The transaction cost theory as it applies to sales incentives tells the following:

|Assumption|Market control mechanisms are more efficient than bureaucratic ones|
|Favours|Outsourced sales force|
|Problem|Markets can fail and therefore must be looked into (see below)|
|Solution|If any of the problems exist, insource the sales force|

Problems:
* ''Asset specificity''
** Capabilities need to sell the product and that cannot easily be used for other products and services
* ''Safeguard problem''
** Sales people can take advantage of the specific knowledge they receive as resellers
* ''Transaction frequency''
** High transaction volumes are more cost efficient in an hierarchical organisation.
bag
sales_public
created
Sat, 10 Dec 2011 12:58:37 GMT
creator
dirkjan
modified
Sat, 10 Dec 2011 12:58:37 GMT
modifier
dirkjan
tags
M20
Term
creator
dirkjan