Integration of the Sales Force: An Empirical Examination

TLDR

The study develops and tests a model of integrating personal selling into the marketing function. The model, based on Williamson’s transaction‑cost theory, is a logistic function estimated using data from the electronic‑components industry. Findings show that integration correlates with higher asset specificity and performance‑evaluation difficulty, but not with transaction frequency or specificity–uncertainty interaction, and that the transaction‑cost model better predicts integration than firm size alone, implying firms should be viewed as governance structures.

Abstract

This article develops and tests a model of integration of a marketing function, personal selling. The model, derived from transaction cost analysis as developed principally by Williamson, is formulated as a logistic function, which is estimated with data from the electronic components industry. As expected, integration is associated with increasing levels of asset specificity, difficulty of performance evaluation, and the combination of these two factors. Contrary to the transaction cost model, neither frequency of transactions nor interaction of specificity and environmental uncertainty is significantly related to integration. The transaction cost model improves significantly upon the fit of a simple model relating integration to company size alone. These results suggest that for studying transactions of this kind, it is fruitful to view the firm as a governance structure.