How Agency-Theoretic Factors Affect the Delegation of Pricing Authority to the Sales Force: An Empirical Study


  •  Alireza Fazlzadeh    
  •  Pegah Mohammadi    
  •  Abolfazl Sepehrfar    

Abstract

Here we (1) empirically test a framework of important drivers of price delegation based on agency-theoretic (2)
investigate the impact of price delegation on firm performance. The study data's collected from a sample of 180
companies from the industrial home appliances and structural equipment industry in Iran. Result show that,
risk-aversion of salespeople is negatively and customer heterogeneity positively related to the degree of price
delegation. Also we find that information asymmetry has no relationship with price delegation. Furthermore, we
find a positive effect of price delegation on firm performance, which is amplified when market-related
uncertainty is high and when salespeople possess better customer-related information than their managers. Hence,
our results clearly show that rigid, “one price fits all” policies are inappropriate in many B2B market situations.
sales managers should grant their salespeople sufficient leeway to adapt prices to changing customer
requirements.


This work is licensed under a Creative Commons Attribution 4.0 License.
  • ISSN(Print): 1918-719X
  • ISSN(Online): 1918-7203
  • Started: 2009
  • Frequency: quarterly

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