Selling and sales management is a new discipline and its importance is growing since companies are becoming more and more marketing oriented. The problem of modern business is not how to produce but how to sell the product. It means that there is no successful personal sale without effective sales management because more and more products need to be brought closer to the customer in the selling process. In this paper I will focus on one aspect of selling and sales management, sales organization and functionality. There are two methods of sales organization and functionality, empirical method and scientific method. The purpose of my research was to find out if the sales organization and functionality in Bosnia and Herzegovina companies was in accordance with the scientific method or empirical method. Despite the fact that the sources on selling and sales management are mostly focused on B2C (business to customer) market, my research was focused on B2B (business to business) market companies in order to find out if the theoretical aspects on sale and sales management on B2C market are applicable on B2B market. The objects of my research are five leading companies on Bosnian and Herzegovina industrial market.sales management, sales organization, marketing orientation, scientific method, empirical method.

Kenan SPAHO

English

Research Papers in Economics

 
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
MANAGEMENT RESEARCH AND PRACTICE Vol. 2  Issue 4 (2010) pp: 409-420 
 
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SALES ORGANIZATION AND FUNCTIONALITY IN 
COMPANIES ON THE INDUSTRIAL MARKET IN 
BOSNIA AND HERZEGOVINA 
 
Kenan SPAHO 
International Forum Bosna, Sime Milutinovića 10, Sarajevo, Bosnia Herzegovina 
kspaho@utic.net.ba   
 
 
Abstract  
 
Selling and sales management is a new discipline and its importance is growing since companies are becoming more 
and more marketing oriented. The problem of modern business is not how to produce but how to sell the product. It 
means that there is no successful personal sale without effective sales management because more and more products 
need to be brought closer to the customer in the selling process. In this paper I will focus on one aspect of selling and 
sales management, sales organization and functionality. There are two methods of sales organization and functionality, 
empirical method and scientific method. The purpose of my research was to find out if the sales organization and 
functionality in Bosnia and Herzegovina companies was in accordance with the scientific method or empirical method. 
Despite the fact that the sources on selling and sales management are mostly focused on B2C (business to customer) 
market, my research was focused on B2B (business to business) market companies in order to find out if the theoretical 
aspects on sale and sales management on B2C market are applicable on B2B market. The objects of my research are 
five leading companies on Bosnian and Herzegovina industrial market. 
Keywords: sales management, sales organization, marketing orientation, scientific method, empirical method 
 
 
1.  INTRODUCTION 
Selling and sales management is a new discipline. Its importance is growing since companies are becoming 
more and more marketing oriented. A personal sale is the final act of the marketing process by the act of 
selling the product. The problem of modern business is not how to produce but how to sell the product. It 
means  that  there  is  no  successful  personal  sale  without  adequate  sales  management.  Effective  sales 
management has a key role in the success of a company, because more and more products need to be 
brought closer to the customer in the selling process. 
In this paper I will focus on one aspect of sellng and sales management, sales organization and functionality. 
The  purpose  of  my  research  was  to  find  out  if  the  sales  organization  and  functionality  in  Bosnia  and 
Herzegovina companies was in accordance with the scientific method. Despite the fact that the sources on 
selling and sales management are mostly focused on B2C (business to customer) market, my research was 
focused on B2B (business to business) market companies in order to find out if the theoretical aspects on 
sale and sales management on B2C market are applicable on B2B market.    
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
MANAGEMENT RESEARCH AND PRACTICE Vol. 2  Issue 4 (2010) pp: 409-420 
 
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2. SALES ORGANIZATION AND FUNCTION ON THE INDUSTRIAL MARKET – THEORETICAL 
ASPECT. 
Selling is an act of product and service realization which enables return of investments, making profit, benefit 
as well as maintaining and improving of an operating business (Kukić et al, 2007).  As a category it has two 
dimensions: as economical category and as law category (Tihi et al, 1996). The economical category is more 
important, and in that context, selling is a goods for money trade process, a business function in company as 
well as sales department in company (Tihi et al, 1996). In this paper I will treat selling as function in company 
and as sales department. In marketing oriented companies sales function is a part of marketing function as it 
is illustrated in Figure 1.  
As a part of marketing function, selling has three tasks (Grabovac, 2005): 
  Direct communication with customer in order to meet their wishes and needs. 
  Realization of product and service, which means finding potential customer to sell the product to. 
  Earning money in order to cover the costs and make profit.  
 
FIG.1   SELLING AS A PART OF MARKETING 
Source: Adapted from Tihi et al, 1996 
 
As a part of general management, sales management has a task to organize and realize sales successfully. 
In the marketing concept, sales management has the same functions as general management but those 
functions  are  focused  on  sales  function  (Grabovac,  2005).  Sales  organization,  as  part  of  sales 
management, must be set up in a manner to enable efficient realization of the sales plan (Grabovac, 2005). 
There are two methods of sales organization (Grabovac, 2005): 
  Empirical method 
  Scientific method  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
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The empirical method is based on using your own or other people’s experience in sales organization. This 
method is not complete but it is often used.  
The scientific method is based on using science achievements in sales organization. There are several 
scientific methods of sales organization but all are based on analytical method. It assumes starting from 
complete organization which will be divided in business functions. One of the functions is the sales function, 
which is divided in sub functions and vacancies.  
There are several sales organization models: 
  Organization by product 
  Organization by territory  
  Organization by market 
  Developed model 
  Team organization 
  Combined model 
Organization  by  product  is  the  model  where  sales  function  is  divided  in  accordance  with  the  type  of 
products or by product line. It means that in one group there are products which are the same or similar. This 
model is presented in Figure 2. 
Organization by territory is based on dividing sales function by territory where company sells its products 
as it is presented in Figure 3.  
 
FIG. 2   SALES ORGANIZATION BY PRODUCT 
Source: Adapted from Grabovac, 2005 
 
 
FIG. 3   SALES ORGANIZATION BY TERRITORY 
Source: Adapted from Grabovac, 2005 
  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
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Organization by market is based on sales organization by market segments. Market segments can be 
manufacturers, wholesalers, retailers, big consumers, small shops etc. as it is presented in Figure 4. 
Team organization assumes organizing sales team for individual customer or customer group (Lovreta et al, 
2001). This model, also known in organization theory as matrix model is presented in Figure 5.  
Developed model of sales organization is a model where there is no sale function as department but the 
sales  function  is  organized  (developed)  through  several  departments.  One  example  of  this  model  is 
presented in Figure 6. 
 
FIG. 4   SALES ORGANIZATION BY MARKET 
Source: Adapted from Grabovac, 2005 
 
 
FIG. 5   SALES ORGANIZATION BY TEAM 
Source: Adapted from Lovreta et al, 2001 
 
 
FIG. 6   DEVELOPED MODEL OF SALES FUNCTION 
Source: Adapted from Sikavica, 1991  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
MANAGEMENT RESEARCH AND PRACTICE Vol. 2  Issue 4 (2010) pp: 409-420 
 
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Combined model is a combination of the above mentioned models. In this paper I will present two combined 
models such as in Figures 7 and 8. 
 
FIG. 7   COMBINATION OF TERRITORY AND PRODUCT MODEL 
SOURCE: ADAPTED FROM GRABOVAC, 2005 
 
 
FIG. 8   COMBINATION OF MARKET AND PRODUCT MODEL 
SOURCE: ADAPTED FROM GRABOVAC, 2005 
 
Buying process on B2B market is a very complex process. It results in the fact that selling on a B2B market is 
also  a  complex  process,  which  presents  the  engagement  of  the  complete  selling  team,  not  only  one 
salesman (Jobber and Lankaster, 2006). This is very important moment for my research as it will be seen in 
the following text.  
3. METHODOLOGY  
This paper is based on case study method and objects of my research were five industrial companies from 
Bosnia and Herzegovina: Energoinvest dd Sarajevo, Energoinvest TDS, Energoinvest SUE, Energoinvest 
RAOP and TEO Blažuj. Beside case study method I used comparative method to compare theoretical sales 
organization model with models used in these companies. The purpose of this paper was to show in practice  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
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that selling on B2B market is a complex project and that sales organization and functionality is in accordance 
with science method. 
4. RESEARCH RESULTS  
4.1. Energoinvest dd Sarajevo 
Energoinvest dd Sarajevo is one of the most successful and well–respected engineering companies with 
dominant export orientation with scope of activities in the fields of design and realization of complex objects in 
the country and abroad. The production is based on manufacturing by order. The organization structure of the 
company is presented in Figure 9. Engineering sectors are profit centers in the company which means that 
sales function is concentrated in these sectors. Bureau for Marketing gives commercial support to these 
sectors through Commercial Affairs Services in the way of identification potential jobs in the country and 
abroad. Engineering sectors are organized in the same way and divided into four departments: Bidding 
department,  Project  implementation  department,  Design  department,  Project  implementation 
commercial support department. Sales function is developed in all these departments and organized on 
base of team/matrix model as it is shown in Figure 10. 
 
FIG. 9   ORGANIZATION STRUCTURE OF ENERGOINVEST DD SARAJEVO 
 
After this analysis the following conclusions can be made: 
  Sales function is organized as a combination of developed model and matrix model 
  Sales function and marketing function work in coordination  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
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FIG. 10   SALES ORGANIZATION IN ENERGOINVEST DD SARAJEVO 
 
4.2. Energoinvest RAOP 
Energoinvest RAOP is a leading factory in manufacturing equipment for transmission and distribution of 
electric energy. It offers wide range of serial products such as circuit breakers, switchgears and instrument 
transformers. Organization structure is presented in Figure 11. 
 
FIG. 11   ORGANIZATION STRUCTURE OF ENERGOINVEST RAOP 
In Energoinvest RAOP, selling is a complex project based on manufacturing by order. Sales function is 
developed in the following sectors: Sector Marketing & Sale (Engineering), Sector Development, Sector 
Finance (Purchasing), Sector Production (depending on product type), Sector Quality (Final Control) and 
Sector Marketing & Sale (Realization) as it is presented in Figure 12.   
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
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FIG. 12   SALES ORGANIZATION IN ENERGOINVEST RAOP 
 
After analysis the following conclusions can be made: 
  Sales function is organized as a combination of the developed and matrix model 
  Marketing function and sales function work together.  
4.3. Energoinvest TDS 
Energoinvest  TDS  is  the  leading  factory  in  manufacturing  equipment  such  as  transmission  line  towers, 
telecommunication towers, pole substation and supporting structures. Organization structure is presented in 
Figure 13.  In Energoinvest TDS, selling is a complex project based on manufacturing by order. Sales 
function  is  developed  in  the  following  sectors:  Development  division,  Sales  division,  Product  division, 
Purchasing division and Quality control division as it is presented in Figure 14.   
 
FIG. 13   ORGANIZATION STRUCTURE OF ENERGOINVEST TDS 
  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
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FIG. 14   SALES ORGANIZATION IN ENERGOINVEST TDS 
 
After analysis following conclusions can be made: 
  Sales function is organized as a combination of developed and matrix model 
  There is no marketing function.  
4.4. Energoinvest SUE 
Energoinvest SUE is a leading factory in engineering, design and production. The company’s program is 
wide, including aggregates, UPS systems, converters and batteries. Organization structure is presented in 
Figure 15. In Energoinvest SUE selling is a complex project based on manufacturing by order. Sales function 
is developed in the following: Purchasing department, Production department, Design department, Bidding 
department, Realization department as it is presented in Figure 16.  
 
FIG. 15   ORGANIZATION STRUCTURE OF ENERGOINVEST SUE  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
MANAGEMENT RESEARCH AND PRACTICE Vol. 2  Issue 4 (2010) pp: 409-420 
 
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FIG 16   SALES ORGANIZATION IN ENERGOINVEST SUE 
After analysis the following conclusions can be made: 
  Sales function is organized as a combination of the developed and matrix model 
  Marketing function and sales function work in coordination.  
4.5. TEO Sarajevo 
TEO Sarajevo is a company with long tradition in manufacturing low voltage switchboards. The products are 
applicable in industry of distribution of electrical energy. The most important clients are telecom operators 
and energetic operators. The organization structure is presented in Figure 17.  In TEO Sarajevo, selling is a 
complex project based on manufacturing by order. Sales function is developed in the following departments: 
 
FIG. 17   ORGANIZATION STRUCTURE OF TEO SARAJEVO  
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
MANAGEMENT RESEARCH AND PRACTICE Vol. 2  Issue 4 (2010) pp: 409-420 
 
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FIG. 18   SALES ORGANIZATION IN TEO SARAJEVO 
After analysis, the following conclusions can be made: 
  Sales function is organized as a combination of the developed and matrix model 
  Marketing function and sales function work together.  
6. CONCLUSIONS 
The  purpose  of  this  paper  was  to  find  out  if  the  sales  organization  and  functionality  in  Bosnia  and 
Herzegovina industrial companies is based on the scientific or empirical method. For that purpose I have 
done some research in five temporarily leading companies on the BiH industrial market. As it can be seen 
from my research, in industrial companies selling is not just an exchange process or business function, but a 
complex project mostly based on manufacturing by order. The reason for this is that products in industrial 
companies are complex, from serial products to complex systems based on system engineering. I have also 
presented that industrial products are with variable technical characteristics despite the fact if it is same type 
of product. And finally selling is a closed process which starts with customer inquiry and ends with the final 
realization of product.  
In the end, we can conclude that in accordance with our research, the sales organization in Bosnia and 
Herzegovina industrial companies is based on the scientific method as a combination of the developed 
organization model and matrix model. On the other hand, sales and marketing function works together or in 
coordination except in one company which means that sales functionality is in accordance with the scientific 
method in four companies but not in one.  
Finally,  it  can  be  concluded  that  my  hypothesis  is  partly  confirmed  and  that  sales  organization  and 
functionality in Bosnia and Herzegovina industrial companies is mostly  in accordance with the scientific 
method.   
 
 
 
 
 
Spaho K. 
SALES ORGANISATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND 
HERZEGOVINA 
MANAGEMENT RESEARCH AND PRACTICE Vol. 2  Issue 4 (2010) pp: 409-420 
 
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and Soče Kraljević, S. (2007). Marketing, Sveučilište u Mostaru, Ekonomski Fakultet Mostar.  
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SALES ORGANIZATION AND FUNCTIONALITY IN COMPANIES ON THE INDUSTRIAL MARKET IN BOSNIA AND HERZEGOVINA

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