Hello, the topic of our lecture is organizational structures. Designing the sales organization structure requires integration of the desired degree of specialization. It also involved such things such as centralization, span of control, management levels, client positions, and staff positions. The principals of specialization are based on the following assumptions; certain salespeople might sell on the certain products or call on a certain customers. Some sales managers might concentrate on training and others on planning. The basic idea, individuals can become experts on concrete tasks leading to better performance for the entire organization. The selling situation affects a strengthening, or weakening, or specialization in the work of the sales department. If sales management wants to focus on specific skills within each selling contexts, then a specialized sales force should be used. If sales management wants to focus on the amounts of selling contacts, a generalized sales force should be used. Centralization of seller sections depends on the answer to the question, who is the decision-maker, the salesperson or his manager? A centralized structure is one in which authority and responsibility are placed at the higher management levels, and trends from transactions to relationships from individuals to teams and from management to leadership are about decentralize orientation. Salespeople and other sales team members must be empowered to make decisions quickly. A specialized structure is the best one there is a high level of environmental uncertainty. It is when salespeople and sales managers must perform creative and non-routine activities when adaptability is critical for achieving performance objectives. Centralization is most appropriate. When environmental uncertainty is low, sales organization activities are routine and repetitive and the performance emphasis on efficiency. In most cases, a small number of clients leads to centralization while a large to decentralization. A Manager cannot make decisions for salespeople when there are a lot of clients. A large number of different sales activities with clients that must be made during the GIL leads to division of labor and specialization in the sales department, and vice versa, when sales activities a few which one person can execute, it is more convenient to use a generalized approach to sales. Span of control refers to the number of individuals who report to each sales manage. Management levels define a number of different hierarchical levels of sales management within the organization. A wide span of control leads to heavily load on the top Manager and can be used when middlemen do the same work. For example, the sales departments have the similar customers who acquires similar goods and sales territories of the departments geographically close. Decreasing the span of control leads to increase in management levels. This is necessary for instance if an organization has geographic sales zones that are very different in many respects. By type of official duties, sales managers are divided into line and staff. Line sales managers are directly involved in the selling generating activities with the firm and made perform any number of sales management activities. They're responsible for the final result of the sales department volume or sales. Staff sales managers do not directly manage people, but they are responsible for certain functions like recruiting and selecting, training, marketing research, blending, forecasting etc cetera but they are not directly involved in the sale generating activities. Now let's talk about the types of organizational sales structure. You [inaudible] a specialization in terms of sales functions, the classical structures focused by markets or customer, by product, and geography. Geographical structure the salesperson works with all types of clients for all types of products in the geographic area assigned to him. Product or specialized structure, the salesperson works with all types of clients for a specific products in a geographic territories. Market or by customer segment the salesperson works with a specific type of customer for all types of products in all geographic areas. The choice of the appropriate organizational structure from the reviewed once depends on how complex the range of products offered is and how different are the needs of customers. They are usually expressed in the standard set of products they purchase. Let's look at the various principles of sales management and types of organizational structures on the sales department. We will take ABC Company as an example. They ABC Company sells office equipment such as printers and furniture and office supplies such as paper and pencils. They sell it to commercial and government accounts. The firm employs 200 salespeople who operate throughout the United States. The sales people perform various activities that can be characterized as being related either to sales generation or account servicing. Let us consider the geographical organizational structure for the ABC Company. This is the least specialized and most generalized type of salesforce. Salespeople are typically assigned a geographic area and are responsible for all selling activities to all accounts within this area. There is no attempt to specialize by product, by market, by function. Since there's no specialization, there is no duplication of effort of salespeople in this structure. The structure in this example is rather to one and thus somehow centralized. There are four levels of flying sales management with relatively small span of control. National sales manager, original sales manager, zone sales managers, and district sales managers. No sales management specialization, the sales training staff position. Because this stuff position is located at the national sales manager level, training activities tend to be centralized. Product sales organization, this organization structure indicates two levels of product specialization. There are two separate sale forces. One sale force specializes in selling office equipment and the other specializes in selling office supplies. Each of the specialized sales forces performs all selling activities for all types of accounts. The separate sales forces are each organized geographically, which means that there will be duplication in the coverage of geographic areas. In some cases, the salespeople from different sales forces may call the same accounts. There are only three levels of lines management with wide span of control and our example. National sales manager, product sales manager, and district sales managers. This structure has no staff physicians and thus no management specialization beyond products specialization. Market sales organization. The objective of market specialization is to ensure that salespeople understand how customer use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customer needs better. The market sales organization shown for the ABC Company focuses on account types. Separate sales forces have been organized for commercial and government accounts. Salespeople perform all selling activities for all products but only for certain accounts. The commercial account sales force is much more centralized than a government accounts sales course. This centralization is due to more line management levels, shorter span of control, and a specialized sales training staff position functional sales organization. Most in this situations require a number of selling activities. So there may be interested in having salespeople specialized in performance certain of these required activities and this structure a field sales force performs sales generating activities and telemarketing Sales force perform account service activities. Overall the sales force will cover the same geographic areas and the same accounts. The use of telemarketing helps to reduce the cost of this duplication of effort. The more routine and repetitive activities will be performed by the insightful marketing sales force, the more creative and non-routine sales generating activities will be performed by the outside field sales force. Major or key account organization. The term major account is used to refer to a large and complex important accounts that should receive special attention from the sales organization. Some firms gives the term key accounts or strategic accountants stat. We'll discuss various aspects of sales to key accounts later in this lecture. Different organizational structures have their advantages and disadvantages that quite complex hybrid organizational structures and leads to on geographic product markets function and key account organizational structures. Sales management must develop the appropriate cells organizational structure for its particular sailing situation.
