Price Delegation in Sales Organizations: An Empirical Investigation

The allocation of decision rights is an integral component of designing organizational architecture. Economists have long understood the importance of co-locating decision rights with the knowledge that is valuable to those decisions. Following this prescription, marketing scholars have developed strong theoretical arguments in favor of delegating pricing authority to the sales force. Empirical work, however, reveals a significant number of sales organizations yielding only minimal authority to their salespeople. Given this divergence between theory and practice, we develop and empirically test two mitigating factors that could potentially explain why firms restrict pricing authority. We test our hypotheses on a sample of 222 German sales organizations and find that the data are generally consistent with our conceptualization.

Experiences with Grid Marketing - Summary of Chariton Valley Beef Sales for Year 2000

Producers in the Chariton Valley Beef organization have marketed more than 10,000 head of cattle into grid markets over the past three years. Data from 134 lots were summarized, with 3,791 head of cattle marketed into four grid markets. Producers averaged $26.05 per head premiums. Premiums and discounts ranged from a positive $79.01 to a negative $40.44 on tots delivered.

The Integration of Electricity from Renewable Energy Sources in the European Union Electricity Market – The case for “Smart Grids”

The power sector is to play a central role in a low carbon economy. In all the decarbonisation scenarios of the European Union renewable energy sources (RES) will be a crucial part of the solution. Current grids constitute however major bottlenecks for the future expansion of RES. Recognising the need for a modernisation of its grids, the European Union has called for the creation of a "smart supergrid" interconnecting European grids at the continental level and making them "intelligent" through the addition of information and communication technology (ICT). To implement its agenda the EU has taken a leading role in coordinating research efforts and creating a common legislative framework for the necessary modernisation of Europe’s grids. This paper intends to give both an overview and a critical appraisal of the measures taken so far by the European Union to "transform" the grids into the backbone of a decarbonised electricity system. It suggests that if competition is to play a significant role in the deployment of smart grids, the current regulatory paradigm will have to be fundamentally reassessed

Stress parameters and behaviour of horses in walkers with and without the use of electricity

In order to investigate stress responses of horses in walkers with and without electricity, 12 horses were trained during 3 weeks in a horse walker with and without the use of electricity (3.7 kV). To evaluate the stress response, cortisol levels in the blood were measured, the heart rate was monitored using the Polar® system and the behaviour was evaluated. Neither the cortisol levels nor the heart rates showed any relevant statistically significant difference between horses moved in the horse walker with or without the use of electricity. The highest cortisol levels and heart rates were recorded during the first week (habituation period). A significant difference could be observed regarding spontaneous compartment changes: while this happened mainly during the first week and before the first use of electricity, no horses changed compartments in the periods when electricity was used and thereafter. The results of this study indicate that the use of electricity in the horse walker does not seem to cause significant detectable stress in the horses.

The Strategic Role of the Sales Force: Perceptions of Senior Sales Executives

Current models of sales force strategy imply formidable information processing demands, which leads us to take a cognitive approach to studying the issue of sales force strategy. We focus on how top-level executives use mental models of sales force performance to simplify the issue of sales force strategy. We interviewed 74 senior executives responsible for their firms’ selling function using the repertory grid approach, as this methodology has been shown to be particularly effective at uncovering the collective cognitive maps on which executives’ decisions and behaviors are based. Executives identified a broad set of 37 strategic concepts that they felt distinguish the sales force efforts of directly competing companies. A second set of sales executives classified the 37 concepts into capabilities, resources, and organizational context concepts. Based on the classification results and feedback from both sets of executives, we developed research propositions for examining sales force strategy and provide directions for future research.

The influence of formal and informal sales controls on customer-directed selling behaviors and sales unit effectiveness

Adaptive selling (AS) and customer-oriented selling (COS) constitute two key customer-directed selling behaviors for the success of the modern sales force. However, knowledge regarding the organizational factors that can induce salespeople to engage in those behaviors is strikingly limited. Against this background, we develop a comprehensive model that delineates the influences of formal and informal sales controls on AS and COS and, through them, on sales unit effectiveness. Based on a sample of sales managers in a major European Union country, we present new evidence that (a) formal and informal sales controls exert differential impact on salespeople's AS and COS behaviors; (b) AS directly and positively influences sales unit effectiveness; (c) COS affects sales unit effectiveness only indirectly, i.e. by fostering AS; and (d) outcome and cultural controls directly improve sales unit effectiveness. We conclude with a discussion of our findings for academics and practitioners.

Game Theoretic Bidding Strategies for Auctions in Green Electricity Markets

Electricity markets in the United States presently employ an auction mechanism to determine the dispatch of power generation units. In this market design, generators submit bid prices to a regulation agency for review, and the regulator conducts an auction selection in such a way that satisfies electricity demand. Most regulators currently use an auction selection method that minimizes total offer costs ["bid cost minimization" (BCM)] to determine electric dispatch. However, recent literature has shown that this method may not minimize consumer payments, and it has been shown that an alternative selection method that directly minimizes total consumer payments ["payment cost minimization" (PCM)] may benefit social welfare in the long term. The objective of this project is to further investigate the long term benefit of PCM implementation and determine whether it can provide lower costs to consumers. The two auction selection methods are expressed as linear constraint programs and are implemented in an optimization software package. Methodology for game theoretic bidding simulation is developed using EMCAS, a real-time market simulator. Results of a 30-day simulation showed that PCM reduced energy costs for consumers by 12%. However, this result will be cross-checked in the future with two other methods of bid simulation as proposed in this paper.

Strategic Behavior in Day-Ahead and Real-Time Markets for Electricity: Offer Cost or Payment Cost Minimization?

This study compares the procurement cost-minimizing and productive efficiency performance of the auction mechanism used by independent system operators (ISOs) in wholesale electricity auction markets in the U.S. with that of a proposed alternative. The current practice allocates energy contracts as if the auction featured a discriminatory final payment method when, in fact, the markets are uniform price auctions. The proposed alternative explicitly accounts for the market clearing price during the allocation phase. We find that the proposed alternative largely outperforms the current practice on the basis of procurement costs in the context of simple auction markets featuring both day-ahead and real-time auctions and that the procurement cost advantage of the alternative is complete when we simulate the effects of increased competition. We also find that a trade-off between the objectives of procurement cost minimization and productive efficiency emerges in our simple auction markets and persists in the face of increased competition.

Efficiency in Deregulated Electricity Markets: Offer Cost Minimization vs. Payment Cost Minimization Auction

This study of the wholesale electricity market compares the efficiency performance of the auction mechanism currently in place in U.S. markets with the performance of a proposed mechanism. The analysis highlights the importance of considering strategic behavior when comparing different institutional systems. We find that in concentrated markets, neither auction mechanism can guarantee an efficient allocation. The advantage of the current mechanism increases with increased price competition if market demand is perfectly inelastic. However, if market demand has some responsiveness to price, the superiority of the current auction with respect to efficiency is not that obvious. We present a case where the proposed auction outperforms the current mechanism on efficiency even if all offers reflect true production costs. We also find that a market designer might face a choice problem with a tradeoff between lower electricity cost and production efficiency. Some implications for social welfare are discussed as well.