Sales Organization Culture,Compensation Strategy and Firm Valuation

Abstract

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. 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. 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. 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.