Organizing key account management in a global supplier company
KORHONEN, ELINA (2008)
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KORHONEN, ELINA
2008
Yrityksen taloustiede, markkinointi - Marketing
Kauppa- ja hallintotieteiden tiedekunta - Faculty of Economics and Administration
Hyväksymispäivämäärä
2008-06-05Tiivistelmä
Traditional, product-driven capital goods suppliers have gradually grown in size and become more global. Simultaneously key account management has become the dominant approach for them to manage their business customers. The purpose of the study is to describe and analyse, how key account management is organized in global supplier companies which operate in capital goods market. Key account management is seen as a strategic approach, the aim of which is to add value to the supplier–customer relationship. The organizational considerations are regarded as a part of the process of implementing key account management into the company.
When developing from product-driven approach to customer-driven approach, a company usually goes through several phases. Adoption of customer-driven approach brings about changes to the organizational structure as well as to the roles within the organization. When a company plans for the location of people in charge of the key account management, it needs to analyse its own organization, the business environment and the key accounts. Decentralized, centralized and compromised organizational structure models are considered as principal options, each of which have different characteristics regarding adaptation to customers, power positions and communication.
Qualitative approach and multiple case study method are used in this study, since a comprehensive understanding of the case companies is sought. Altogether three global supplier companies are analysed on the basis of information obtained through interviews of seven managers with several years of experience from key account management. Theme interview being close to natural conversations is used for the interviews. Cross-case comparison is chosen as the analysis approach to identify the similarities and differences in the case companies.
The results give evidence to the companies’ evolution from product-driven to customer-driven organization. Furthermore, the supplier’s offering, the roles of the key account managers, industry-related and country-based differences as well as an in-depth view of the accounts and their decision-making structures are emphasized when plans for key account management are made. The centralized structure is preferred because of its clear role within the organization, while the decentralized structure is described as difficult to manage. Suppliers seek adaptation to customers by using a multilevel approach with customized account teams in managing the key account relationships. Finally, systematic management and clear definition of roles help companies minimize the issues concerning power positions and communication.
Key words: Key account management, business-to-business, customer-driven organization, organizational structure
When developing from product-driven approach to customer-driven approach, a company usually goes through several phases. Adoption of customer-driven approach brings about changes to the organizational structure as well as to the roles within the organization. When a company plans for the location of people in charge of the key account management, it needs to analyse its own organization, the business environment and the key accounts. Decentralized, centralized and compromised organizational structure models are considered as principal options, each of which have different characteristics regarding adaptation to customers, power positions and communication.
Qualitative approach and multiple case study method are used in this study, since a comprehensive understanding of the case companies is sought. Altogether three global supplier companies are analysed on the basis of information obtained through interviews of seven managers with several years of experience from key account management. Theme interview being close to natural conversations is used for the interviews. Cross-case comparison is chosen as the analysis approach to identify the similarities and differences in the case companies.
The results give evidence to the companies’ evolution from product-driven to customer-driven organization. Furthermore, the supplier’s offering, the roles of the key account managers, industry-related and country-based differences as well as an in-depth view of the accounts and their decision-making structures are emphasized when plans for key account management are made. The centralized structure is preferred because of its clear role within the organization, while the decentralized structure is described as difficult to manage. Suppliers seek adaptation to customers by using a multilevel approach with customized account teams in managing the key account relationships. Finally, systematic management and clear definition of roles help companies minimize the issues concerning power positions and communication.
Key words: Key account management, business-to-business, customer-driven organization, organizational structure