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Path Dependence in Personal Selling : A Meso-Analysis of Vertical Integration

Author

Listed:
  • Frédéric, DALSACE
  • Erin, ANDERSON

    (INSEAD)

  • William T., ROSS, Jr.

    (Smeal College of Business Administration, Pennsylvania State University)

Abstract

We examine an unusual form of path dependence, in which suppliers that take different decision paths end up in the same position: excessive vertical integration of the personal selling function. We argue that this is the case even though outsourcing is more seriously considered than ever, and economic arguments for outsourcing the sales function are compelling. We develop an institutional explanation at the meso level (a combination of individual, organization, and environmental forces, explicitly considering how these levels combine). This meso-analysis focuses on four forces driving firms toward being locked into employee sales forces. We enumerate and classify these mechanisms, illustrating them with a simple simulation of how outsourcing sales becomes rare. We close with testable propositions about which firms are most likely to break their dependence on a vertically integrated path.

Suggested Citation

  • Frédéric, DALSACE & Erin, ANDERSON & William T., ROSS, Jr., 2003. "Path Dependence in Personal Selling : A Meso-Analysis of Vertical Integration," Les Cahiers de Recherche 787, HEC Paris.
  • Handle: RePEc:ebg:heccah:0787
    as

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    References listed on IDEAS

    as
    1. Anderson, Rolph E. & Mehta, Rajiv & Dubinsky, Alan J., 2003. "Will the real channel manager please stand up?," Business Horizons, Elsevier, vol. 46(1), pages 61-68.
    2. David J. Teece, 2003. "Competition, Cooperation, and Innovation Organizational Arrangements for Regimes of Rapid Technological Progress," World Scientific Book Chapters,in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 16, pages 447-474 World Scientific Publishing Co. Pte. Ltd..
    3. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, pages 48-90.
    4. Erin Anderson, 1985. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 4(3), pages 234-254.
    5. Pirrong, Stephen Craig, 1993. "Contracting Practices in Bulk Shipping Markets: A Transactions Cost Explanation," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 937-976, October.
    6. David Hirshleifer & Ivo Welch, 2002. "An Economic Approach to the Psychology of Change: Amnesia, Inertia, and Impulsiveness," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 379-421, September.
    7. repec:mes:jeciss:v:30:y:1996:i:4:p:1212-1216 is not listed on IDEAS
    8. George P. Huber, 1991. "Organizational Learning: The Contributing Processes and the Literatures," Organization Science, INFORMS, vol. 2(1), pages 88-115, February.
    9. Frédéric, DALSACE & Nicola C., DRAGONETTI & Karel, COOL, 2003. "A comparative Test of the Efficiency, focus and Learning Perspectives of Outsourcing," Les Cahiers de Recherche 776, HEC Paris.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    path dependence; personal selling; outsourcing; sales function;

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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