CHAPTER THREE RESEARCH FRAMEWORK AND DESIGN. In this thesis, we will like to investigate how the good system and practice can

Transcription

1 CHAPTER THREE RESEARCH FRAMEWORK AND DESIGN 3.1 Research Framework In this thesis, we will like to investigate how the good system and practice can build up the competitive advantage for consistent sales growth. Huselid (1995) found that investments in such practices are associated with lower turnover rate and greater productivity and business financial performance. Huselid, Jackson, and Schuler (1997) used available financial data as measures of firm performance. Wright & Scott (1998) proposed a framework which provides the foundation of building a Human Resources system to meet the company strategic needs. The authors claimed that firms shall promote fitness and flexibility in a system to create a sustainable competitive advantage. The major challenge is to create a clear and consistent system for the performance build-up (Roger & Wright, 1998). Refer to Fig. 3.1, the performance build-up structure constructs the interactions among the four models which include environmental events, strategy choice, firm structure, and firm performance. If a company can identify the opportunities that exist in the sales forces driving change and invest in competitive methods which take advantage of these opportunities, and allocate resources to create the greatest value and financial results (Olsen, West & Tse, 1998). Environmental scanning defines a company external environment in term of general economic, customers, suppliers, competitors, government regulation, etc. which directly or indirectly affect the top management s decision of long term strategy. A good strategy choice is the competitive method either products or services to produce a sustainable competitive advantage to differentiate us from other competitors in the target market or 59

2 geographical area. Environmental Sanning Strategic Choice Corporate Structure /Core Competence Firm or Sales Performance Fig. 3.1: Performance Build-up Structure Firm structure is designed to allocate company s resources or its core competences in the implementation of her competitive methods. The combination of competitive methods and core competences can produce competitive advantages which can not be easily duplicated or be substituted and be sustainable. The implementation of strategy is the outcome of the actions of the company so that these actions impact the activities of the process. In order to gain the good performance, the firm must be good at the implementation of the strategy or plan. The performance build-up structure is the firm performance which can be used as the feedback to review and to gain the performance. We need to decide whether the high scanning activity can produce the high performance. For sales performance, we normally use ROA (Return of Asset), ROS (Return of Sales), ROI (Return of Investment), sales 60

3 growth rate, gross margin, operating profit, cash flow, sales margin, etc. to calculate the overall sales performance. Based on the performance build-up structure, the interaction of four factors builds up the conceptual model on Fig We expect that there exists some processes to link these factors to produce the sales performance. We assume that the compensation strategy and culture which is established under human resource division can be integrated with company strategy, core competency, and corporate structure to produce the consistent sale performance. The proposed theoretical model will become the basic framework of this thesis. Environment Scanning Strategic Choice Compensation Strategy/ Culture (Team work, Value, Mission) Sales Performance Core Competency / Corporate Structure Fig. 3.2: Conceptual Model In the following sections, I will discuss the essential components of the proposed theoretical model. Since environment scanning will depend on top management s decision or external environment conditions (general economic, customers, suppliers, 61

4 competitors, government regulation, etc.), we will not include this topic in this thesis. The major concern in this thesis is how our compensation strategy works with company strategy, core competence, and company structure to form a special firm culture and attitude to improve the sales or company overall performance. 3.2 Quantitative Methods & Qualitative Methods The salesperson s evaluation is consisted of quantitative and qualitative issues. When evaluating the quantitative areas, use the metrics. While working at qualitative areas, use terms, numbers, letters, etc. We may use 1-7 or A-E rating system but we still need to designate what these data mean (Simpkins, 2004). The most acceptable approach is the five-level evaluation rating system. It looks like this: Rating 1: Poor for performance is significantly below acceptable levels. Rating 2: Fair for performance is at the acceptable level, but still needs improvement Rating 3: Good for performance is at the acceptable level with accomplishments satisfactory. Rating 4: Very good for performance is above the acceptable level, and accomplishments are very satisfactory. Rating 5: Excellent for performance and accomplishments are outstanding. Somewhere in between rating 1 and rating 2, we can add one more rating as Below Average to clarify the performance is close to, but not yet at the acceptable level. Conventional Methods: Interviews 62

5 The most common approach is to ask people who are doing a job or managing a team to fill out a questionnaire. We need to make sure that they understand the questions with the right information. The advantage of interview process is the involvement of their understanding of these questions. The results are as good as people involved. If important aspects of a job are omitted or interviewers do not realize or express the importance of certain aspects, the results can be faulty. Different people have different perceptions, which can result in differences of interpretation or emphasis. The whole process is open to bias and favoritism (Milkovich, 1996). The major disadvantage of the interview approach is the big amount of efforts; whereas conventional methods have given way to more quantitative or systematic data collection. The Quantitative Methods: Questionnaire A quantitative analysis is a questionnaire which lists a number of questions of interviewers job functions or familiar categories. The management levels can get more involved in strategic or decisive questions. Some consulting firms have developed quantitative questions to fit the needs of specific organization or tasks. It is easier to get some questions from the previous related research areas or thesis to come out the suitable questionnaire. For this research I used both questionnaire and interview process to get into some questions. From interview process I can get the whole picture of the company but from the questionnaire I can get some details. For IBM and Agilent these two companies, their incentive programs are so complicated, so there is no way to understand them from the questionnaire. 63

6 3.3 Case Study Some people prefer to get into specific cases and to dig more into some specific questions to clarify some phenomena. For case study, the qualitative methods shall be a right approach since more face-to-face communications will be essential. The reason why I choose case study is that this thesis topic is related to various factors. Another reason why I choose case study is because I like to get in touch with various industry segments or companies. A method structures a communication process so that the process is effective to deal with a complex problem. The structured communication is provided with some feedbacks from individual contributions of information and knowledge to have some assessment of group judgments and consensus. This case study is based on a process for collecting and distilling knowledge from an assembly of experts by a series of surveys intermingled with controlled opinion feedback (Adler & Ziglio, 1996). Lacking full scientific understanding, decision-makers have to depend on their own perception or expert opinion. It is an effective method for a group of experts (individuals) to share and get involved in a complex problem. Most interview members are in managerial levels and some are even in top levels. Please refer to the interview questionnaire under the appendix section. For the questionnaire under firm s characteristics section, I referenced them from Coughlan & Sen. I figured out most questions in the interview questionnaire from the contents of this thesis. In the study, I combined both questionnaire and interview process to investigate this study. I sent the questionnaire to the interviewed participants and let them fill 64

7 out most questions in the questionnaire. After receiving the questionnaire s feedbacks, I made some appointments with participants to dig into some complicated incentive programs which include Agilent s and IBM s one. Some complicated incentive programs needed to have face to face interactions in order to understand the whole picture of some delicate programs. 65