How Does Organization Culture Act As A Driver Of Competitive Advantage?

[We’re pleased to welcome back Pankaj M. Madhani of ICFAI Business School (IBS). Pankaj cbrpublished an article in Compensation & Benefits Review entitled “Sales Organization Culture, Compensation Strategy and Firm Valuation.” Notes from Madhani:]

The culture of sales organization is comprised of fundamental principles and beliefs that are shared by its members and hence determines the norms that dictate how sales employees should think and behave. In addition to this, compensation systems promote behaviour of sales employees that ultimately becomes dominant behaviour in the sales organization. Thus, many sales organizations today are focusing on their culture as a strategic tool, deciding what it should be, aligning with strategic goals, business strategy and sales compensation design. Sales organization culture is defined both in terms of its causes and effects such as process-oriented culture and outcome-oriented culture, respectively.

A process-oriented culture focuses on behavior controls and emphasizes sales behaviors, whereas an outcome-oriented culture focuses on outcome controls and emphasizes sales outcomes. This research provides various frameworks and models for establishing relationship between organization culture and compensation structure and deriving its impact on sales performance. Study also provides numerous illustrations to calculate optimal compensation structure and corresponding organization culture to achieve maximum valuation of sales organization. An effective sales performance supported by an appropriate compensation strategy and culture of sales organization plays a significant role in determining financial performance, enhancing valuation of the sales organizations and increasing competitive advantage in the market place.

 

Don’t forget to sign up for email alerts for new articles from Compensation and Benefits Review here. 
This entry was posted in Business, Management, Management Theory, Organizational Behavior, Organizational Research, Organizational Studies, Strategy, Uncategorized by Cynthia Nalevanko, Editor, SAGE Publishing. Bookmark the permalink.

About Cynthia Nalevanko, Editor, SAGE Publishing

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 1500 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, Washington DC, and Melburne, our publishing program includes more than 1000 journals and over 900 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s