Coordinating multi-business sales through management simulators

Abstract

Multi-business corporations are used to face complex decision making problems. Among these, one of the most complex one is that of managing their Sales Force so as to balance and exploit their multi-business portfolio. The case outlined in this paper explores the Cross- Selling approach to Sales management; this approach aims at aligning, controlling and enhancing the Sales performances of a multi-business company. Such a complex environment offered an interesting playground to see whether the System Dynamics methodology could help the managerial decision making process. The paper therefore pinpoints a simulation work carried out at Siemens Turkey which includes the analysis and simulations of the current Sales structure and the re-design of the Sales management policy. The developed simulation model claims to be the most detailed market growth model in Siemens. In February 2005, the model was turned into a management game which has been played by 22 managers to enhance organisational learning. Some months later, in October 2005, it has been presented as a benchmark application at the company headquarters (Germany), to show that the company was suffering from its own order processing mechanism, which was acting as an aging-chain, and that the Cross-Selling policy would outperform the current method in terms of larger sales figure and less severe oscillations. The paper presents both these research and learning experiences, and discusses executive business recommendations (to reduce the delays in the order structure, to modify the salesmen bonus schemes for Cross-Selling and the frequency of Siemens ONE Training programme) as well as it proposes further suggestions for model development and implementation