The pharmaceutical sector faces stiff competition but a motivated salesforce can provide competitive advantage and facilitate in consolidating the presence of a firm in a highly regulated market. This study will test the relevance of modern motivation theories in the context of the recent financial crisis and add to the literature. The need for motivating sales representatives’ in the pharmaceutical sector is discussed in the presence of downward employment pressures on the sector in Europe. This research will attempt to determine the applicability of the extrinsic and intrinsic motivators for salesforce motivation in pharmaceutical firms of Greece. The most significant extrinsic factors determined by literature include salary, opportunity of hierarchical advancement and bonuses, while the most important factors in terms of intrinsic motivation include challenging assignments, flexible work arrangements, team-based job design, verbal recognition, career development and self-efficacy. This research will identify the techniques that can be used to enhance salesforce motivation in pharmaceuticals sector of Greece.
Determinants of sales representatives’ motivation in a Pharmaceutical company in Greece during the current recession
The sales representatives working for pharmaceutical firms in Europe face significant probability of downsizing due to the increasing focus on salesforce effectiveness measures as opposed to the traditional approach of placing importance to the size of the salesforce (Herwig 2003, pp. 42-56). The recent financial crisis has also led to the dwindling of jobs in Greece and across the European continent. The pharmaceutical industry is faced with cut-throat competition and a highly motivated salesforce can provide competitive advantage to a firm and facilitate continuing profitability and consolidation of the market share in a highly regulated market (Danner and Ruzicic 2006, pp. 2-5). This research proposal is intended to develop an appropriate approach to measure the significance of the determinants of motivation in the context of Greece and the financial crisis.
1.1- Statement of the problem
‘What factors determine the motivation levels for sales representatives’ at pharmaceutical firms in Greece given the conditions prevalent during the current financial crisis?’
1.2- Aims and Objectives
This research aims to determine the interaction of motivational factors for the salesforce teams in pharmaceuticals with changing economic conditions. It will test the relevance of modern motivation theories in their attempt to explain the importance of the determinants of motivation in the context of an impending financial crisis in Greece. The following are the objectives of this research.
- To identify the factors that help determine the motivation levels for sales representatives unique to the pharmaceutical sector in Greece.
- To study the cultural factors that influence motivation of sales representatives.
- To test the impact of a lack of job security on the motivation levels of salesforce in the pharmaceutical sector.
- To determine the methods of motivation acceptable to sales representatives.
- To identify the most useful technique that can be used to enhance motivation levels of sales employees.
1.3- Significance of the research
There is a scarcity of sector related studies of salesforce motivation in the context of Greece; therefore, this research highlights the debate regarding the importance of motivating sales representatives in the pharmaceutical sector (Shim 2006, pp. 6-8). This study tests the relevance of motivation theories in the context of the recent financial crisis and adds to the modern literature that can be further studied in a regional context. The need for motivating the salesforce in the pharmaceutical sector is discussed in the presence of downward employment pressures on the industry. This study intends to incorporate the cultural differences and their impact on the success of motivation techniques utilised by firms (McAlister and Vandlen 2006, pp. 1-2).
2.0- Literature Review
Erez and Isen (2002, p. 1055) use the expectancy theory to predict the motivation level of an individual and test the extent of motivation created in individuals based on their perception that hard work will result in superior performance in terms of rewards, recognition and satisfaction. The study indicated that when the link between performance and outcome is specified, all three components of expectancy motivation are influenced positively (Erez and Isen 2002, pp. 1065-1066). Seijts et al., (2004, p. 227) define goal setting theory as the contention that goal commitment leads to a higher task performance compared to a vague performance goal. The results indicate that goal orientation can complement the motivation created through goal setting and influence an improvement in performance of an employee.
Maslow (1954) developed a theory of motivation and personality that provided a hierarchy of needs with the satisfaction of physical needs at the lowest level of hierarchy and self actualisation at the highest level; the theory argued that the first level of hierarchy must be fulfilled before an individual can proceed to the next level. Borkowski (2010, pp.118-124) discussed the ERG theory that provides an alternative approach to the hierarchy of needs by identifying three categories of needs: existence, relatedness and growth.
The existence includes all the basic necessities required by an individual to survive, relatedness facilitates the development of relationships in the society and growth relates to achievement and success (Locke and Latham 2006, pp. 265-267). However, the ERG theory suggests that an individual can attain higher levels of hierarchy before fulfilling the lower level of needs. This theory also accounts for the difference in needs between different cultures and societies and caters to the explanation of the frustration-regression principle; implying that an individual may need existence related objects once relatedness is not satisfied (Bernard 1992, pp. 56-59; John 2005, pp. 16-19).
McClelland’s theory of needs suggests that three needs of an individual need to be satisfied including achievement, power and affiliation; individuals are motivated by a combination of these needs and some individuals may exhibit a strong tendency to be motivated by one of these factors (Borkowski 2010, pp. 125). Schultz et al., (2006, pp. 23-27) discuss the equity theory predicts that workers often tend to react to the speed of the individuals surrounding them at work. The study tests the relevance of equity theory in explaining worker motivation and find that workers tend to react to the speed of co-workers but the reactions tend to vary significantly from one individual to another.
Malik and Naeem (2009, pp. 26-28) study the motivational preferences of pharmaceutical salesforce in the context of the developing world and identify using a questionnaire analysis that the three most important motivators include pay and fringe benefits, job security and promotion opportunities. It is also found that the motivation created through pay and fringe benefits has similar impact on all demographics. The motivational impact of job security was the highest amongst sales representatives with less than ten years experience owing to the high unemployment and the recent financial crisis. Therefore, it is prescribed that special emphasis should be placed on severance pay, outplacement and early retirement before initiating downsizing of pharmaceuticals salesforce (Woodbine and Liu 2010, pp. 28-30).
McAlister and Vandlen (2006, pp. 1-3) highlight the importance of extrinsic and intrinsic motivators for salesforce motivation in pharmaceutical firms. The most significant extrinsic factors found in the study include salary, opportunity of hierarchical advancement and bonuses, while the most important factors in terms of intrinsic motivation include challenging assignments, flexible work arrangements, team-based job design, verbal recognitions, career development and self-efficacy. The study also argues that taking cultural and generational differences into account can also prove to significantly improve salesforce motivation. Singh (2010, p. 72) also studies the importance of intrinsic and extrinsic factors, that may lead to higher job satisfaction in pharmaceutical salesforce and finds that growth, relationships with co-workers, promotion expectation, recognition, job security, operational procedures, delegation and quality of work supervision can lead to significant increase in motivation (Jansson and Vessman 1997, pp. 202-203). The internal promotion schemes and growth from inside the company can improve motivation amongst salesforce. The study also indicates that demographics have no significant impact on motivation levels in sales force (Gonsalves 2008, p. 3).
Longino (2007, pp. 1-13) found that salesforce motivation and performance in pharmaceutical firms is significantly high when an appropriate territorial distribution and design is used by these firms. Danner and Ruzicic (2006, pp. 1-7) argue that pharmaceutical salesforce are no more governed by the size of the team and instead by salesforce effectiveness; the widespread downsizing in the salesforce of pharmaceutical firms around Europe can lead to major concerns regarding job security and de-motivate the sales representatives. Therefore, increasing job security proves to be the most important factor for salesforce motivation in pharmaceuticals during the current financial crisis (Barnett 1999, pp. 6-10).
3.0- Research Methodology
The research will utilise a combination of the qualitative and quantitative methods to determine the significance of the factors that lead to increased motivation for sales representatives (Longino 2007, pp. 1-4). The determinants of motivation highlighted by the literature review will be the focus of the analysis in the context of Greece and the recent financial crisis. The measurement of the impact of these factors on motivation levels will be quantitative; however, the research will be reinforced by a qualitative analysis of the motivation techniques used by pharmaceutical firms using a case study approach (Hongchatikul 2008, pp. 12-13). The secondary research will examine the literature that focuses on developing innovative means for handling sales representatives with different profiles and segments. Primary data for this research will be collected by developing a questionnaire for the sales representatives working at pharmaceuticals firms.
3.1- Sampling Methodology
The sampling methodology chosen for this study involves a multi-stage sampling process involving two distinct phases of selection process of the firms used for analysis (Alan 2011, pp. 21-26). The initial stage involves the selection of the sectors that are the focus of this research; this is based on conscious selection of the large scale pharmaceutical firms operating in Greece. The second stage includes the selection of the sales representatives’ for questionnaires using a non-probability sample as the goal is to select a maximum size for the sample and the minimum sample size will be a hundred sales representatives (Gordy 2000, pp. 139-148). The research may also involve interviews with pharmaceutical firm managers depending on the resources and the cooperation available from the companies.
The dissertation will accomplish a review of the literature on sales force motivation, motivation techniques and the impact of a recession on sales force motivation levels. The research resources include eminent online journals including the Science Direct, Blackwell Synergy, Jstor, Ebrary, Springer Link, Ingenta Connect, Google Books and Google Scholar, and the books and publications available at the library. The resource pool will be filtered after conducting a preliminary review of the literature available and the relevant literature will be sorted for inclusion into the dissertation.
3.3- Ethical Obligations
It is crucial to uphold the integrity of research process and the ethical conduct of the researcher is manifest from the fact that a replica of all the literature and data used for the research will be maintained and made available upon request. The contact to the moral risks posed during the exploration process is also diminished by certifying that the researcher uses a manageable sample for case analysis to be able to conduct an in-depth analysis of the motivation techniques used by the selected firms (Nelson 2004, pp. 4).
The research on salesforce motivation in the pharmaceuticals sector in Greece will not only add to the existing pool of literature on salesforce motivation but it will also create interest in the testing of modern theories of motivation and the impact of the recent financial crisis on the determinants of salesforce motivation (Iguisi 2009, pp. 147-149). This provides incentive for sector based studies on salesforce motivation and an opportunity to compare the results obtained in different industries and across diverse cultures and economies.
Alan, B., (2011). Business research methods. Oxford: Oxford University Press.
Barnett, C., (1999). Motivation theories: Integration. New Hampshire: Whittemore School of Business and Economics, University of New Hampshire.
Bernard, W., (1992). Human motivation: Metaphors, theories and research. Michigan: Sage Publishers.
Borkowski, N., (2010). Organisation behaviour in healthcare. Sudbury: Jones and Barlett Publishers.
Danner, S., and Ruzicic, A., (2006). The European pharmaceutical industry: Delivering sales excellence in turbulent times – A roadmap for getting the basics right and exploring the future. Munich: Roland Berger.
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Gonsalves, B., (2008). Retaining and motivating your sales force in Asia. New York: Mercer Series.
Gordy, M., (2000). A comparative anatomy of credit risk models. Journal of Banking and Finance, Vol. 24 (1), pp. 119â€“149.
Herwig, J., (2003). Motivate and reward: Performance appraisal and incentive systems for business success. New York: Palgrave MacMillan.
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Iguisi, O., (2009). Motivation related values across cultures. African Journal of Business Management, Vol. 3 (4), pp. 141-150.
Jansson, S., and Vessman, J., (1997). The industrial point of view: Competence development in Pharmaceutical industry. American Journal of Pharmaceutical Education, Vol. 61, pp. 202-203.
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Malik, M., and Naeem, B., (2009). Motivational preferences of pharmaceutical sales force: Empirical evidence from Pakistan. Pakistan Economic and Social Review, Vol. 47 (1), pp. 19-30.
McAlister, R., and Vandlen, C., (2006). What types of rewards or recognition practices motivate individuals to be creative and innovative, particularly those in R&D functions whose products are developed over long time periods? Cornell: Cornell University.
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Schultz, K., Schoenherr, T., and Nembhard, D., (2006). Equity theory effects on worker motivation and speed on an assembly line. Boston: Harvard Business School.
Seijts, G., Latham, G., Tasa, K., and Latham, B., (2004). Goal setting and goal orientation: n integration of two different yet related literatures. Academy of Management Journal, Vol. 47 (2), pp. 227-239.
Shim, S., (2006). Adoption of pharmaceutical sales force automation systems: An exploratory study. South Orange: Stillman School of Business, Seton Hall University.
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Woodbine, G., and Liu, J., (2010). Leadership styles and the moral choice of internal auditors. Electronic Journal of Business Ethics and Organisation Studies, Vol. 15 (1), pp. 28-35.
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