Firms increasingly use vertical networks to create superior value (Lusch, Vargo, and O’Brien 2007). As a result, manufacturers often rely on partners to interact with end-consumers. Therefore, firms are training not just their own, but also their distributors’ employees to sell their products (e.g., http://www.ibm.com/partnerworld; http://www.cisco.com/web/learning/). The goal of such training programs is to improve sales partners’ knowledge and skills in order to increase firm sales performance. By focusing on training, we are interested in non-experiential, intentional learning that does not involve learning-by-doing. Instead, the partner absorbs information provided by the firm and applies it to downstream sales activities. However, the firm faces two barriers to high training ROI.
First, firms face a transfer problem which refers to the fact that often knowledge learned from training is not effectively applied to the job context making knowledge transfer a core research issue (Burke and Hutchins 2007). Second, the partner is generally involved in more than one partnership and hence is selling competing brands (Bernheim and Whinston 1985). Thus, the firm faces a classic agency problem, in which what the firm and the partner seek does do not conform. However, monetary incentives may not be enough to induce sales partners to work hard to sell the firm’s products. In addition, given the direct outlay of funds by the firm for training and the ability to observe partner outcomes in the form of firm sales, this problem is viewed by the firm as having direct implications for return on training investment. Therefore, our research question is as follows: How can firms solve the transfer-agency dilemma in order to increase firm-specific partner performance?
The proposed project solves the agency-transfer dilemma by suggesting that training must serve two distinct functions. The first and historically dominant function is the provision of knowledge and skills. The second function of training is to establish a set of motivational mechanisms that facilitate the transfer of knowledge from training to sales application and that renew the salesperson’s motivation to sell the firm’s products. We argue that training should also inspire and guide action by motivating the learner. Earlier conceptual articles support this focus (e.g., Kraiger, Ford, and Salas 1993), despite not having delivered on the view. Therefore, the aim of this project is to study the effect of motivational beliefs from training on knowledge application in partner sales activities.