How Do the Organizational & Management Structures Affect Sales Objectives?
Sometimes organizations are shaped around their goals and tasks, while other times their structures determine how they function. A management and organizational structure can be aimed solely at driving sales while in other cases companies have to experiment to figure out how to create and manage an effective sales force. While there's no one recipe to success, looking at your company's design is a great way to figure out how to better achieve your sales objectives.
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Sales Management
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Organizations which rely heavily on sales and meeting important sales goals -- such as car dealerships and pharmaceuticals -- often make sales a department unto itself and give it a management specific to its needs. The result, at least in theory, is that sales people are managed by people who understand and support sales. Additionally, the department has a manager to advocate for its needs and who can interface with other parts of the company to ensure smooth cooperation and support of sales. In this environment, companies often see stronger sales results.
Integrated Sales
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Instead of making sales a department unto itself, many businesses attach a sales force to other departments. For example, a department which is in charge of a particular line of products may include everyone from managers to designers to salespeople. Making salespeople part of the unit ties them to the information, the concepts and the team's success - which can drive them to better hit targets and objectives. The downside can be that salespeople are then managed by department chiefs who aren't likely to have sales experience and may or may not support salespeople in the ways they need.
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Centralization
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The degree of a company's centralization can have a significant impact on how it structures its budget and sets its sales goals. Companies managed centrally have the tendency to hand down goals from the top based on the overall direction and goals of top leaders. Businesses that give more authority to division and department managers typically rely on them to develop realistic sales numbers based on capacity, resources and events of their departments.
Compensation
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When managers are given bonuses or commission for their departments' or divisions' sales performance, they often raise the bar on sales achievements. Incentive pay has the effect of giving managers personal stake in their departments' outcomes which often lead them to not only ensure company budgetary goals are achieved, but to sometimes set their own departmental goals which exceed those laid out for them by upper management. After all, if they stand to gain more by selling more -- pushing harder suddenly sounds better.
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References
- Photo Credit sales office sign image by Brett Mulcahy from Fotolia.com
