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Goutam Challagalla, Brad Family associate professor of marketing
Goutam Challagalla, Brad Family associate professor of marketing
Ajay Kohili, professor of marketing and the Gary T. and Elizabeth R. Jones Chair holder
Ajay Kohili, professor of marketing and the Gary T. and Elizabeth R. Jones Chair holder

Study: Perceived Internal Threats Can Hurt Effectiveness of Account Teams

While account teams often serve as the critical link between a firm and its most important business-to-business customers, the effectiveness of these teams can be impeded by perceived threats from within, according to a new study.

The account managers responsible for the overall customer relationship often block their team members' access to customers and related information because of concerns about conflicting agendas, found Georgia Tech marketing professors Goutam Challagalla and Ajay Kohli, who conducted the study with Brian Murtha of the University of Kentucky (who earned his PhD at Georgia Tech).

"This phenomenon is a conundrum in that account managers interested in stronger performance with customers appear to block the very functional specialists who can help them attain better performance," write the researchers in their study,  titled "The Threat from Within: Account Managers' Concern about Opportunism by Their Own Team Members."

Team Structure

Accepted for publication in the leading journal Management Science, the study describes the typical makeup of these account teams, which firms often employ to better engage with customers. In addition to the account manager, teams usually include a number of functional specialists with deep technical and/or product expertise. For example, a turbine manufacturer's account team might include a finance specialist with expertise in leasing, a supply chain and manufacturing specialist with expertise in plant reconfiguration, and an IT specialist with expertise in tracking real-time turbine performance.

Because these specialists don't report directly to the account manager, they might have individual goals that aren't necessarily in the best interests of the customer. In addition to a salary, functional specialists often receive a commission based on the sale of their respective products. So an IT specialist might push a solution that's more expensive than what the customer needs, for example, or a finance specialist might try to meet his/her sales goals by advocating an inappropriate financial product.

"We refer to this internal threat from within as 'internal opportunism,'" note the researchers. Account managers fear that if customers catch on to it, they might take their business elsewhere.

Concerns about Opportunism

In their study, the researchers didn't focus on whether actual opportunism was taking place. Instead, they examined account managers' concern about possible opportunism. Data was collected from a Fortune 500 business-to-business reseller of office equipment. "The organization was particularly suitable because it provides solutions to customers by integrating technologies and products from a variety of different manufacturers, while offering a variety of financing options," according to the researchers.

They surveyed 350 account managers in three U.S.-based divisions of the firm, achieving a response rate of 49 percent. They also surveyed the supervisors of responding accounting managers, getting a response of 91 percent.

The study shows that the more time account managers invest in learning about and developing customers, the more concerned they become about internal opportunism by functional specialists on their teams. That's likely because hours spent learning about such details as the customer's organizational hierarchy and unique buying processes – as well as developing rapport with key individuals – are "sunk costs" for the account manager that can't be applied to other customers.

The study also shows that the more concerned account managers become about internal opportunism, the more likely they are to engage in blocking specialists from customer information or contact. This blocking could impede efforts to develop better products and solutions and result in specialists generating fewer ideas that could develop the customer relationship.

"Internal blocking defeats the purpose of having specialists on an account team in the first place," write the researchers. "Clearly, firms must find ways to reduce account managers' concerns about internal opportunism, recognizing that the resulting blocking behaviors negatively affect performance."

Dealing with Threats

Account managers are likely to be hesitant about expressing their concerns about internal opportunism to their team members for fear of being disliked or having their worries be dismissed as purely speculative, say the researchers.

But the supervisors of account managers could help solve this problem through the development of more cohesive teams as well as writing scripts (standard outlines of key points) for addressing opportunism concerns with team specialists, the researchers add. Prior research has shown that such scripts can reduce reluctance to share bad news.

These coping strategies might be particularly relevant for account managers who expect to work with customers for extended periods, according to the study. That's because the study's results show that internal opportunism concerns grow as account managers invest more and more time in customers.

However, account managers concerns about internal opportunism decline somewhat if they expect the same specialists to work regularly with particular clients. Functional specialists typically support several account managers while reporting to other supervisors. "An account manager who believes that a specialist will have a long-term relationship with a customer is likely to think that the specialist will make efforts to instill trust and act cooperatively in his or her dealings with the customer," write the researchers.

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Susan Ambrosetti
Director of Marketing & Communications