Effectiveness of Cross-functional Integration Mechanisms in Relationships between Sales and Marketing Ken Le Meunier-FitzHugh Graham R. Massey Nigel F. Piercy

Agenda Background to the Research Theoretical Framework Hypothesis Development Methodology Results

Background to Research The effectiveness of cross-functional working relationships (CFRs) between sales and marketing is of considerable academic and practitioner interest. Where there is sales and marketing conflict the CFR is likely to be less effective and business performance can suffer. Given that the quality of sales and marketing CFRs has performance implications, improving these CFRs is an important objective for senior management, and is the focus of this study.

Background to Research To improve working practices between functional areas many organisations ‘employ lateral linkage devises or structural coordination mechanisms to connect relatively autonomous functional units’ Some of the factors affecting sales and marketing CFRs have been considered in academic literature, including Informal communications Personal characteristics of sales and marketing personnel Trust between managers Organisation’s incentive systems

Background to Research To date, however, little work has been done to test the effects of formal and structural integration mechanisms on the operation of the sales and marketing interface. We draw primarily on the theory relating to departmental “thought worlds.” As Dougherty’s (1992) landmark article on innovation in large organisations notes, Departments can evolve into distinct thought worlds with different funds of knowledge and systems of meaning, and use different interpretive schemes to make sense of their working activities.

Background to Research In this research we examine six integration mechanisms highlighted in literature: Cross-functional training Cross-functional project teams Cross-functional meetings The opportunity for job rotation The location of sales and marketing staff The structure of the sales and marketing units within the organisation

Background to Research We explore the effects of these mechanisms on two relationship outcome variables Sales and marketing conflict Sales and marketing collaboration Which are proxies for the level of “integration” between the two departments. These mediators are in turn, linked to our dependent variable, Business performance.

Theoretical Framework Integration Mechanisms

Methodology The research was carried out using a mail survey of large organisations (turnover of more than £11.2 million) operating in B2B markets in the United Kingdom. A pre-tested, self-administered questionnaire and letter were addressed to the Managing Director/Chief Executive (CEO) of each organisation in the sampling frame. A sample of 1,000 organisations was randomly selected for inclusion in the survey. A response rate of 22.3% was achieved, of which 7.7% were not usable for various reasons.

Methodology

Results The results for the structure of the sales and marketing units suggest that these two groups are more likely to be separate, rather than in the same department. Therefore, the preconditions exist for thought worlds to be a problem.

Results Not all of the integration mechanisms are equally effective. Those with important effects on collaboration are the use of cross-functional teams, meetings, the opportunity for job rotation, and the structure of sales and marketing, all of which increase sales/marketing collaboration. Our results confirm collaboration’s strong positive link to business performance. One conclusion is that the managerial pursuit of sales and marketing collaboration is vital because it has wider performance implications for the organisation rather than simply interdepartmental effects.

Results Our results also reinforce the necessity of managing sales and marketing conflict as this affects collaboration. We would argue that these integrating mechanisms should stimulate effective interaction to reduce thought world differences, and increase sales and marketing integration. Integration mechanisms are means by which senior managers can provide appropriate contexts for effective sales and marketing interaction, via structural changes, and formalised initiatives such as decentralisation via cross-functional meetings and teamwork