Salesforce incentive within organizational life cycle: A transaction cost analysis

Article type: Research Article

Authors: Liao, Chin-Nung

Affiliations: Department of Business Administration, China Institute of Technology, Nankang, Taipei 115, Taiwan R.O.C. Tel.: +886-2-27821862; Fax: +886-2-27864984; E-mail: lliao@cc.chit.edu.tw (C.N. Liao) E-mail: lliao@cc.chit.edu.tw (C.N. Liao)

Abstract: This paper takes an integrated view of Transaction Cost Analysis (TCA) in order to study the design of incentive compensation plans in salesforces and develops a framework of incentive compensation match to organizational life cycle. In essence, this article argues different incentive strategy, such as outcome, behavior and clan incentive control, can create different effort effect for salesforce in each stage of organizational life cycle. Three types of incentive compensation based, output, process and socialization, are proposed respectively in each stage of organizational processes. Implementing different types of incentive compensation criterion to motive salesforce to execute the corresponding strategy of organization can be built.

Keywords: Transaction cost, salesforce control, organization life cycle, incentive compensation

DOI: 10.3233/HSM-2007-26101

Journal: Human Systems Management, vol. 26, no. 1, pp. 1-9, 2007