The Evolving Role of the Global Account Manager in Theory and Practice


Master's Thesis, 2002
132 Pages, Grade: 5,5 (Schweiz) = 1,5 (Deutschlan

Excerpt

Table of Contents

List of Abbreviations and Acronyms

List of Figures

List of Tables

1 Introduction
1.1 Objectives of this Study
1.2 Contribution to Theory and Practice
1.3 Methodology
1.3.1 Research Strategy
1.3.2 Quantitative Data Collection: GAM Survey
1.3.3 Qualitative Data Collection: Expert Interviews
1.3.4 Layout of this Study
1.3.5 Limitations

2 Theoretical Foundation
2.1 Definition of Terms and Concepts
2.2 Business-to-Business Environment
2.3 Evolving GAM Program
2.4 Organizational Forms of GAM Programs
2.5 Challenges of the GA Manager Position
2.6 Competency Model of a GA Manager
2.7 Different Roles – A Conceptual Framework
2.8 Evolving Roles Depending on the Organizational Structure
2.9 Evolving Roles Depending on the Account Relationship Stage
2.10 Evolving Roles Depending on the Industry Sector

3 Status Quo in Practice
3.1 The GA Manager Profile
3.2 GA Manager Profile and Performance
3.3 GA Manager Training
3.4 GA Manager Career Development

4 Discussion and Implications
4.1 Profiling the GA Manager
4.1.1 Role Determinants and Blurred Boundaries
4.1.2 Linking Competencies to Performance
4.1.3 Impact of Gender
4.1.4 Possible Future GA Manager Competencies and Roles
4.2 Holistic HRM Framework for GAM
4.3 Recruitment
4.3.1 Developing a GA Manager Job Profile
4.3.2 ‘Super’-GA Manager
4.3.3 Recruiting Young High Potentials or Senior Managers
4.3.4 Recruiting Internally or Externally
4.3.5 Long-Term Talent Pool
4.3.6 Recruiting Process
4.4 Appraisal and Remuneration
4.4.1 Appraisal Process
4.4.2 Metrics and Measurement
4.4.3 Factors Affecting Performance
4.4.4 Low-Performers
4.4.5 Role Ambiguity and Role Set Analysis
4.4.6 Remuneration Package
4.5 Training
4.5.1 Challenges of GAM Training
4.5.2 Framework for GAM Training
4.5.3 Action Based Learning
4.5.4 E-Learning
4.6 Career Development
4.6.1 The Need for a GAM Career Track
4.6.2 Career Management in Flat Organizations
4.6.3 Internal Promotion or Proactive Outplacement
4.6.4 Alumni
4.7 Retention

5 Conclusion and Directions for Future Research

Appendix A: Statistical Survey Data

Appendix B: HR Survey

Appendix C: GAM Survey

Appendix D: Expert Interview Guideline

Appendix E: List of Interviewees

References

List of Abbreviations and Acronyms

illustration not visible in this excerpt

List of Figures

Figure 1: Structure of the Thesis

Figure 2: Components of a GA Manager Competency Model

Figure 3: GA Manager Role Continuum

Figure 4: GA Manager Role Determinants – A Conceptual Framework

Figure 5: Exemplary GAM Program

Figure 6: GA Manager Profile and Performance from the HR Point of View

Figure 7: GA Manager Profile and Performance from the GAM Point of View

Figure 8: Training Needs Perceived by HR

Figure 9: Training Needs Perceived by GA Managers

Figure 10: Approaches to GA Manager Training

Figure 11: Demands on GAM Training Methods

Figure 12: Talent Pool for GA Managers

Figure 13: Career Path for GA Managers

Figure 14: Total Length of Time as GA Manager until Change of Job

Figure 15: Occupation following the GA Manager Position

Figure 16: Coaching and Career Management from the HR Point of View

Figure 17: Coaching and Career Management from the GAM Point of View

Figure 18: Holistic HRM Framework for GAM Programs

Figure 19: Developing a GA Manager Job Profile

Figure 20: Factors Moderating the Positive Relation ‘Competence – Performance’

Figure 21: Exemplary Role Set Analysis

Figure 22: The Connection between KM and HRM

Figure 23: GAM Training Development Cycle

Figure 24: Assessment of Training Needs

Figure 25: Linking HRM and KM

Figure 26: E-Methods Supporting Exemplary GAM Learning Project

List of Tables

Table 1: Account Relationship Stages and Corresponding Roles

Table 2: GA Manager Competencies across Industries

Table 3: Competencies of a GA Manager Depending on the Account Relationship

Table 4: Propositions for Profiling the GA Manager

Table 5: Comparison of Global- and Key Account Manager Profiles

Table 6: Proposition for an Integrated HRM Framework for GAM

Table 7: Propositions for Recruiting GA Managers

Table 8: Exemplary Job Description of an Institutional GA Manager

Table 9: Propositions for Appraisal and Remuneration

Table 10: Propositions for Training

Table 11: Propositions for Career Development

Table 12: Proposition for Retention

1 Introduction

Global account management (GAM) has been defined as ‘… an organizational form and process in multinational companies by which the worldwide activities serving a given multinational customer are coordinated centrally by one person or team within the supplying company’ (Montgomery et al, 1998: 1). GAM is on top of the agenda for most multinational companies but despite its importance, concepts and best practices which could further understanding are rare, and many implementation has not met expectations.

One might expect academic research to have made considerable contributions to further both practical and theoretical understanding of GAM. The limited research available shows that this is not the case. A reason could be that GAM is a subject originating from practice and not the academic field (Zupancic and Senn, 2000: 3). Existing research on GAM focuses on topics such as what is GAM, when should GAM be adopted, what are problems when implementing GAM and how can they be solved, and what affects GAM performance. Recent works have discussed more focused aspects of GAM, such as the GAM organization (Lockau, 2000), international key account teams (Zupancic, 2001) knowledge management (Arnold, 2002) or services and solutions (Müllner, 2002).

Companies pursuing account management programs already have knowledge about for example how to segment clients, how to develop integrated solutions or how to adapt processes. However, human capital as key asset has not yet received due attention, neither for KAM nor GAM.

Millman and Wilson (1995: 20) remark: ‘The most striking observation from our work is how the presence/absence of a few enthusiastic and competent people ... can ease progression to a mature stage of KAM.’ Senn (1996: 4) notes that staffing for KAM is difficult due to fluctuation among high potentials and the lack of specification of the position. Johnson (1997: 54) explains that when reorganising Kodak’s account management, redefinition of roles and expectations was at the core of the process. Bradford and Rollinson (2000: 53) remark that the key account manager is the single most important driver of profitable and loyal customers. However, the key account manager often feels isolated and unsupported due to the vague role definition and lack of adequate training. The attraction, selection and retention of account managers are as important as that for key accounts (Bradford and Rollinson, 2000: 54). Role clarity and definition are vital to the success of the role, however, KAM role ambiguity is a common disease (Bradford and Rollinson, 2000: 58). Belz et al (2002: 46) state the importance of human assets as one of the bedrocks in the St. Gallen KAM Concept.

The importance of the account manager but the lack of understanding of latter one’s role continues in recent GAM literature: Yip and Madsen (1996: 40) specify the global account manager (GA manager) on top of the list when describing ‘how to make it work’. Lockau and Barth (1998: 85) found in their survey that the implementation faces manifold problems due to inappropriate selection and training of GA managers. Lockau (2000: 102, see also Gosselin and Heene 2000: 24 or Bradford and Minshull 2001: 9) further elaborates on the importance of the right qualification of a GA manager: without adequate GA managers and leadership concepts, organisational problems emerge that translate from an internal problem to an external coordination problem with the GA. Wilson et al (2000: 15) find in their Global Account Management Study Research Report that the GA manager is the key to the effective implementation of GAM processes. However, concepts for career development are missing (Millman and Wilson 2000 or Weilbaker and Weeks 1997: 56). Bradford and Minshull (2001: 8, see also Werwie and O’Connor 2001: 38) notice that only vague and unsupported definitions of what the role of the account manager is exist. Wilson and Speare (2002: 11) again express the importance of clearly developed skills profiles, the full understanding of the role of a GA manager, and management development measures for implementation. Despite the importance of the GA manager, Napolitano (2002: 4) points out that today, still too many companies invest inadequately in key human performance areas.

Research in this particular field of GAM is rare: Lockau (2000) discussed certain aspects of HRM for GAM, Bradford and Rollinson (2000: 55) briefly presented a model of how to develop and manage account managers, Wilson and Speare (2002, see also Millman and Wilson 2000) analysed possible roles of a GA manager. Finally, McDonald and Holt (2000) proposed a future research project on the role of the GA manager.

Consequently, this study aims at improving the understanding of the GA manager’s role by focusing on the needs observed before, and by building on existing research in this particular area. Without clear criteria, recruiters select, managers manage, trainers train and career planners plan according to different or conflicting images of the capabilities required of the job (Kubr and Prokopenko, 1989:88).

1.1 Objectives of this Study

Based on the literature gap and the need for increased understanding of the GA manager’s role identified before, the following research questions will be analyzed in this paper:

- What are the theoretical constituents (competencies) and determinants of a GA manager’s role?
- How are these constituents and determinants perceived in practice, and what is the status quo of management development tools and processes for GAM?
- What are the critical success factors for human resources management when creating an environment that is conducive to the development of the GA manager’s role?

1.2 Contribution to Theory and Practice

From a theoretical perspective, this study moves the level of analysis from the organizational level down to the individual GA manager, thus increasing the understanding and the formation of theory in a field of GAM that has not yet been sufficiently explored.

From a practical point of view, this study can help GA managers to better understand their own roles, thus coping with ambiguity and preparing themselves for the challenges lying ahead. Furthermore, GAM program directors can learn more about how to manage their most important asset, e.g. how to identify the best matching candidate or how to retain talent, in order to create an environment that is conducive for GA managers to succeed. Finally, head of human resources or managers with conceptual HR responsibility for GAM can learn more about this new position and ways of working together with management from the GAM program to maximise success.

1.3 Methodology

This section briefly presents research strategy, research process, layout and limitations of this study.

1.3.1 Research Strategy

The choice of the research strategy depends on what the problem looks like, what questions the problem leads to and what results are desired in the end. The evolving nature of GAM and in particular of the area concerning the GA manager necessitates a flexible and non-restrictive research methodology. The study is therefore designed as empirical explorative research, which is often conducted in cases where the scope of the problem is still unclear. This research approach enables the researcher to familiarize himself with the problem to be studied. In particular, this research follows the concept of practice-oriented marketing research proposed by Tomczak (1992: 83) to identify problems and infer propositions which are relevant in practice.

Consequently, the following research methods have been applied: secondary research in the form of analyzing existing literature, and primary research by conducting a written survey to obtain empirical findings, and several personal, in-depth interviews with experts from the field to substantiate findings and establish the link to practice.

1.3.2 Quantitative Data Collection: GAM Survey

Between June 17th and July 8th 2002, a survey was conducted among 210 enterprises located in Switzerland or the Principality of Liechtenstein. Two evaluate the GA manager position from different angles, two slightly different versions of the survey were developed: one was targeted at GA managers (see Appendix C) and the other targeted at the head of human resources (see Appendix B) within the same enterprise. The selection of the companies followed a stratified sampling method with a deliberate concentration (Babbie, 1990: 85). Based on the 2001 Census of the Swiss Federal Statistical Office covering businesses, companies were selected due to their location, their number of employees (>500) and the industry sub-sector to obtain a sample of companies which likely run a GAM program. For more information regarding the survey design and the survey population, please refer to Appendix A.

The questions of the surveys were based on secondary research and an earlier survey that was conducted by Senn (1996) in 1993 for KAM. The questions regarding the profile of a GA manager were similarly structured as in Wotruba and Castleberry (1993). The surveys were designed in German to provide valid comparison to the KAM study of Senn (1996) and to consider the native language of the majority of the participants.

The total response rate is 22.4%; more HR managers (25.7%) responded than GA managers (19.0%). When comparing to earlier surveys within the field of GAM (Zupancic 2001: 27, Müllner 2002: 21, or Wilson et al 2000: 22), the response rate can be considered to be good.

1.3.3 Qualitative Data Collection: Expert Interviews

A total number of fifteen expert interviews were conducted between June 10th and July 26th 2002 (see Appendix E). Most of the participants are members of the Strategic Account Management Association (SAMA). The participants are located in Europe and represent different industries and job positions, though GA managers were emphasized. Due to the geographical dispersion, most interviews were conducted on the telephone. Typically, telephone interviews lasted for thirty minutes while personal interviews were more in-depth, lasting up to one hour. The interview was semi-structured and covered three topics: the GA manager profile, training, and career development (see Appendix D). Because of the sensitivity of the topics discussed, answers of interviewees are treated confidentially in this paper.

1.3.4 Layout of this Study

Figure 1 presents the structure of the study by delineating the major topics inferred from the research questions, the research methods used and research results to be expected.

Figure 1: Structure of the Thesis

illustration not visible in this excerpt

Source: own illustration

1.3.5 Limitations

The following limitations have to be noted: firstly, the survey conducted for this study was based on a sample of companies based in Switzerland and the Principality of Liechtenstein and would have to be expanded to account for possible international and cultural differences. Furthermore, the survey included GA managers and managers responsible for HR, but not clients. In addition, a survey is a reflection of a condition at a certain point in time and cannot be solely used to describe evolving events. Secondly, the level of analysis is the GA manager and his roles and requirements, and not teams of GA managers (e.g. group dynamics). Thirdly, the HRM concepts developed and measures proposed should be considered as impetus for further refinement and not as a concluding checklist.

2 Theoretical Foundation

The purpose of this chapter is to build the theoretical foundation of this paper, based on thorough secondary research. Firstly, definitions for the major terms and concepts used are presented. Subsequently, the environment of a GA manager is described by stressing the peculiarities of the B2B-arena, by re-enacting the steps from KAM to GAM, and by outlining organizational forms of GAM programs. This focus then makes it possible to present the major challenges a GA manager faces within this playing field and to derive competencies necessary to succeed. Finally, the possible roles of a GA manager are discussed and analyzed according to a conceptual framework which delineates possible determinants of the GA manager role.

2.1 Definition of Terms and Concepts

This section aims at briefly introducing the main terms and concepts used in this paper. Since research on GAM per se is sparse and recent, semantic confusion is prevalent. In most cases, neither academics nor practitioners have agreed upon unambiguous terminology.

Global Account Management: Terminology in practice varies widely ranging e.g. from international (key) account management, corporate (key) account management or worldwide account management to parent account management. Gosselin and Heene (2000) present in their paper a good summary of nomenclature used and definitions to be found in the literature. In this paper, GAM is understood as defined by McDonald et al (2000: 197): ‘Global account management is an organizational form and process by which the worldwide activities serving a given multinational customer are coordinated by one person or team within the supplying company.’

Global Account: The terms used for GAs are directly related to the terminology being used to describe the program. Thus, terms such as international account, parent account or corporate account can be found in practice. McDonald et al (2000: 201) state that ‘A global account is most commonly identified as being ‘big’ (large and prominent) in lots of countries simultaneously.’ A GA not only differs from for example a key account in terms of global reach, but also in other ways such as its strategic importance. Thus, a more precise definition of Wilson et al (2000 cited Wilson and Speare 2002: 2) is used in this paper: ‘A global account is one that is of strategic importance to the achievement of the supplier’s corporate objectives, pursues integrated and coordinated strategies on a world-wide basis... and demands a globally integrated product/service offering from its suppliers.’

Global Account Manager: Again, terminology is linked to the program name, thus a program called ‘corporate account management’ is likely to name the manager ‘corporate account manager’. The GA manager is defined in this paper as follows: The global account manager is the single point of contact between the supplier and buying organization that is responsible for building up, servicing and maximizing the relationship of the account that is assigned to him.

Competency: Millman and Wilson (1999: 4) remark that academics and practitioners tend to mix levels of competencies. In general, competences can be identified at the organizational, group/team or individual level; e.g. the right selection of prospective GA managers is an organizational competency. However, competency in this paper is mainly observed at the individual level of the GA manager, thus the definition: a manager’s competence is his ability to perform a certain job or tasks and to attain certain performance levels.

Competency Model: It is defined in this paper according to Kubr and Prokopenko (1989: 89) as ‘… a variant of a job description that describes the key capabilities or competencies required to perform a job’, in this case the job of a GA manager. The model pays more attention to describing the qualities such as skills, knowledge, personal attributes, experience and attitude. It is particularly suitable for describing jobs that require high levels of creativity, judgment, learning, flexibility and tolerance of ambiguity, and jobs that are difficult to describe in conventional ways (Kubr and Prokopenko, 1989: 89), thus corresponding with the GA manager position.

Role: According to Fondas and Stewart (1990: 6), the concept of role within the managerial arena links the individual behavior characteristic of persons occupying a position to the functioning of the larger social system. The term ‘role’ can be ambiguous: it can mean expectations held by the role set, designate patterned predictable behavior, or refer to the social or occupational position held (Fondas and Stewart, 1990: 11). Further, McDonald and Holt (2000) remark that the task of the GA manager has to be seen both in relation to role responsibilities and in relation to the network of relationships. The term ‘role’ is used in this paper closely linked to the competency model: the role of a GA manager is the occupational position held by him. In other words, situational context challenges and a corresponding competency model circumscribe the role of a GA manager. The context consists of several possible groups of role senders such as the account team, superiors, clients or peers.

Evolving: This term is linked to the role of the GA manager; how it develops naturally and gradually. In this paper, the ‘evolving role’ of the GA manager is understood as how the role develops within the GAM arena or the GA manager’s life within the GAM program. Historical comparisons beyond the GAM arena (e.g. to KAM) are drawn where necessary for understanding or the derivation of concepts.

2.2 Business-to-Business Environment

This section briefly recapitulates the peculiarities of the B2B environment which builds the foundation for the arena within which the GA manager performs.

In general, B2B markets are concentrated in terms of size, scope and geography; purchases are large and individual and usually require additional services. The nature of demand is insofar different from consumer markets that it is difficult to spark demand and that the seller is part of a (future) bidding process, required to handle the time gap through intense commitment and branding. The buyer’s organization is usually structured as a committee consisting of several people with different roles (e.g. initiators, gatekeepers, influencers, users, deciders, purchasers etc.) and often different goals (e.g. CFO vs. COO). Further, buyers are qualified and very much process oriented. Moreover, buyers focus on criteria such as value, service, reliability, delivery and proximity. Buying behavior is based on actual needs and reflects risk aversion since large purchases come along with many uncertainties (e.g. supplier or product quality). Finally, the buying process encompasses many steps through involvement of all parts of the buying committee, thus being lengthy.

On the one hand, suppliers realized that the sales process is costly and binds many company resources. On the other, experience showed that the customer base follows a Pareto distribution or the ‘80/20’ rule where 20% of clients generate 80% of total revenues (Gosselin and Heene, 2000: 6). Consequently, selling companies had to develop new sales and marketing approaches (such as super salesmanship, strategic selling or team selling) to succeed in this complex and dynamic environment and optimally allocate their resources. When changing from a transactional- to a relationship point of view of business, realizing that ‘big’ clients require preferred treatment, three approaches were in particular important: consultative-selling (closely dealing with issues of the client’s business), value selling (selling systems or solutions) and relationship management (reducing uncertainty and ambiguity, lowering transactional costs). How this change of view led to account management is part of the discussion in the following section.

2.3 Evolving GAM Program

This section presents the different stages of account management and terminology to be found in practice and literature, thus further delineating the environment within which today’s GA managers perform.

As described in the previous section, a change of view from transactional business to relationship management took place. Other changes in the procurement process, namely centralization through technology, need for increased effectiveness, strategic sourcing, interface simplification through backwards integration, and the advent of B2B exchanges (Capon, 2001: 12) further spurred the underlying shift. To cope with this increased pressure on the supply chain, sellers began to focus all their efforts to realize maximum impact and introduced one face to the customer.

Consequently, many companies introduced KAM programs to increase retention of key customers (acquisition costs x-times higher than retention spending), to achieve synergies through partnership (e.g. R&D) and differentiation in mature/commodity markets, and to reduce transaction costs (Senn and Belz, 1994: 46). Though KAM is understood and realized in many different ways in practice, e.g. big sales clients, strategic clients or key clients (Senn and Belz, 1994: 12), the underlying conceptual approach does not diverge much. Senn and Belz (1994: 14) define KAM as follows: ‘Key Account Management is the systematic analysis, selection and servicing of existing or prospective clients of a company.’ Or in other words by McDonald et al (2000: 25): ‘KAM is a management approach adopted by selling companies aimed at building a portfolio of loyal key accounts by offering them, on a continuing basis, a product/service package tailored to their individual needs.’ KAM was of particular interest in the period of 1980 to 1993 (Senn and Belz, 1994: 21). In Western Europe, KAM was first introduced in the consumer goods industry due to price pressure, followed by the services industry which aimed at differentiation, and finally the industrial goods industry which had to deal with ever more complex offers and buying centers. Gosselin and Heene (2000: 14) give in their paper an extensive historical review of KAM.

The concept of ‘National Account Management’ or NAM might appear – from a European perspective – to be an extension of KAM. However, Tosdal (1950 cited in Senn 1996: 13) already introduced the term ‘national accounts’ in the United States in the 50s. Further, the term NAM emerged in the 60s (SAMA, 2002) and the National Account Management Association was founded in 1964 – all quite some time before everyone was talking about KAM. When compared to definitions for KAM, NAM does not appear to be different. Shapiro and Moriaty (1982 cited in Verra 1994: 2) remark that ‘The general objective of national account management is to provide incremental profits from large or potentially large complex accounts by being the preferred or sole supplier.’ Senn (1996: 15) does also not perceive a difference between KAM and NAM. It appears that NAM is to a large extent attributable to B2B account management in the United States where the huge home market creates the need for a ‘national’ account management, considering regional differences. One might consider Euro-(Key)-Account Management or EAM as counterpart to the American NAM. However, the concept of EAM is not widespread in the literature, probably due to its resemblance to International (Key) Account Management or IKAM. For the interested reader, Weilbaker and Weeks (1997) discuss in their article the evolution of NAM from a literature perspective in-depth.

IKAM can be described as a next step in terms of account management. Due to the gradual liberalization of national markets, an increasing number of companies began to tap other countries as sales area or even physically expanded the business. Cross-border supply-chain activities also required focused efforts by selling companies to succeed in a foreign environment or to coordinate purchases across several countries. Still, at that time, transnational companies were far from being global in reach. However, former transnational companies have evolved into multinationals or global players, thus actually running GAM programs under the former label ‘IKAM’.

Gradually, the term Strategic Account Management or SAM appeared. Gosselin and Heene (2000:11) consider SAM to be an ‘umbrella’ term which does not describe a particular account management concept. This view is supported by the description of SAM by the Strategic Account Management Association (SAMA, 2002) which notes that SAM is practiced on the national, regional, multinational or global level. On balance, SAM stresses even more the importance of a long-term business view (customer lifetime value) and higher levels of expertise within an increasingly complex customer relationship (Wilson and Speare, 2002: 120).

Finally, GAM emerged as top priority on the to-do list of global companies in the 90s and – as most practitioners are likely to admit – will continue to be a burning issue for the coming years. Levitt’s (1983) famous article on globalization describes how markets globalize and how multinational companies have to change and become global corporations to remain successful. This development increased pressure on existing account management programs. Wilson et al (2001: 9) remark that ‘GAM is a selling company’s response to the challenge of managing strategically important customers who are facing increasing globalization of their industries.’ Yip and Madsen (1996: 25) explain in their paper in detail the industry globalization drivers at work and how organizations respond in terms of GAM programs. GAM is described to be even larger in scale, to be more strategic and to encompass truly global offerings. But what are the real distinctive features when compared to other account management concepts? On the one hand, the strategy for global reach has to be translated into organizational change: organizational complexity within a GAM program increases dramatically when compared to e.g. KAM. On the other hand, global context brings along cultural diversity (e.g. different value systems) and other factors such as time and distance, thus affecting existing processes, systems, structures and people involved. It will become more obvious in following sections of this paper how these two factors – organizational complexity and cultural diversity – shape the arena of a GA manager.

Since most concepts developed in this paper resort to earlier findings and concepts of other forms of account management, it is appropriate to consider whether GAM is a consequent development of KAM or actually something completely different. Yip (1999 cited McDonald et al 2000: 197) states that achieving global scope in the organization of key account activity through GAM is the ultimate challenge; the ‘olympics’ for key account strategists. Further, Capon (2001: 336) remarks that GAM is an extension of KAM and not profoundly different. Zupancic and Senn (2000: 9) also describe GAM as new phase for KAM and consequent further development. Wilson and Speare (2002: preface) express the opinion that there are strong similarities between GAM and other forms of account management. Wilson et al (2001: 10) explicitly acknowledge that NAM is important for GAM learning, and that GAM is in some respect and extension of NAM (Wilson et al, 2001: 167). In conclusion, GAM can be considered to be an extension of earlier account management forms, and earlier findings can be transferred to GAM as long as the distinctive differences that were pointed out earlier are accounted for.

What will follow the GAM programs of today? It is likely that the focus on the entire value chain will be intensified. However, value chains are disintegrating and gradually being replaced by value systems. Thus, future supply chain management might have to manage value across different value systems instead of value chains. Buyers could be in favor of a global value management team which manages the entire value system or ‘keiretsu’. It is still in the stars whether such a value management team would be an elevated GAM or if a new position would emerge and be superimposed.

Before concluding this section, three annotations have to be made. Firstly, companies implementing account management programs do not necessarily have to build one by one on the forms described before. The survey conducted for this paper showed that some companies implement GAM programs without having prior account programs. Nevertheless, companies building on existing account programs can profit from experience and are more likely to have the right (human) resources to make the next step. Secondly, the section on definitions in this paper already pointed out the prevalent semantic confusion. This inconsistency of terms has been a barrier to the development of the field. Wilson and Speare (2002: 1) note that the term ‘global account’ is often used loosely; Verra (1994: 3) also notices semantic confusion. Furthermore, Belz (1999: 163) states that KAM implementation faced problems due to inconsistent terminology. Gosselin and Heene (2000: 23) mention that even for KAM, no consensus is reached on a basic definition. Definitions are not only blurred but also one-sided: in most cases, concepts and terms are only described from the supplier point of view and disregard the perception of the buying organization (Verra, 1994: 3). However, some researchers have begun to include the account’s point of view (e.g. Pardo 1997 or McDonald and Rogers 1998). Finally, it has to be remarked that until now, GAM is a predominantly Western concept. One should consider what impact GAM programs have on non-Western cultures and in what way GAM programs could gain valuable insights from other cultures (e.g. Asian approach of relationship management) until GAM emerges outside the Western hemisphere.

2.4 Organizational Forms of GAM Programs

In the previous section, the GAM environment was described. This section now discusses how GAM programs are normally implemented within an organization, thereby further delineating the GA manager’s margin and opportunities for development.

The first criterion for locating the GAM program within the larger organization is the employment of a GA manager. In general, the employment can either be functional or institutionalized (Lockau, 2000: 247). Functional means that tasks of a GA manager are assigned to existing units (e.g. sales coordination or regional headquarters). In this case, a GA manager as defined earlier on in Section 2.1 is non-existent. This approach can only be deemed advisable if the GAM program is of low importance or very limited resources can be allocated for this endeavor. A GAM program is considered to be institutional if a new position within the organization is created. Such a set-up brings along a strict separation of personnel and likely endows the program with more authority. In practice, a third form described as ‘pretended institutionalization’ (Lockau, 2000: 248) or ‘militia account management’ (Senn and Belz, 1994: 53) can be identified. This means that the tasks of a GA manager are assigned to an existing position – often the national account manager – as additional duties. However, this leads in most cases to conflicts of interest since the (short-term) targets of national business units often interfere with (long-term) targets of GAM. Consequently, this paper refers to the GA manager working out of an institutionalized and independent position.

A second criterion for classifying the GAM program within an organization is the positioning of the GA manager. Firstly, the GA manager can be positioned within an operating unit (e.g. country organization) reporting to the country sales director. Secondly, a double-subordination can be introduced where the operating unit is in charge of disciplinary authority while a central unit is in charge of subject authority. Or the GA manager can be centrally subordinated: the GA manager is directly led by a central unit or senior manager (e.g. GA director or board). Pros and cons are as follows: while the GA manager can maintain closer customer contact in an operating unit, possible conflicts of interest increase and less leeway to unfold GAM opportunities is available (Lockau, 2000: 272). In the following sections, the GA manager is considered to be positioned within a central unit and not to be bound to directives from operating units.

A third criterion is the degree of authority with which the GA manager is endowed. The GA manager probably has least authority when taking up a special function that is assisting a line function by issuing recommendations. Increasing authority is given to the GA manager if he takes up a matrix function, thus sharing authority over operating units with for example a national sales director. Maximum authority is only feasible if the GA manager assumes a line function, hence having the sole authority to issue directives for GAM tasks concerning operating units. This paper considers the GA manager to have authority as outlined for a matrix or line function.

To sum up, employment, positioning and authority of GA managers not only depend on the vision, corporate culture and commitment of the organization which introduces a GAM program. Rather, limited resources can restrict opportunities and necessitate that GAM initiation models are pursued in the beginning until the program becomes self-funding. More comprehensive descriptions of organizational GAM forms can be found in Lockau (2000).

2.5 Challenges of the GA Manager Position

After delineating the environment within which the GA manager is performing and developing, this section builds the foundation for a GA manager competency model by discussing occupational challenges which are commonly faced by GA managers.

For this purpose, challenges which are consistent with the GAM environment are drawn from KAM literature, in particular from Dehr (1994: 188), Capon (2001: 97) and Senn (1996: 58). On balance, a GA manager faces the challenges of…

…developing strategic direction in relation to the individual account, conducting business planning and allocating resources;

…building and leading the account team, coaching members and developing their capabilities;

…managing relationships internally and externally;

…identifying business opportunities and managing their realization;

…managing the business by taking responsibility (perhaps even for P&L) related to the client business, monitoring progress, taking corrective action, and ensuring the implementation of strategy and action programs;

…monitoring and ensuring customer satisfaction; and

…managing the account information system.

In comparison, Wilson and Speare (2002: 100) describe similar challenges for the GA manager. But what are the distinctive differences when comparing challenges a GA manager faces to those for example a key account manager has to deal with? It was pointed out in Section 2.3 that increased organizational complexity and cultural diversity shape the GAM environment. Consequently, a GA manager faces all the more the challenges of…

…managing a complex and dynamic relationship network internally (on a global scale) and externally across the extended enterprise, thereby dealing with informal structures and the need to boundary-span two organizations from the board level to single operating units. Wilson and Speare (2002: 125) define the increasing complexity in terms of different homogenous groups (horizontal differentiation), hierarchical levels (vertical differentiation) and geographical scope (spatial dispersion).

…coping with increased ambiguity stemming from different role sets, and handling the ‘schizophrenic’ situation of having direct responsibility for the client while often lacking authority to issue binding directives to operating units.

…pursuing a global-local strategy by centralizing one part of the organization (e.g. customer solution) while decentralizing another part (e.g. local sales/after sales), and simultaneously reconciling factional interests.

…motivating a diverse and often virtual workforce with vastly different values, ethnic backgrounds, languages and work styles, thus embodying the ‘cheerleader’ for all parties involved.

…creating value for both companies beyond mere products/service offerings, including among others the integration of processes, the building of joint teams or the identification of synergies when combining the core competencies of the seller’s and buyer’s organization.

...not only managing information systems but converting information into knowledge, spurring internal KM and applying knowledge to devise new solutions or improve processes.

Although some challenges a key account manager faces might be less important to a GA manager (e.g. managing the actual sales force), it generally appears that the challenges a GA manager has to cope with are more demanding. To sum up, a GA manager has to be rather a true world-class master in orchestrating the business than a junior conductor leading a team of recruits.

2.6 Competency Model of a GA Manager

This chapter builds on the previously identified challenges a GA manager faces. A competency model tailored to a GA manager is developed by first delineating a general framework to cluster competences. Subsequently, the particular competencies of a GA manager are identified by considering concepts in KAM literature and the distinctive challenges of GAM.

A GAM competency model or framework represents an important element for the entire HRM. It not only helps to better demarcate and understand roles of a GA manager but also to improve efforts directed towards selection, recruitment, performance management, development/training, and career pathways (Bradford and Minshull, 2001: 12). Defining a competency model for the key account manager was already a difficult task (Dehr, 1994: 191), thus companies are likely to face more ambiguity when designing it for GAM.

The general framework of this paper is based on the work of Kubr and Prokopenko (1989: 21) and serves as ‘neutral’ basis to describe a managerial position. However, similarities can be found later in the works of McDonald et al (2000: 220) or Wilson and Speare (2002: 123). The framework consists of the following components:

Knowledge: This component describes retained information concerning facts, concepts and relationships; for example about the business environment, industry sector, products/services, organization, concepts, methods and so forth.

Personal attributes: One part of this component are typical thought patterns and resultant behavior characteristics of a person in a variety of situations, such as flexibility, initiative, adaptability, self-confidence, tolerance, perseverance, patience and so forth. Attributes such as gender, age or nationality are also subsumed under this term.

Skills: This component encompasses abilities to do things and to effectively apply knowledge.

Experience: Experience is defined by nature, level and length, and normally increases the level of a competence. In particular for GAM, socialization as part of experience shapes crucial competencies such as for example intercultural skills.

Attitudes: This component subsumes feelings or statements for or against certain issues; for example how the job, the people involved and the work environment are perceived. Moreover, attitudes reflect values that a person holds. Attitudes are often irrational and emotionally rooted, molded by the person’s total life experience and socialization through school or the ethnical/cultural background. Attitudes are not evaluated in the survey presented in Section 3 simply because they are considered to be an indispensable prerequisite for the GAM job. Thus, attitudes are for example a crucial element when discussing the selection of candidates in Section 4.3 in order to prevent misconceptions or expectations about the future job as GA manager. Figure 2 proposes a model of how specific competencies of a GA manager can be clustered:

Figure 2: Components of a GA Manager Competency Model

illustration not visible in this excerpt

Source: own illustration

The next step now is to derive the particular competencies of a GA manager. This is by far not an easy task since many different concepts exist in theory and practice. The following paragraphs will build on general competencies proposed for (senior) managerial jobs, on competency sets developed for KAM and finally account for the distinctive differences that constitute GAM.

Hilb (1999: 71) proposes four areas of competencies: personality-, leadership-, social- and professional (subject) competencies. These areas of competences are further subdivided in competencies ranging from stress persistence, integrity, subject knowledge, sales talent, leadership and problem solving to interaction capability and so forth. A crucial competency is called ‘helicopter capability’, a term that describes on the one hand the capability to simultaneously consider clients, employees or co-workers, owners or the environment/society (Hilb, 1999: 142), and on the other, to effectively manage a large number of different and often conflicting objectives, projects or activities at the same time.

KAM literature is full of concepts regarding key account manager competencies. In the following, a brief excerpt:

Berchtold (1995: 56) describes the requirements of a key account manager and points toward the boundary role ‘advocate for own company’ and ‘advocate for the client’. Senn (1996: 178) evaluates in his survey a list of competencies to obtain an ‘ideal’ profile of a key account manager. The scope of competences is further described in Belz (1999: 162). Rock (1998: 248) delineates competencies of a key account manager necessary to outperform; these competencies are among others: having a good grasp of finance, being able to conduct at any level in both organizations, being a problem solver and a good listener. McDonald et al (2000: 222) present a portfolio of essential attributes of a key account manager. Burnett (2001: 22) proposes abilities that range from leading multidisciplinary teams, negotiating effectively, orchestrating supplier-customer contacts across different levels to counseling. Capon (2001: 107) discusses a set of skills including business management skills, boundary spanning and relationship building skills, leadership and team-building skills.

GAM literature concerning competencies of GA managers is emerging. For example, Millman and Wilson (1999: 6) present GA manager competencies to make globalization work, ranging from possessing a global mindset, having a long-term relationship orientation, effectively leading multicultural teams to managing complexity and so forth. Further evaluation by Wilson et al (2001: 168) brought out the following top ten GA manager competencies (in descending order of importance): communication skills, global team leadership and management skills, business and financial acumen, relationship management skills, strategic vision and planning capabilities, problem solving capabilities, cultural empathy, selling skills, industry and market knowledge, and product/service knowledge. Zupancic and Senn (2000: 39), based on an international account management survey in cooperation with NAMA (later SAMA), Warwick Business School, University of St. Gallen and The Sales Research Trust, identified the following competencies: interpersonal skills, appropriate knowledge, linguistic skills, global account experience, commercial and strategic capability, team work, managerial capabilities, knowledge about different national cultures, diplomacy, flexibility, loyalty/trustworthiness, educational qualifications and analytical skills.

The following more detailed competency model is based on these findings. In particular, Senn’s (1996: 178) criteria list for KAM was used as basis for later comparison when conducting the GAM survey which is presented in Section 3. The more detailed clustering is derived from McDonald et al (2000: 222) and Wilson and Speare (2002: 123). To account for the distinctive differences of GAM discussed earlier on, the following competencies had to be included: integrity and ethical conduct, interdisciplinary working capability, quantitative capabilities, IT knowledge, extended products/services knowledge, and powers of persuasion.

Personal attributes: nationally (like the account), gender, age, recruited from within the organization, ability to cope with physical and psychological strain, sales talent, personality and appearance, integrity and ethical conduct.

Skills: thinking skills: creative talent, command of conceptual and strategic thinking, analytical capabilities and ability to think and work interdisciplinary. Administration or project skills: autonomous working, cooperative managerial style and team player. People skills: communication skills and powers of persuasion.

Knowledge: products/services knowledge, command of several foreign languages, quantitative sciences knowledge, IT application knowledge and a university degree.

Experience: direct leadership experience, experience in respective industrial sector and experience abroad.

This competency model serves as basis for the survey which is conducted as part of this research and aims at profiling the GA manager in practice (see Section 3). However, two important annotations have to be made: firstly, the model might appear to be the ‘ideal’ framework for a GA manager and managers could be tempted to directly apply it to managerial situations such as recruiting. For doing so, the model has to be put in a specific context (e.g. account relationship stage) in order to determine the exact situational competences and the intensity of latter ones (Lockau, 2000: 298). Secondly, Cockerill et al (1995) point out in their article that although the discussion about competencies is extensive, hardly ever are the proposed competencies linked to performance or substantiated by science. In many cases, job analyses simply identify behaviors used by managers regardless of the relationship between these behaviors and job performance (Cockerill et al, 1995: 2). Since this project is of explorative nature, the presented competency model can be used to identify clusters and their importance in practice, and to highlight differences between managers for KAM or GAM. Section 0 discusses in more detail the aspect of competences and their contributions to performance.

2.7 Different Roles – A Conceptual Framework

After delineating the GAM environment, the challenges faced by GA managers and competencies required to perform, this section focuses on the role of the GA manager. Firstly, the importance of a role concept is stipulated, secondly, the different descriptions found in literature are presented and, finally, a conceptual framework of role determinants is proposed.

As defined earlier on, the role is the occupational position held by the GA manger. Situational context challenges and the corresponding competency model circumscribe the particular role of a GA manager at a certain point in time. Since the GA manager is performing in a very complex and dynamic environment, a role can be pleasant way to grasp the bigger picture, to help the GA manger better understand his fit in the overall concept of GAM, and to align expectations among team members. Furthermore, the role description can for example be used as basis for evaluation if the job-holder is overloaded with tasks or to what extent the company relies on him.

When searching for role descriptions and profiles in the account management or global management literature, one can find many manifestations. In the following a brief excerpt:

Bartlett and Ghoshal (1992) discuss in their article three roles of a global manager, namely the business manager (strategist + architect + coordinator), the country manager (sensor + builder + contributor) and the functional manager (scanner + cross-polinator + champion). Senn and Belz (1994: 45) describe three different roles of a key account manager depending on the industry sector: consumer goods companies focus on sales skills (role of the ‘creative sales executive’) while service companies focus on analytical skills (role of the ‘astute analyst’) and industrial goods companies focus on coordination skills (role of the ‘circumspect coordinator’). Napolitano (1997b: 109) describes several roles for the key account manager, among others: problem solver, strategist, relationship builder and missionary. Lockau and Barth (1998: 83) describe in their article necessary skills of a GA manager and the responding role as person responsible for turnover, relationship manager, account planner and account team leader. McDonald et al (2000: 211) describe a key account manager as a standard bearer, information manager, value creator and so forth. Lum and Ayers (2000: 26) suggest rethinking the role of the strategic account manager and perceiving him as ambassador, mediator, consultant, air traffic controller or shareholder for both companies. Capon (2001: 106) states that a key account manager has to carry out not only several responsibilities but also roles. Finally, Wilson and Speare (2002: 127) describe GA manager roles such as coordinator and entrepreneurial strategist for GAM and elaborate in particular on the role of the political entrepreneur.

As the literature review shows, the scope of role descriptions is very broad. McDonald and Holt (2000) also remark that ‘…where the roles [of a GA manager] are discussed, they tend to be presented using broad general terms that do little to increase our understanding of what these people actually do.’ Figure 3 tries to capture some of the spectrum and align it along a continuum of time.

Figure 3: GA Manager Role Continuum

illustration not visible in this excerpt

Source: own illustration

The list of roles depicted in Figure 3 could easily be amended by many other terms; also by negative ones (e.g. ‘sideline manager’). As comfortable it may be to have a generic definition for the GA manager role, it becomes obvious when looking at the broad spectrum that this is rather an illusion (see Bradford and Minshull, 2001: 10). Possible clusters of roles range from e.g. ‘communication’ to ‘administration’ and ‘development’. Pigeonholing the GA manager could even be dangerous and might lead to wrong interpretations and perceptions, and a lack of focus (e.g. HR managers developing training programs for a ‘missionary’ instead of a ‘value creator’). The GA manger is performing in a very complex (organizational and cultural) context, thus facing manifold different challenges and tasks at the same time. Consequently, there is not the specific role – though one role can be predominant – but instead several roles at a certain point in time. For example, the GA manager might appear towards the client in a relationship manager role but at the same time have an important role as coach to develop the capabilities of his account team.

Figure 3 not only shows possible clusters of roles, but also a certain direction of the predominant role. Ghoshal and Bartlett (1994) describe the changing role of top management what also appears to be appropriate for the GA manager: focusing on people business instead of systems or processes, obtaining information through personal relationships, building mutual trust, ensuring decision influence, and emphasizing change agents.

[...]

Excerpt out of 132 pages

Details

Title
The Evolving Role of the Global Account Manager in Theory and Practice
College
University of St. Gallen
Grade
5,5 (Schweiz) = 1,5 (Deutschlan
Author
Year
2002
Pages
132
Catalog Number
V69658
ISBN (eBook)
9783638607490
File size
1240 KB
Language
English
Tags
Evolving, Role, Global, Account, Manager, Theory, Practice
Quote paper
Axel Thoma (Author), 2002, The Evolving Role of the Global Account Manager in Theory and Practice, Munich, GRIN Verlag, https://www.grin.com/document/69658

Comments

  • No comments yet.
Read the ebook
Title: The Evolving Role of the Global Account Manager in Theory and Practice


Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free