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The Impact of legitimacy on the choice of sales organization: an institutional theory perspective

Author: Weiss, Lawrence A. ; Anderson, ErinINSEAD Area: Marketing Series: Working Paper ; 95/59/MKT Publisher: Fontainebleau : INSEAD, 1995.Language: EnglishDescription: 33 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: This paper presents and empirically examines a previously untested theoretical explanation for why a sales organization structure is changed. We draw on institutional theory which argues that organizational actions are often motivated by a desire to increase the organization's legitimacy. We assess whether decision maker's perceptions of legitimacy (or the lack thereof) appear to impact the decision of wether to vertically integrate the selling function. We also examine whether legitimacy concerns are related to the decision whether to shift the selling contract to a different independent sales force, one which may enhance the manufacturer's legitimacy. Using survey data, we find support for the plausibility of a legitimacy motive and clarify the underlying mechanism of institutional theory. The implications of the study for managerial behavior and the literatures on channels research, organizational governance, and institutional theory are discussed
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This paper presents and empirically examines a previously untested theoretical explanation for why a sales organization structure is changed. We draw on institutional theory which argues that organizational actions are often motivated by a desire to increase the organization's legitimacy. We assess whether decision maker's perceptions of legitimacy (or the lack thereof) appear to impact the decision of wether to vertically integrate the selling function. We also examine whether legitimacy concerns are related to the decision whether to shift the selling contract to a different independent sales force, one which may enhance the manufacturer's legitimacy. Using survey data, we find support for the plausibility of a legitimacy motive and clarify the underlying mechanism of institutional theory. The implications of the study for managerial behavior and the literatures on channels research, organizational governance, and institutional theory are discussed

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