The sales organization is both an orienting point for the cooperative endeavor and a structure of human relationships. It is a group of individuals striving jointly to reach qualitative and quantitative objections and bearing informal and formal relations to one another.
Steps in Setting Up Sales Organization
There are five major steps in setting up a sales organization:
- Defining objectives.
- Determining the necessary activities.
- Grouping activities into jobs or positions.
- Assigning personal to positions.
- Providing for coordination and control.
1. Defining Objectives
The first step is to define the sales department’s objectives. Top management defines the long-term objectives for the company, and from these, the objectives for the sales department are derived.
Top management, for instance, may want the form not only to survive but to achieve industry leadership, develop a reputation for outstanding technical research, diversify its product lines, provide excellent service to customers, furnish investors with a generous return, establish an image of public responsibility, and so on.
Three of the sales Department’s general objectives – all traceable to management’s desire for survival of the firm – may be summed up in three words: sales, profits, and growth.
Qualitative personal selling objectives are independents for long-range planning and must be kept in mind in short term planning.
Quantitative personal selling objectives are required as operating guideposts.
The qualitative objects set for the sales department from the basis of the general policies governing its long-term performance.
The quantitative objectives set are the foundations for which to develop day-to-day operating sales policies and programs.
2. Determination of Activities
Only after determining all necessary activities and estimating the volume of performance is it possible to answer such questions as What executive positions are required? What should be their relationships to other positions? What should be the duties and responsibilities of the person so fill these positions?
Determining the necessary activities and their volume of performance is a matter of analyzing the sales department’s qualitative and quantitative objectives.
Thorough examination discloses which activities must be performed in what volume.
The activities involved in modern sales management are similar from firm to firm, and although individual sales executives think that their operations are different, most differences are more apparent than real.
3. Grouping Activities into Positions
Next, the activities that are identified as necessary are allocated to two different positions.
Activities are classified and grouped so that closely related tasks assigned to the same position.
Each position should contain not only a sufficient number of tasks but sufficient variation to provide for job challenge, interest, and involvement, Only in very large organization, where extreme specialization is practiced, should a position comprise only a single activity, and even here the burden of proof should be on those proposing such a move.
The pressure of the administrative economy is generally strong enough that most position holders are responsible for the number of diversified, although related, activities.
Certain activities are of crucial importance to the success of the sales department, and this has implications for Organisational design.
For example, in a highly competitive field, product merchandising and pricing are assigned to position high up in the organizational structure, Activities of lesser importance are assigned to lower-level jobs.
4. Assignment of Personal to Positions
The next step is to assign personnel to the positions.
This brings up the question of whether to recruit special individuals to fill the positions or to modify the positions to fit the capabilities of available personnel. This is a question that has long been controversial.
Nevertheless, planners prefer, whenever the situation permits, to have individuals grow into particular jobs rather than to have jobs grow up around individuals.
5. Provision for Coordination and Control
Sales executives who have other reporting to them (that is, those with line authority) require means to control their subordinates and to co-ordinate their efforts.
They should not be so overburdened with detailed and undelegated responsibilities that they have insufficient time for coordination.
Nor should they have too many subordinates reporting directly to them this weekend to quality of control and prevents the discharge of other duties. Organizational Change Management: Meaning, Concepts, Nature (Explain).
Thus, in providing for coordination and control, consideration must be given the span of Executive control.
Control and coordination are obtainable through both informal and formal means. Strong leaders control and coordinate the efforts of their subordinates largely on an informal basis.
The most important formal instrument of organizational control is the written job description, This instrument set forth for each job: reporting relationships, job objectives, duties and responsibilities, and performance measurement.
Good job descriptions provide a clear picture of the roles job holders are to play the sales organization and are also useful in other situations.
An organizational chart, another control instrument, shows formal relations among different positions. A chart reduces the conclusion about the individual’s role.
An instrument of organizational control used increasingly is the organizational manual. It is an extension of the organizational chart.
Typically, it contains charts for both the company and the departments, write-ups of job descriptions and specifications, and summaries of a major company and departmental objectives and policies.
Thus, now you know the complete process and steps in setting up a sales organization.