THE PROBLEM SOLVING APPROACH OF INTERNATIONAL SALESPEOPLE: THE EXPERIENCE EFFECT Alma Mintu-Wimsatt and Jule B. Gassenheimer Sales research has established the importance of experience in buyer—seller interactions. While this is intuitively appealing, the experience variable has had minimal attention at the international level. This study explores the relationship between experience and the problem solving strategy of international salespeople. Specifically, experience is defmed based on three popular measures used in the extant literature: tenure with the organization, general sales experience, and international sales experience. Results indicate that a U-shaped relationship exists between tenure in the organization and problem solving. A plateau effect was identified between sales experience and problem solving early. These results run counter to findings in domestic studies assessing experience and negotiation encounters.
Job postings for international sales positions typically include qualification statements such as "international experience required" or "at least five years' international experience." In fact, for most employers, international experience is mandatory before a prospective applicant is seriously considered. This emphasis is based on the assumption that performance is significantly affected by salespeople's previous experience. Generally, experienced salespeople are more knowledgeable about their product, the needs of their customers, and the organization's expectations. However, in an international business setting, experience level becomes more critical since familiarity with the cultural nuances of partners from different countries often "make or break" deals (Honeycutt, Ford, and Kurtzman 1996). Selling in an international context often involves more complex and delicate situations that can accelerate a salesperson's breadth of experience (Bertagnoli 2001). Seasoned negotiators have the necessary knowledge to prepare themselves for the business encounter (Frank 1992; Rentz et al. 2002) and realize that international sales cycles are much longer and handled differently in other countries (Bertagnoli 2001; Li and Labig 2001). As a result, companies place a premium on "[international] sales experience" for those involved in cross-cultural transactions.
Alma Mintu-Wimsatt (Ph.D., University of Kentucky), Professor of Marketing, College of Business, Texas A&M Commerce,
[email protected]. Jule B. Gassenheimer (Ph.D., University of Alabama), Professor of Marketing, Crommer Graduate School of Business, Rollins College,
[email protected]. The authors thank the Editor and the three reviewers for their comments and suggestions. They also thank Andrea Dixon for her comments on a previous draft of this paper.
This paper attempts to further extend our understanding regarding the influence of experience on negotiation within an international context. We reexamine the experience effect on negotiation strategy with the intent of answering the question: "What kind of experience has value and how much experience is enough?" In doing so, we provide recommendations for safeguarding the problem solving approach (PSA) used in international sales encounters. LITERATURE REVIEW Few studies have attempted to capture the influence of experience on negotiations in real or actual international situations despite the importance of experience in international business. For example, monetary stakes tend to be significantly higher; political/diplomatic relationships as well as affiliations may also be lost with one single miscalculation during the negotiation activity; and perhaps, most important, developing relationships between buyers and sellers at an international level is more challenging (Honeycutt, Ford, and Kurtzman 1996; Shamkarmahesh, Ford, and LaTour 2003). To address the void, this study investigates experience and the problem solving approach to negotiation in an international context among industrial exporters. Because of the limited research investigating experience in cross-cultural settings, we use previous domestic U.S. studies as the basis for hypothesis development. The results should shed new insights on the generalizability of domestic findings to international salespeople.
NEGOTIATION STRATEGY: PROBLEM SOLVING APPROACH Among the different strategies in negotiation, the PSA has been the most widely examined due to the success of PSA in fournal of Personal Selling^
Sales Management, woA.yC^sX!^, no. 1 (winter 2004), pp, 19—25.
© 2004 PSE National Educational Foundation. All rights reserved. ISSN 0885-3134 / 2004 $9.50 + 0.00.
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Journal of Personal Selling & Sales Management
establishing long-term relationships (Eliashberg, Lilien, and Kim 1995), especially in cross-cultural business transactions (Dabholkar, Johnston, and Cathey 1994; Hersche, Swenson, and Verbeke 1996). The PSA focuses on the behaviors of the other party, using win-win solutions as well as mutually beneficial outcomes to resolve conflict (Cellich 1993; Rubin and Brown 1975). PSA begins from a need perspective where parties seek information from their negotiation partners about their needs and preferences. Negotiators adapt their behavior using informal communication, information exchange, and cooperation in an attempt to reconcile preferences and maximize mutual self-interest rather than intensifying differences (Calantone, Graham, and Mintu-Wimsatt 1998). In the international sales management literature, the practice of adaptive selling parallels the PSA (cf. Hersche, Swenson, and Verbeke 1996). Adaptive selling involves adjusting sales behaviors based on the customer interactions (Robinson et al. 2002; Weitz, Sujan, and Sujan 1986), and includes understanding the needs of customers as well as providing customers with suggestions on which products would fit their needs (Levy and Sharma 1994). Hence, salespeople who adhere to an adaptive selling approach appear to be practicing PSA. Experience Salespeople with prior (sales) experience carry with them sales knowledge as well as a network of colleagues and/or ongoing partnerships from previous negotiation encounters (Schultz and Evans 2002; Shamkarmahesh, Ford, and LaTour 2003), which helps explain the quality of work-related performance and behaviors (Tesluk and Jacobs 1998). For the purposes of this study, experience is defined using three measures: (1) experience associated with one's tenure in the organization (Shoemaker and Johlke 2002), (2) general sales negotiation experience (Gengler, Howard, and Zolner 1995; Thompson 1990), and (3) international (sales) negotiation experience (Cellich 1995; Honeycutt, Ford, and Kurtzman 1996). Using these multiple measures, we investigate the influence of experience on the PSA in international sales negotiations. Sales Negotiator's Tenure with the Organization Tenure is defined as time spent with a particular firm (Dixon, Spiro, and Forbes 2003). Tenure in the organization provides individuals knowledge about the organization and its offerings and helps clarify ideas of how to effectively behave in certain situations (Shoemaker and Johlke 2002). As suggested by the domestic-based sales literature on career stages, negotiators experience a learning curve when becoming a member of an organization (cf. Cron, Dubinsky, and Michaels 1988) and/or becoming familiar with the prod-
uct (Shoemaker and Johlke 2002). Initially, negotiators who have only been with the company a short tijne may be less familiar with the product as well as unsure cif company expectations, policies, and company resources (Dixon, Spiro, and Forbes 2003; Shoemaker and Johike 2002). This limits their ability to display a customer-orientation and to actively engage in PSA (Calantone, Graham, and JN^intu-Wimsatt 1998). Newly hired salespeople may feel less compelled to accommodate their counterpart's concessions fearing limited support from their own company or uncertainty as to how management might respond. As tenure in the organization increases, salespeople become more familiar with the corporate environment, company resources, expectations, and concession boundaries. This familiarity provides the tools to effectively solve problems by adapting to customer needs (Saxe and Weitz 1982; Shoemaker and Johlke 2002). The domestic-based literature also suggests iiat salespeople who continue to stay with the company with limited career advancement first plateau and eventually become disengaged with their progress (Louis 1980; Parasuraman and Futrell 1983). Disenchanted salespeople are less compelled to exert effort and show concern for their customers; key factors in practicing PSA (Cron, Dubinsky, and Michaels 1988). We therefore propose: HI: An inverted U-shaped relationship exists between salespeople's PSA and their tenure in the organization.
Negotiator's General Sales Experience Sales experience is often defined as the "length of time a salesperson has worked in a professional selling position" (Shoemaker and Johlke 2002, p. 121). According to Druckman (1968), expertise and knowledge generated from previous negotiation encounters enhance bargaining skills. Experienced salespeople negotiate more effectively (Alexander, Schul, and McCorkle 1994) as prior encounters provide negotiators with a breadth of knowledge that can be useful in future bargaining activities, enhancing their tendency to use F SA (Bazerman, Magliozzi, and Neale 1985). Thompson (1990) found that previous sales experience improved negotiators' ability to adjust to, and make accurate judgments about, their counterpart's interests. Seasoned negotiators arc more likely to spend more time planning and strategizing behaviors to achieve potentially win-win outcorhes (Peterson and Lucas 2001). These characteristics are critical elements in PSA. Jolson (1974) notes that the above positive relationship exists only to a certain point. As salespeople gain more sales experience, they strive to advance to higher status positions. Those who fail to advance, yet remain in the job, become less motivated and disenchanted with their positions and are less likely to problem solve. We propose that:
Winter 2004 H2: An inverted U-shaped relationship exists between salespeople's PSA and their sales negotiation experience. Negotiator's International Sales Experience Conventional wisdom suggests that the more international sales experience, the more adept the salesperson will be in international sales. Unfortunately, limited research exists that specifically addresses the importance of international sales experience despite the call for international salespeople to familiarize themselves with the culture of their foreign counterparts (Hersche, Swenson, and Verbeke 1996) as well as differences in sales cycles (Bertagnoli 2001). Similar to the inverted U-shaped relationship proposed for domestic-based organizational tenure (HI) and general sales experience (H2), we propose that the infiuence of international sales experience on PSA should be comparable. The uncertainty of an overseas assignment and the lack of exposure to foreign sales inhibit the ability to understand buyer problems and adapt to buyer needs. As familiarity with the sales environment increases so should the ability to use PSA. And, as noted by Bertagnoli (2001), more exposure to selling in international contexts accelerates sales experience. Unfortunately, the uncertainty and obstacles (e.g., cultural differences, travel, time changes, family) inherent in overseas assignments takes its toll. Eventually, the international salesperson experiences some level of "wear out," reducing sales effectiveness (Cellich 1993; Honeycutt, Ford, and Kurtzman 1996). We hypothesize that: H3: An inverted U-shaped relationship exists between salespeople's PSA and their international sales negotiation experience.
METHODOLOGY Sample and Data Collection A sample of American industrial exporters was asked to respond to a survey assessing their own sales negotiation behavior. These exporters had international sales levels of at least $2 million, ensuring that significant interaction with foreign counterparts actually takes place and that they are involved in sales negotiation activities. A total of 283 questionnaires were mailed to American industrial exporters. Returned usable questionnaires totaled 98 resulting in a usable response rate of 34.39 percent. The majority of the exporters (82 percent) reported that their company had at least 100 employees. On average, the respondents were 43.3 years of age with 13.6 years of tenure in the organization, 13.7 years of sales negotiation experience, and 9.6 years of international business negotiation experience. Approximately 44 percent of all the respondents described their positions to be related to sales management.
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Operationalization of Measures The variables relating to tenure in the organization (TENURE), sales negotiation experience (SEXP), and international negotiation sales experience (ISEXP) were based on self-reported information. Respondents were asked to report the number of years related to TENURE, SEXP, and ISEXP. Graham, Mintu, and Rodgers's (1994) PSA four-item scale was modified to measure the extent of problem solving demonstrated by exporters. Three items using a five-point semantic differential scale with opposing adjectives as anchors were included. The items included self-interested versus solving a mutual problem, exploitative versus accommodating, and biased versus unbiased. The Cronbach's alpha of the PSA measure was 0.73. RESULTS H I : To examine the inverted-U effect of tenure (TENURE) on PSA, a quadratic equation using TENURE and TENURE^ as independent variables was calculated. The model with tenure in the organization was significant (i^= 7.7\, p < 0.01), but the signs of the standardized regression coefficients of both TENURE (-2.00, p < 0.01) and TENURE^ (2.22, p < 0.01) were in the opposite direction. Instead, a U-shaped pattern is suggested (i.e., a significant and negative beta along with a significant and positive quadratic term). Therefore, H I was rejected. H2: To investigate the inverted-U relationship of general sales negotiation experience (SEXP) on PSA, a quadratic equation using SEXP and SEXP^ as independent variables was calculated. The model with SEXP was significant {F = 3.88, p < 0.01), but the standardized regression coefficients for SEXP and SEXP^ were in the opposite direction. The regression coefficient for SEXP was not significant (—1.16, n.s.) and the coefficient for SEXP^ {1.44, p < 0.10) was marginally significant. H2 was rejected. H3: To examine the inverted-U effect of international sales experience (ISEXP) on PSA, a quadratic equation using ISEXP and ISEXP^ as independent variables was calculated. The model with ISEXP was not significant [F = 1.31). H3 was rejected. Table 1 reports the results of the regression analyses. Post Hoc Analyses Linear Contrasts To further understand the findings presented above, linear contrasts were examined among tenure and sales experience groups; the two relationships that were found to be significant. The sample was split into thirds for both tenure and sales experience. This is consistent with the analysis con-
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Table I Results of Regression Analyses (Dependent Variable: PSA) Beta
Variable
Variable
TENURE SEXP ISEXP
-2.00** -1.16 -0.70
Quadratic 2.22** 1.44* 0.84
F-Value
Probability
7.54 5.88 1.51
0.00 0.00 0.23
0.14 O.ll 0.03
* * ; > < 0 . 0 1 ; * ; > < 0.10.
Table 2 Linear Contrast—Tenure and Sales Experience Tenure
New
Intermediate
Veterans
Group Size Years PSA Mean
34 20 3.93'
Sales Experience
Low
Medium
High
Contrast
Group Size Years PSA Mean
36
