Bonding Costs and Inside–Outside Dyadic Selling in Business-to-Business Markets

49 Pages Posted: 7 Jul 2020 Last revised: 31 Jan 2022

See all articles by Huanhuan Shi

Huanhuan Shi

Texas A&M University

Shrihari Sridhar

Texas A&M University - Department of Marketing

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: January 30, 2022

Abstract

In business-to-business markets, dyadic selling efforts by inside and outside sales reps involve an outside sales (OS) representative (rep) who interfaces with customers face-to-face and an inside sales (IS) rep who does so through remote selling efforts. Firms that seek to extract value from such IS–OS dyadic selling must mitigate agency problems–manifested as free riding and shirking–that arise due to the potential for misaligned interests of the reps (agents, as both reps are employed by the firm) and the firm (principal). The concept of dyadic bonding costs suggests a means to conceptualize the costs borne by sales reps (agents) to mitigate free riding, as a combination of hold-up costs (commitment to prior success) and alignment costs (efforts to refine dyad-specific interaction). To test a framework of the interplay of these two forms of bonding costs and their effects on selling task performance, the authors gather field data that reveal performance-enhancing effects of IS–OS shared selling success (indicator of hold-up costs), which weaken with dependence asymmetry within a dyad and strengthen with selling task uncertainty (indicators of alignment costs). Thus, firms might attain improved performance by relying on reps’ shared success and balanced mutual dependence, as well as by assigning dyads that have substantial shared success to selling tasks (customers) marked by uncertainty.

Keywords: agency theory, alignment costs, bonding costs, business-to-business sales, dependence asymmetry, dyadic teams, hold-up costs, governance, inside–outside sales reps, shared selling experience

JEL Classification: M3

Suggested Citation

Shi, Huanhuan and Sridhar, Shrihari and Grewal, Rajdeep, Bonding Costs and Inside–Outside Dyadic Selling in Business-to-Business Markets (January 30, 2022). Available at SSRN: https://ssrn.com/abstract=3632460 or http://dx.doi.org/10.2139/ssrn.3632460

Huanhuan Shi

Texas A&M University ( email )

Langford Building A
798 Ross St.
College Station, TX 77843-3137
United States

Shrihari Sridhar

Texas A&M University - Department of Marketing ( email )

430 Wehner
College Station, TX 77843-4218
United States

HOME PAGE: http://mays.tamu.edu/directory/shriharisridhar/

Rajdeep Grewal (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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