V6
0.003 0.086
0.410** 0.773**
0.472**
0.054 20.016
0.275** 0.315**
0.242** 0.138*
V7
V8
0.215** 0.217**
0.420**
V9
TABLE 3 Regression Results Dependent Variable Unit change Short-term change Long-term change Trust in manager
Independent Variable
Hypothesis
Regression Coefficient
Standard Error
F
R2
Trust in manager† Trust in manager† Trust in manager† Distributive justice Procedural justice Personal contact Joint sales calls
H1a H1b H1c H2
0.304* 0.180* 0.250* 0.042 0.713* 0.057 0.131*
0.039 0.038 0.032 0.042 0.047 0.008 0.025
24.295 10.646 29.331 137.28
0.123* 0.058* 0.145* 0.625*
H3
*Correlation is significant at the 0.01 level. † Regression model controlled for rep’s change orientation (significant in all four equations). Incremental R2 contributed by trust in manager is 0.092, 0.027, and 0.061, respectively.
to indicate whether accounts were allocated equitably (distributive justice) and whether the process of performance appraisal was unbiased, open, and helpful (procedural justice). Together, these measures indicate how difficult or easy it will be to get planned changes initially accepted by the reps. Although not conclusive, our results provide interesting insights into these issues. It should be noted that this is an initial investigation of the relationships depicted in Figure 1. In assessing these results, it is important to consider the nature of the organizational changes being implemented, and the strategy of incremental change that the company had adopted. The results might be quite different in organizational environments where change has been more radical, or where there is a recent history of negative experiences with change. Clearly, research in a cross-section of settings is needed to assess the generalizability of our findings. We offer this study as a preliminary examination of the proposed relationships, and encourage further research in this area. In terms of the first issue, we hypothesized that representatives’ attitudes toward organizational changes would be influenced by their trust in their sales managers. All of the analyses examining this relationship provide preliminary support for this argument; higher levels of trust were associated with more positive attitudes toward the changes. This can be seen in the regression analyses (Table 3), as well as in Table 4, where we show average attitudes toward change for each of four levels of trust. The first dependent variable, unit confidence, measured the representatives’ confidence in their work unit’s abilities to implement pending organizational changes. The results show that the more the sales reps’ trusted their manager the more optimistic they were about the ability of their unit to implement change. This is not surprising since the implementation of the company changes
was to be facilitated by the manager. The second and third dependent variable measured attitudes toward the effects of change in the long and short run. The results show that sales reps indicate greater confidence in the benefits of change over the long run and that trust has more of an impact on long-run attitudes. As discussed earlier, transitions do cause problems and concerns, but the assumption is that this will pass; and this is reflected in the different results for short- and long-run change. We were initially somewhat surprised, but encouraged, by these differences in time horizons. The minimal influences on expectations about the short-term effects suggest a realistic view of organizational change—that even if changes are seen to be beneficial in the long term, such benefits are seldom immediately realized. In fact, the difficulties of implementing changes may override any benefits in the short run. Thus, even when levels of trust in the managers are high, the representatives are not very optimistic about short-term effects of change. The goal, of course, is that the changes will be seen as attractive enough in the long run to make the short-term turbulence worthwhile. For the sales representatatives in this study, more positive attitudes about the long-term effects of the changes are associated with higher levels of trust in their sales managers.
TABLE 4 Trust in Sales Manager and Attitudes Toward Change
Levels of Trust Distrust Neutral Moderate High
n
Unit Change
Short-term Change
Long-term Change
89 70 82 112
3.76 4.27 4.64 4.70
3.84 4.23 4.17 4.53
5.06 5.23 5.45 5.74
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Taking a “buckle-up” approach may not be sufficient or effective as reps deal with internal changes of their sales positions. We have also proposed that if reps trust their managers and if they believe their sales managers treat them fairly, they are much more likely to accept their managers’ opinions and follow their lead when change is being proposed. We argued that perceptions of fairness and familiarity would influence the representatives’ levels of trust in their managers. Our data supports this proposition on a general level: higher levels of perceived fairness and familiarity resulted in higher levels of trust. Sales managers interested in building trust with their reps can do so by providing a fair process of appraisal and by making joint sales calls. The results show that the sales reps believe that using an open, interactive, system of evaluation does build trust with their sales manager. Also, managers who actively work with their reps on sales calls can provide evaluative feedback that builds a stronger tie to the manager. However, the way accounts are allocated (distributive justice) did not influence trust in the manager. Statistically, this is not surprising, because (1) there is a strong bivariate correlation (0.77) between procedural justice and trust in manager; and (2) there is also a significant correlation (0.47) between the two fairness variables, procedural justice and distributive justice (which is consistent with the organizational justice literature). While it appears that procedural justice captured the collective contribution of the two justice variables in this case, we would caution against interpreting this finding as indicating that only perceived fairness in performance evaluations is important, and perceived fairness in account allocation is not. The strong correlation between trust and procedural justice also indicates a need for further conceptual and empirical research clarifying the nature of the relationship between these constructs. The average number of joint sales calls also was significant in the regression on trust in the manager. Again, it should be noted that the two familiarity measures, personal contact and joint sales calls, were significantly correlated (0.42), as might be expected. It seems, however, 46
that how the manager’s time is spent (i.e., making sales calls with the representatives) is more important rather than simply the number of hours of face-to-face time spent, in terms of developing representatives’ trust. This may be true because face-to-face time with the sales manager may not always be aimed at improving productivity, while joint calls usually are. We do not intend to assert that perceptions of fairness and familiarity are only important to the development and maintenance of trust during periods of change. Rather, our intent is to highlight the relationship between managerial trust and change attitudes, and to offer insight into managerial activities that can improve a rep’s trust. The importance of context here is that during the turbulence of change, these basic managerial behaviors are likely to be minimized—when, in fact, they may be most needed. MANAGERIAL IMPLICATIONS We began this article by recognizing that change has become a fact of organizational life. In the case of radical change, the message is clearly “what used to be is no more.” Even more subtle changes, however, send a message to organization members that “what is today may not be what is tomorrow.” Perhaps the need for company flexibility, adaptation, and quick responses may be the only thing we can predict about the future with any certainty. From a sales management view, the goal is to develop and maintain a sales force that is both positive about the organization and adaptive to change. Our argument is that this is best achieved through effective managerial behavior. In this concluding section, we attempt to summarize our recommendations to managers who must navigate through the rough waters of change. Recognize that Change Is Hard—and Talk About It! Giving up expectations that change should be painless and that transitions can always be smooth may be a nec-
essary step for all organizational members. Change is not only confusing, but it is inherently stressful. Managers in particular, however, must be aware that their relationships with their representatives can “either add to, or reduce, the amount of felt stress the sales person experiences in the work environment” ([30], p. 256). Managers must seek to reduce the stress of change by maintaining open communications and discussions with the sales representatives—both about the facts of, and the uncertainties surrounding, the change. Taking a “buck-up” approach may not be sufficient or effective as reps deal with internal changes of their sales position. Learning new procedures, programs, and sales roles takes time and success may not be quick, so listening to concerns and talking through these issues can build the necessary trust needed to help reps deal with uncertainty. A corollary here is to remember that people will differ in their reaction to any change. In our research, the control variable, a “personality” variable indicating the sales representatives’ general change orientation, explained significant amounts of the variance in all three attitudes about the organizational changes. There may be little a manager can do about this, beyond recognizing and understanding that responses to change will vary. To the extent a representative looks to the manager for cues on how to perceive a specific change, however, the manager must be sensitive to how the change is framed and communicated [17]. Establish, and Maintain, Representatives’ Trust To maintain open lines of communication, especially during change periods, sales representatives must be able to trust their managers as “familiar and credible” sources. In focusing on what managers can do to build representatives’ trust in them, we have emphasized fairness and familiarity. To the extent that organizational changes often involve new procedures and resource allocations, fairness issues may become particularly salient during periods of change [23]. As Blancero, Johnson, and Lakshman [8] have recently highlighted, the impact of feelings of unfair treatment may be strongest for customer contact employees, where the negative spillover onto customers is most likely. Nothing is worse for morale than when sales reps think they have been treated unfairly. Whether it is real or not, this situation can cause frustration to other reps and reduce customers’ loyalty to the company. Organizational procedures, per se, can be seen to be fair or unfair—but as our study emphasizes, it is how a manager implements the performance evaluation process that
influences the representatives’ trust. This may be especially important to remember during extended periods of change, when procedural details such as performance reviews are likely to be skipped or glossed over. Formal performance evaluations represent opportunities for communicated listening, and understanding, that are essential to maintaining a sense of fairness. So, during times of change, sales managers need to remember to continue to provide feedback about performance and provide an open-door policy to show their interest in being supportive and fair. Familiarity is the other influence on trust we have proposed. Representatives must see managerial input, either about performance reviews or about the effects of organizational changes, as being grounded on a credible understanding of them and their work. In our study, the specific behavior influencing representatives’ trust in their managers was the number of sales calls managers make with the representatives. This is another fundamental management activity that is easily omitted during the turbulence of organizational change, but that provides opportunities to establish, and maintain, credibility and familiarity—and trust—with the sales representatives. As sales managers are asked to handle internal changes which will undoubtedly take time, they need to continue to set some time aside to call jointly on customers with their reps. This activity helps the reps deal with questions by the customer, and shows that the company will continue to support the rep and the customer as these changes are made, and provides an opportunity for both manager and rep to interact. Respect the Managerial Relationship A goal of this article has been to highlight the importance of the sales manager–representative relationship during times of change. Our research demonstrated that sales managers’ behaviors influence the representatives’ trust, and that this trust affects the representatives’ attitudes about organizational changes. We would, therefore, admonish those responsible for re-engineering the sales and marketing functions to respect the relationships that managers have established with their representatives. Organizational changes should be seen as opportunities to build upon, rather than disrupt, the trust of the sales force. REFERENCES 1. Romano, C.: Managing Change, Diversity and Emotions. Management Review 84(7), 6–7 (1995).
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2. Wotruba, Thomas R.: The Transformation of Industrial Selling: Causes and Consequences. Industrial Marketing Management 25, 327–338 (1996). 3. Cravens, D. W.: The Changing Role of the Sales Force. Marketing Management 4(2), 49–57 (1995). 4. Lagace, Rosemary R.: An Exploratory Study of Reciprocal Trust Between Sales Managers and Sales Persons. Journal of Personal Selling & Sales Management XI(2), 49–58 (1991). 5. Rochford, L., and Wotruba, T. R.: New Product Development Under Changing Economic Conditions: The Role of the Salesforce. Journal of Business & Industrial Marketing 8(3), 4–12 (1993).
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APPENDIX 1 Research Variable Scale Items Change Attitude Scales Unit confidence 1. When the changes come, my area will be able to handle them better than other areas. 2. When the changes come, my district will be able to handle them better than the other districts in my area. Short-term effects 1. In the short run, these changes will improve my ability to meet customers’ needs. 2. In the short run, these changes will increase my workload.* 3. In the short run, these changes will decrease my earning potential.* 4. In the short run, these changes will harm my job satisfaction.* 5. In the short run, these changes will improve the company’s efficiency. 6. In the short run, these changes will improve the company’s profitability. Long-term effects 1. In the long run, these changes will improve my ability to meet customers’ needs. 2. In the long run, these changes will increase my workload.* 3. In the long run, these changes will decrease my earning potential.* 4. In the long run, these changes will harm my job satisfaction.* 5. In the long run, these changes will improve the company’s efficiency 6. In the long run, these changes will improve the company’s profitability. Trust in Sales Manager 1. I feel free to discuss work problems with my manager without fear of having it used against me later. 2. I have complete trust that my manager will treat me fairly. 3. If I make a mistake my manager is willing to “forgive and forget.” 4. My manager is friendly and approachable. 5. I can count on my manager for help if I have difficulties with my job. 6. I trust my manager to make quality business decisions. Fairness Distributive Justice 1. The accounts allocated to me provide opportunity for sales growth 2. The accounts allocated to me provide opportunity for income growth 3. The growth potential of the accounts allocated to me is the full amount I deserved 4. The growth potential of the accounts allocated to me met my expectations Procedural Justice Stem: “The last time I had a performance appraisal . . .” 1. My manager was honest and ethical in dealing with me. 2. My manager gave me an opportunity to express my side. 3. My manager used consistent standards in evaluating my performance. 4. My manager considered my views regarding my performance. 5. My manager gave me feedback that helped me learn how well I was doing. 6. My manager was completely candid and frank with me. 7. My manager showed a real interest in trying to be fair. 8. My manager became thoroughly familiar with my performance. 9. My manager took into account factors beyond my control. 10. My manager got input from me before making a recommendation. 11. My manager made clear what was expected of me. 12. My manager discussed plans or objectives to improve my performance. 13. My manager reviewed objectives for improvement with me. 14. My manager obtained accurate information about my performance. 15. My manager allowed me to discuss how my performance was evaluated. *Item was reverse scored
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