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1 International Research Journal of Applied and Basic Sciences 2013 Available online at ISSN X / Vol, 5 (6): Science Explorer Publications The Impact of Aligned Rewards and Senior Manager Attitudes on Conflict and Collaboration between Sales and Marketing in JahanBehbood Pharmaceutical Co. Romina Nabavizadeh* 1, Mandan Momeni 2, Soheil Sarmad Saidi 3 1. Master Student in Department of MBA, Islamic Azad University, UAE 2. Faculty member in Department of management, Islamic Azad University, Tehran, Iran. 3. Postdoctoral in E-commerce from Sydney UTS University, Australia. Corresponding Author r_nbv@yahoo.com ABSTRACT: This research surveys collaboration between sales and marketing in Jahan Behbood Pharmaceutical company in Iran and survey to discover how sales and marketing personnel are rewarded and if alignment of rewards can improve collaboration between sales and marketing and reduce inter-functional conflict. In addition, it examined the role of senior managers support for coordination on sales and marketing collaboration. The result reveals that aligned rewards and senior managers support for coordination can increase sales and marketing collaboration and also can decrease inter-functional conflict. This is important because inter-functional conflict has a strong negative impact on collaboration between sales and marketing in business to business firm. The sales and marketing interface has a direct and significant impact on customer and the revenue earning potential of firms. Keywords: collaboration, Hypothesis, Inter-functional conflict sales and marketing interface, Management support for coordination, Rewards alignment. INTRODUCTION This research examines the effectiveness of rewards alignment, the role of senior management in improving collaboration and decreasing conflict between sales and marketing personnel in business-tobusiness firms. An investigated key proposition in this study is whether sales and marketing collaboration can be improved by aligning the reward structures of sales and marketing or not. A number of conceptual and empirical studies e.g., Dewsnap and jobber, (2000); kotler, Rackham, and krishnaswamy, (2006); Rouzies et al, (2005) have identified the aligned or joined reward structures as keys for mechanism in order to improve the sales marketing or interface and decrease inter functional conflict according to Galbraith (2002), "the purpose of the reward system is to deploy the employee's goals according to the orientation of organization." The impacts of senior managers' support on sales and marketing coordination by inter functional conflict and collaboration are also observed and achieved. Moreover, inter functional conflict (e.g. working at cross purposes, low support and obstructive behavior) in the sales and marketing interface reduces collaboration (Le Meunier FitzHughand Piercy, 2007; Menon, Jaworsk; and Kohli, 1997). Our purposes through this paper are: Determining the impact of aligned rewards and senior managers attitudes on conflict and collaboration between sales and marketing. Determining the impact of senior managers' support through coordinating on inter-functional conflict. Determining the impact of rewards alignment on inter-functional conflict. Determining the impact of senior managers' support through coordinating on collaboration between sales and marketing. Determining the impact of inter-functional conflict on collaboration between sales and marketing. Determining the impact of rewards alignment on collaboration between sales and marketing.

2 The study is processed in some steps; firstly, we provide a review of the literature and hypothesis, model and then we describe our methodological approach and results and finally we present our conclusions, limitations inthis study, even suggestion and directions for future. Research Review and Hypothesis Collaboration between Sales and Marketing in this research, our definition of "collaboration" is drawn from Kahn's (1996) research into RandD and marketing integration. This research revealed that collaborative factors such as collective goals, mutual understanding, informal activity, shared resources, common vision, and esprit de corps are moved effective in improving internal interfaces than simply interaction or integration of activities. "Integration refers to lateral links hat coordinate faster mutual adjustment, and coalesce subunits towards achieving the overall objectives in organization." (German et al, 1994). The interaction and collaboration of two distinct processes can be defined as physical activities e.g. meeting, and telephone calls invoked interaction, and intangible elements e.g. mutual understanding, common vision and sharing information called collaboration (Kahn, 1996). Collaboration can lead to cross functional acquisition, although according to Meyers and wileman (1989) much cross functional acquisitions are transferred through informal Networks, e.g. informal discussions, worker flows and friendship ties. A number of other studies have found that there are operational efficiencies to be gained through improved internal collaboration, which may lead to greater customer satisfaction and improved business performance (e.g, Kohli and Jawarski, 1990; Morgan and Turnell, 2003; Narver and slater, 1990; Webster, 1997) In 2007, Le Meunier-FitzHugh and Piercy found that sales and marketing collaboration in business-to-business organizations positively impact on business performance. Senior managers Support for Coordination Felton (1959), Hambrick and Mason (1984), and Jaworski and Kohli (1993) identified that senior management play an important role in setting of direction and culture of the organizational strategies. Also, senior management is responsible for establishing the culture of the organization through leadership and by empowering staff to initiate and execute strategies to achieve the objectives in organization (Slater and Narver, 1994). Child (1985) and Gupta et al.. ( ) found that senior management should be as a tool in establishing integration among functional groups. "Top management should consider programs that encourage departments to achieve goals collectively, have mutual understanding, work informally together, ascribe to the same vision and share ideas and resources" (Kahn, 1996). As Mohrman (1993) has noted that the role of top management will be formulated and communicate a clear vision of the organization's strategy and vision and to steady challenge the organization to achieve excellence improvement in implementing the path. Department of management needs to explicit the steps in order to build an organizational atmosphere in which facilitates integration i.e. implementing joint reward systems and fastening a culture that is based on an understanding of each other's departmental needs. The role of top management is facilitative, properly combining top-down strategy guidelines while encouraging bottom-up strategy insights and responsibilities by communicating and discussing strategy implementation a crossfunctional area (Slater and Narver, 1994) Inter-functional Conflict between Sales and Marketing Conflict can have constructive or destructive outcomes depending upon management method, and an emphasis on managing conflict requires a discriminating process between its causes (Barclay, 1991). Dew snap and Jobber (2000) have considered the interface between sales and marketing then they found that there is an evidence to indicate that sales and marketing are interdependent; their relationship is not always seen harmoniously or collaboratively. Some authors have actually promoted further, elaborating the relationship between sales and marketing as exhibiting lack of cohesion, distrust, non-cooperation and being in conflict (Rosenbloom and Anderson, 1984; Anderson, 1996; Strahle et al, 1996; Dewsnap and Jobber, 2000). Ruekert and Walker (1987) believed that the differences between sales and marketing objectives might constitute a key area of conflict. Peter Drucker (1974) highlighted just how far sales and marketing objectives can differ: selling and marketing are antonymous rather synonymous or even complementary. There will be a need before one can assume for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and to understand the customer so well that the product or service fits him and sells itself."(drucker, 1974) According tokotler et al. (2006), the basis for conflict between sales and marketing comes from both economical and cultural sources. The people in selling part produce revenue and may be process driven, while 757

3 marketing people are more creative and are a cost center for organization, but they frequently have to share a single budget granted by senior managers. This sharing of resources may create friction between the two groups. Sales and marketing also appear to have some cultural resistance to working in group (Dawes and Massey, 2005; Dewsnap and Jobber, 2002; Yandle and Blythe, 2000), created by the acquisition of specialized knowledge and skills that is linked with functional identity (Van der Vegtand Bunderson, 2005). Rewards Alignment in Organization "The purpose of the reward system is to align the employee's goal according to the orientation of organization. It provides motivation and incentive for the completion of the strategic direction" (Galbraith, 2002:12). Collis and Montgomery (1998) believed that reward systems are always linked to control, while Wood (1995:31) found that "reward and control systems will influence on behavior strongly and help set the ethical atmosphere in each special organization". Norvell and Worchel (1981) found that compensatory of imbalances that favored any group, would be universally regarded as unfair, even when they recovered historical imbalances, and that they served to reinforce inter-group differentiations. Marketing people are rewarded for increasing the profitability of the business and for introducing new products successfully, while the sales team is told to meet volume targets" (Alldredge et al, 1999:120). Kotler et al (2006) suggested that sales and marketing rewards should be aligned so that they share responsibility for revenue the considered objectives. Similarly, Strahle et al (1996) strongly recommended that sales bonus schemes should be linked to implementing marketing strategy successfully. Evidence supporting the benefits of marketing, Research and Development working relationships during new product development (Gupta, Raj and Wilemon, 1987; Souder and Chakrabarti, 1978). Sales and marketing may therefore be rewarded for behaviors and outcomes that are inconsistent with each other's objectives and these contradictory, competitive goals can reduce cross functional collaboration and increase conflicts. Some scholars recommend that setting "Superordinate goals", i.e. "goals that are urgent and compelling for all groups involved, but whose attainment requires the resources and efforts of more than one group" (Sherif, 1962). Scholars in fields such as compensation research (Coombs and Gomez Mejia, 1991), New product development (Kucmarski, 1988), and marketing (Hausr, semester and Wernerfelt, 1994) all recommend changing reward system to reflect superordinate goals e.g. company profit, or profit gained by specific project. By doing this, it may be possible to better aligning the objectives of different managers' functions. Figure 1.Research Conceptual Model.(The conceptual Model(fig 1) has been drawn from previous studies (e.g Le meunier- Fitzhugh, Massey & piercy,2011;dewsnap & Jobber,2000;Griffin &Hauser,1996;Gupta,Raj &Wilemon,1996; Rouzies et al.,2005) ). Research Conceptual Model According to these explanations, this is the conceptual model in our research to determine the relationship between our variables. Examine the existing Hypotheses into the Case Study In the present study, the existing hypotheses will be tested as follows; H 1 : Senior managers support for coordination will increase sales and marketing collaboration. H 2 : Senior managers' support for coordination will reduce inter-functional conflict between sales and marketing 758

4 H 3 : Inter-functional conflict between sales and marketing will have a negative impact on sales and marketing collaboration H 4 : Further sales and marketing rewards alignment will increase sales and marketing collaboration H 5 : Further sales and marketing rewards alignment will decrease inter-functional conflict between sales and marketing Methodology of the Research The aim of this study is to gain a better concept in collaboration between sales and marketing in Jahan Behbood pharmaceutical company. Sample and Data Assembling The survey on this study is conducted on 125 employees who were working in JahanBehbood pharmaceutical company in Iran in May (2013). Meanwhile, data were assembled via gained information from questionnaires because the number of community is little (the sample is equal with community) we use census method. Research Procedures In order to examine the content validity of questionnaires it was examined by field expert and in order to determine its reliability and content validity a pilot study of the procedures were done, in a pilot study, the questionnaires were applied to 25 employees outside the sample and corrections were made based upon the received feedback. Our questionnaire forms include 20 questions for collaboration between sales and marketing and interfunctional conflict, senior managers' support for coordination, aligned rewards. Answers are 5 point Likert scale from "strongly disagree" on one end to "strongly agree" and other with neither agree nor disagree, unscrupulous. Coding was entered into SPSS and the Cronbach and factors for the whole questionnaires was computed about and collaboration between sales and marketing was and inter-functional conflict was and senior managers' support for coordination was and aligned rewards was The structural validity was examined using confirmatory factor analysis (CFA) to examine the validity of model and dimensional structure. Lisrel fit statistic chi square = , df=164, p-value= , RMSEA=0.067 indicated that these items fit the model sufficiently. Also exploratory factor analysis (EFA) was performed in order to be able to directly inspect whether or not the factor loading matrix possessed the simple structure. The value of the KMO measure of sampling adequacy for this set of variables is 0.92, which showed that the data set is suitable for factor analysis and Bartlett's test of sphericity was highly significant (sig=0.000). ANALYSES AND RESULTS In this study, statistical analyses were conducted with the statistical package for social science (SPSS), version 19.frequencies analyses, reliability analyses, exploratory and factor analysis were conducted. In addition, structural Equation modeling (SEM) was applied, using the lisrel 8.53 program. Structural equation modeling was conducted to investigate relationship between collaboration between sales and marketing, senior managers support for coordination, inter-functional conflict, aligned rewards. The result from SEM supports the theoretical model with a x 2 =0,df=0 the x 2 /df ratio of 0 had a value less than 2, indicating an acceptable fit. Also an inspection of the fit indices was considered in the present study showed that they met the criteria recommended GFI =0.92, AGFI=0.91, CFI=0.92, NFI=0.93 and RMSEA = In combination, these fit indices suggest a satisfactory fit to the data. So, examination of the path coefficients for the model indicated the proposed paths were significant (see figure 2). 759

5 Figure2.The Proposed SEM 1. The results of this research showed that all of our hypotheses were supported and inter-functional conflict can have a negative effect on improving collaboration between sales and marketing. Table 1. SEM result. Relationship Standard value ( ) t-value Result Senior managers support collaboration sales & marketing Senior managers support inter-functional conflict Inter-functional conflict collaboration sales & marketing Aligned rewards Collaboration sales & marketing Aligned rewards inter-functional conflict Significant Significant Significant Significant Significant Also, senior managers support for coordination and aligned rewards can have a positive effect on improving collaboration between sales and marketing and have negative effect on inter-functional conflict. CONCLUSION This study focuses on whether senior managers support for coordination and the use of aligned reward structures have positive effects in reducing conflict and improving collaboration between the sales and marketing functions. When senior managers support coordination, Sales / Marketing collaboration is higher and reduced inter-functional conflict Our results are consistent with Homburg et al (2008), who argued that to achieve collaboration between sales and marketing, senior managers need to create a culture of sharing, learning together, knowledge management, and structural linkage that is rarely achieved. Our findings also support le Meunier FitzHugh(2011) who suggested that positive informal relationships between sales and marketing personnel may have a significant impact on reducing inter-functional conflict; our research also suggest that formal and informal relationship between sales and marketing can improve collaboration between sales and marketing and reduce inter-functional conflict. Our results found that increased inter-functional conflict between sales and marketing reduced collaboration between sales and marketing. There is strong negative effect from conflict to sales andmarketing collaboration (Le Meunier FitzHug, 2011). Our research also suggest that good formal and informal communications, goal alignment, improving joint planning and the role of senior management to reduction of wrangles can reduce inter-functional conflict. 1 Structural Equation Model. 760

6 Our results also support that setting aligned rewards should help reduce inter-functional conflict (Chimhanzi, 2004) and improve collaboration between sales and marketing. (Dewsnap and Jobber 2000; Kotler et al, 2006). Previous researchers had suggested that rewards may be used to reduce conflict between functional groups (Chimhanzi, 2004; Gupta et al, 1987; souder and chakrabarti, 1978) Our research suggest that setting "superordinate" goals can reduce inter-functional conflict and if sales and marketing gets a measure of bonus depending on the performance, reward system can improve collaboration between sales and marketing. Status of Limitation Generally The present study has several limitations. First, we have little research background that has attempted to explore the relationship between sales and marketing. Second, we had problems with data gathering between JahanBehbood company did not allow us to gather information. Future study Our suggestion for future research is. First, find that the other variables to improve collaboration between sales and marketing, second find some variables that reduce inter-functional conflict between sales and marketing. REFERENCES Alldredge KG, Griffin TR, Kotcher LK.1999."May the sales force be with you." The Mckinsey Quarterly, 3: Cespedes FV.1993."Coordinating sales and marketing in consumer goods firms." Journal of consumer marketing, 10(2): Chimhanzi J "The impact of integration mechanisms on marketing and HR dynamics." Journal of marketing management,20(7-8): Dewsnap B, Jobber D "The sales-marketing interface in consumer packaged goods companies:a conceptual framework." Journal of personal selling and sales management, 20(2): Dewsnap B, Jobber D "A social psychological model of relations between marketing and sales." European Journal of marketing,36(7/8): GuenziP,Troilo G "Developing Marketing capabilities for customer value creation through marketing-sales integration."industrial marketing management Journal, 35(8): Humborg C, Jensen O, Krohmer H "Configuration of Marketing and sales:taxonomy."journal of Marketing, 27(2): Kahn KB "Interdepartmental integration: A definition with implications for product development performance." Journal of product innovation management,13(2): Kohli AK, Jaworski BJ "Market orientation: The construct, research propositions, and managerial implications."journal of marketing, 54(2): Kotler P, Rachham N, krishnaswamy S "Ending the war between sales and marketing." Harvard business review,84(7/8): Kyckling K Master's dissertation on;"the impact of Marketing sales relationship on business performance", Department of marketing and management, Aalto university school of Economics, Finland. Le MeunierFilzHugh K, pircy NF "Does collaboration between sales and marketing affect business performance?" Journal of personal selling and sales management, 27(3): Le MeunierFitzHugh K, Massey GR, piercy NF.2011."The impact of aligned rewards and senior manager attitudes on conflict and collaboration between Sales and marketing", Industrial Marketing management, 40: Le MeunierFitzHugh K, piercy NF "Exploring collaboration between Sales and marketing", European Journal of Marketing,.41(7/8): Le MeunierFitzHugh K.2006.Doctoral dissertation on;"an investigation in to the antecedents and consequences of collaboration between sales and marketing", Warwick University, London, UK. Mikander C.2010.Master dissertation on "the impact of a reward system on employee motivation in Motonet- Espoo", Helsinki, Finland. Rehme S, Rennhak C "How to ensure peaceful and productive relations between Marketing and Sales", Munich Business school, German. Rouzies D, Anderson E, Kohli AE, Michaels RE, weitz BA, Zoltner AA.2005."Sales and marketing integration: A proposed framework."journal of personal selling of sales management, 15(2): Sherif M "Intergroup relations and Leadership: introductory statement." In M.sherif (ED), intergroup relations and leadership.new York: John Wiley chap. 1: pp Vargo SL, Lursch RF "Service-dominant logic. Continuing the evaluation Journal of the academy of marketing science, 36(1):1-10. Viswanathan M, Olson EM.1992."The impact of implementation of business strategies implications for the sales functions." Journal of personal selling and sales management, 12(1): Vretborn J, Astrom L Master dissertation on"integration of sales and marketing: case studies of two Swedish companies",industriellekonomiochsamhällsvetenskap publication, Lulea university of Technology, Sweden. Yandle J, Blythe J "Intra-departmental conflict between sales and marketing: an exploratory study."the Journal of selling and major account management, 2(3):