Abstract

The existing literature on sales teams explores various aspects of team members and their effects on sales performance. The literature on sales management has described how managers can promote better results from salespeople. The question at the intersection of these two streams of literature – if managers should be part of sales teams — has not been addressed and is what we explore. Using data from a Fortune 1,000 firm that operates automotive service stores across the US we test these effects. The data presents a natural experiment as sales teams with different compositions are assigned randomly to the customers. We identify different configurations where either the team is comprised only of salespeople or managers and salespeople. Based on insights from game theory and agency theory, given there are more opportunities to free-ride in salespeople-only teams, more shirking is expected in these teams, yielding less effort by all team members, an outcome that would, in turn, result in lower sales. Our results show that the presence of managers would reduce the shirking and increase sales.