Environmental factors influencing the management of key accounts in an Arab Middle Eastern context

Industrial Marketing Management xxx (2014) xxx–xxx

IMM-06983; No of Pages 11

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Industrial Marketing Management

Environmental factors influencing the management of key accounts in an Arab MiddleEastern context

Fawaz Baddar ALHussan a,⁎, Faten Baddar AL-Husan b,1, Chavi C.-Y. Fletcher-Chen a,2

a Université Catholique de Lille, IESEG School of Management (LEM UMR CNRS 8179), 3 Rue de la Digue, Lille 59000, Franceb University of Bedfordshire, Putteridge Bury, Hitchen Road, Luton LU2 8LE, United Kingdom

⁎ Corresponding author. Tel.: +33 320 54 58 92; fax: +E-mail addresses: [email protected] (F.B. ALHussan), sa

(F.B. AL-Husan), [email protected] (C.C.-Y. Fletcher-Chen).1 Tel.: +44 158 24 83 941.2 Tel.: +33 320 54 58 92; fax: +33 320 57 48 55.

0019-8501/$ – see front matter © 2014 Elsevier Inc. All rihttp://dx.doi.org/10.1016/j.indmarman.2014.02.008

Please cite this article as: ALHussan, F.B., etcontext, Industrial Marketing Management (2

a b s t r a c t
a r t i c l e i n f o
Article history:Received 7 March 2013Received in revised form 1 December 2013Accepted 11 December 2013Available online xxxx

Keywords:Key account managementRelationship managementEmerging economiesContingency theoryNetwork approach

Within the sales andmarketing literature, it is recognised that a range of external factors can influence how com-panies in the business-to-business field manage business relationships within national and across internationalborders. However, there have been very few studies that explore the influence of the external environment onkey account relationships, especiallywithin the context of emerging economies. This study draws on the networkapproach and contingency theory to identify and highlight the influence of external environmental factors on themanagement of inter-organisational relationshipswith key customers in emerging economies in the ArabMiddleEast region. It is based on an extensive qualitative enquiry that utilises 50 in-depth semi-structured interviewsconducted in Jordan with endogenous and Western firms. It concludes that key account practices within anArab context are shaped by a number of contingencies that are embedded in broader institutional contextsand the business environment, which may challenge the adoption of company-wide universal key accountmanagement policies across borders.

© 2014 Elsevier Inc. All rights reserved.

1. Introduction

Since the mid-1980s, customer relationship management has beensignificantly affected by a number of significant changes in the businessenvironment. Intensified levels of competition in most markets andsubsequent selling costs for suppliers; growing customer concentrationarising from increased mergers and acquisitions; increased centralisedpurchasing; customer demands for more services and better communi-cation; the increased desire to develop partnerships; wide geographicdispersion of buyers for the same company; increased sophisticationof buyers; maturity of business markets in most developed countries;improvements in information and communication technologies; andthe adoption of active strategies by large buyers to reduce the supplierbase to cut costs have forced companies to adopt and develop key ac-count management strategies to increase their competitive advantage(Davies & Ryals, 2009; Ivens & Pardo, 2007; McDonald, Millman, &Rogers, 1997; Ozegovic & Sarac, 2012; Sharma, 2006; Tzempelikos &Gounaris, 2013; Weilbaker & Weeks, 1997).

Consequently, Key Account Management (KAM) has become astrategic and popular process of selling, in business-to-businessmarket-ing that has gained increased importance for suppliers worldwide(Gosselin & Bauwen, 2006; Guenzi, Johnson, & Castaldo, 2009; Guenzi,

33 320 57 48 [email protected]

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al., Environmental factors infl014), http://dx.doi.org/10.101

Pardo, & Georges, 2007; Homburg, Workman, & Jensen, 2002; Pardo,Henneberg, Mouzas, & Naudé, 2006; Salojarvi, Sainio, & Tarkiainen,2010; Sharma, 2006; Wengler, Ehret, & Saab, 2006; Wong, 1998;Wotruba & Castleberry, 1993; Zupancic, 2008). More specifically, KAMcan be understood as a relationship-oriented marketing managementapproach which focuses on dealing with major customers in thebusiness-to-business market (Ojasalo, 2001). KAM can also be thoughtof as a strategy to retain and develop closer relationshipswith the firm'smost valued and important customers (Davies & Ryals, 2009; Georges &Eggert, 2003; Gosselin & Heene, 2000; Natti & Palo, 2011). Key accountsor key customers are themost important customers for supplier organi-sations, and are usually given special consideration. McDonald et al.(1995, p. 9) define a key account as ‘…a customer deemed to be of stra-tegic importance by the selling company’.

The literature indicates that the nature of KAM and the formation ofkey account programmes are not only influenced by a number of inter-nal/organisational factors, but also by external/environmental factors(Homburg et al., 2002). The external environment may be referred toas the forces that are beyond the selling firms' capacity to control, andwhich influence the formation of the key account programme and strat-egies (Jones, Dixon, Chonko, & Cannon, 2005). These include competi-tors and the market environment such as characteristics of customers,demand concentration, purchasing centralisation and purchasing com-plexity, the nature of the product and product complexity, technologi-cal, ethical and regulatory forces (Brehmer & Rehme, 2009; Wengleret al., 2006; Workman, Homburg, & Jensen, 2003). However, relativelylittle attention has been paid to the influence of these environmental/exogenous factors on KAM dimensions and relationships (Fletcher &

uencing the management of key accounts in an Arab Middle Eastern6/j.indmarman.2014.02.008

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2 F.B. ALHussan et al. / Industrial Marketing Management xxx (2014) xxx–xxx

Fang, 2006; Homburg et al., 2002). Furthermore, there is relatively littleresearch on KAM in emerging and developing economies (LDCs) and, inparticular in the Middle East region and the Arab World, as opposed tothe developed economies (Al-Husan & Brennan, 2009). These gaps inthe literature are problematic, for it is clear that multinational corpora-tions (MNCs) are increasingly expanding their operations in emergingand developing countries (UN, 1993, 1997). Secondly, the region isstrategically important, given its central geographic location, marketsize and large oil reserves (Budhwar & Mellahi, 2007). The aim of thispaper is to fill these gaps by exploring the environmental contingenciesthat influence the design and implementation of KAM in an Arabcontext.

This paper is divided into five main sections. In the first section, abrief review is provided on the debate concerning key accountmanage-ment. The second goes on to consider how KAM relationships arecontingent upon the embeddedness of firms within the broaderenvironment and institutional context. The third section outlines theresearch methods utilised. The fourth section reports the key findingsobtained from the interviews. Finally, a concluding section drawstogether the key points emerging from the study and considers theirimplications for the existing debate relating to the management of keyaccounts.

2. Theoretical background

2.1. Key account management

Key account management (KAM) has its roots in relationshipmarketing (RM), and is perceived as the newest paradigm in customerrelationship management approaches (Davies & Ryals, 2009; Durif,Benedicte, & Graf, 2013; Gounaris & Tzempelikos, 2013a; Hughes,Foss, Stone, & Cheverton, 2004; McDonald et al., 1997; Ozegovic &Sarac, 2012; Wahyuni & Titus, 2013; Wengler, 2006, 2007).

KAM is also conceptualised as the practical implementation of RM(Godson, 2009; Gosselin & Bauwen, 2006; Gounaris & Tzempelikos,2013b; Gummesson, 2012; Harwood, Garry, & Broderick, 2008; Sheth& Shah, 2003; Tzempelikos & Gounaris, 2013). More specifically, KAMis based on the relationship marketing theory in terms of how tomanage key customers and how to develop andmaintain strategic rela-tionships with the customers and channel partners, while integratingwith other internal functions of the organisation like service, logisticsand information management (Gupta & Melevar, 2002). Thus, KAMand relationship marketing emphasises long-term ongoing relation-ships (Kim, Han, & Lee, 2001; Little & Marandi, 2003), that aim tobuild long-term, committed, trusting and co-operative relationships,which are defined by openness, genuineness, customer suggestions,fair dealing, and a willingness to sacrifice short-term profit for long-term profits and advantages (Benette, 1996).

KAM, as currently portrayed in the relationshipmarketing literature,is a significant approach to creating value, by implementing specificprocesses targeting most important customers (Wengler et al., 2006).Since the provision of special treatment and specific processes to themost important customers are beyond the capabilities of any one indi-vidual and require a coordinated effort across product divisions, salesregions and functional groups at different levels, organisations haveresorted to the adoption of KAM approaches (Workman et al., 2003).Hence, KAM is often represented as managing both internal and exter-nal networks (Holt & McDonald, 2000; Pardo, 1994).

Accordingly, it is argued that among the three relationship market-ing schools of thought which can provide a useful framework foranalysing KAM, namely: The Nordic School of Relationship Marketing,The Anglo-Australian School of Relationship Marketing, and The Indus-trial Marketing and Purchasing (IMP) Group (Baines, Fill, & Page, 2008;Egan, 2008; Palmer, Lindgreen, & Vanhamme, 2005), the IMP networksapproach to relationship marketing can be seen as most relevant anduseful in understanding the KAM approach. A number of studies on

Please cite this article as: ALHussan, F.B., et al., Environmental factors inflcontext, Industrial Marketing Management (2014), http://dx.doi.org/10.101

KAMhavemainly analysedKAMusing the Industrial Network Approach(e.g. Homburg et al., 2002; Hutt & Walker, 2006; Ming-Huei & Wen-Chiung, 2011; Pardo, Salle, & Spencer, 1995; Spencer, 1999; Workmanet al., 2003).

This study is based on the Arab World, which is founded on a clan-network society that nurtures networked business relationships. Conse-quently, applying the networks approach in this analysis seemed to bemost appropriate for understanding and analysing KAM in the Arabcontext. The IMP2 industrial network approach exceeds the analysis ofdyads (as in the interaction approach) to networks (Axelsson &Easton, 1992), since ‘dyadic relationships are embedded in a larger setof exchange relations called a network’ (Hutt & Walker, 2006, p. 468).A network is a set of actors or social entities that are connected by aset of ties or relationships (Borgatti & Foster, 2003; Hutt & Walker,2006). Ford, Gadde, Håkansson, and Snehota (2003) define networksas “companies and their relationships between them” (p. 5). Morespecifically, according to the industrial network approach, the evolutionand development of business relationships take place in terms ofchanges in three dimensions: actor bonds, activity links and resourceties (Araujo & Easton, 1996; Axelsson & Easton, 1992; Ford, 1997;Håkansson & Johanson, 1992; Håkansson & Snehota, 1995; Veludo,2009). These represent the substance of the business relationship,and may be seen to capture the ‘formal’/‘organisational’ aspects ofKAM (Shaw, 2003). These dimensions are explained in more detailbelow:

• Activities: Activities describe what is done in the network. Håkanssonand Johanson (1992, p. 30) state that ‘an activity occurs when one orseveral actors combine, develop, exchange, or create resources byutilising other resources’. The activities include goods and services/manufacturing, administrative, technical and commercial issues thatcan be connected and exchanged among companies and organisationssharing a business relationship.

• Resource ties: Performing activities requires resources. Resource tiesconnect elements of companies together. Actors are the ones whobring resources and all resources are controlled by actors, either bysingle actors or bymany actors who combine their resources to createa shared resource (Håkansson & Johanson, 1992). The resourcesinclude technological, human, marketing and other resources whichinteracting organisations share and decisions about which canbecome dependent upon another's resources.

• Actors: Actors are defined as those who perform activities and/orcontrol resources. Organisations and individuals contribute to busi-ness relationships, including key account managers, senior managersand sales teams.

These three interrelated factors are combined in a conceptual frame-work to operationalize KAM (Fig. 1).

Scholars argue that changes in these relationships are reflected inthe relationship's attributes — the informal/relational dimensions suchas trust, commitment, satisfaction and bonds (Biggemann & Buttle,2009; Huang & Wilkinson, 2006). This is supported by other researchfindings which indicate that in addition to substance, ‘interaction’between the organisations is paramount to the establishment anddevelopment of relationships. These interactions not only include allactivities essential to establish business relationships such as makingvisits andphone calls and attendingmeetings, but also include ‘social in-teractions and the types of activities typical of a friendship relationship’(Shaw, 2003, p. 153). Consequently, it is argued that when consideringwhat drives the success of KAM, researchers need to focus on both theformal organisational aspects of KAM and on the informal/relationalaspects of KAM (Ivens & Pardo, 2007; Tzempelikos & Gounaris, 2011).

Furthermore, the IMP network approach emphasises the connectiv-ity of companies in that individual companies are part of a larger setting,indicating that the environment of firms needs to be acknowledgedwhen analysing a company's activities and strategic decisions(Håkansson, 1982; Håkansson & Snehota, 1989). Consequently, to



(Adapted from Homburg et al., 2002; Workman, Homburg, & Jensen, 2003; Håkansson & Johanson, 1992)

Fig. 1. KAM framework.(Adapted from Homburg et al., 2002; Workman et al., 2003; Håkansson & Johanson, 1992).

3 Isomorphism is the extent to which organisations adopt the same structures and pro-cesses as other organisations within their environment (Zucker, 1977).

3F.B. ALHussan et al. / Industrial Marketing Management xxx (2014) xxx–xxx

understand how KAM is designed and implemented, it is arguedthat the context and the environmental/contingency factors in whichcompanies are embedded, need to be analysed and understood(Homburg et al., 2002; Wengler et al., 2006).

2.2. The environmental context of KAM

Contingency theory (CT) suggests that firm strategies, structuresand behavioural processes will be dependent upon environmentalconditions (Lawrence & Lorsch, 1967). The central premise of CT isthat effectiveness, broadly defined as ‘organisational adaptation andsurvival’, can be achieved inmore than oneway and depends on the ap-propriate fit or matching of contingency factors/situational influenceswith internal organisational designs that can allow appropriateresponses to the environment (Zeithaml, Varadarajan, & Zeithaml,1988, p. 39). Thus, scholars from different disciplines argue that mana-gerial decisions and practices need to be aligned with environmentaldemands to obtain the desired work behaviours and improve perfor-mance (e.g. Schuler & Jackson, 1987; Waiganjo, Mukulu, & Kahiri,2012). Within the sales field, for example, the impact and managerialsignificance of examining situational influences, and the interactionbetween the sales behaviours and sales environment may be demon-strated in Thompson's (1973) statement that “every contact a salesmanhas…involves different human problems or situations. In brief, there isno one sales situation and no one way to sell” (Weitz, 1981, p. 89).

In effect, organisations do not operate in a vacuum as they areembedded in national and supra-national environments that can actas a source of competitive advantage as well as a constraint on firms'strategic choices and managerial actions (Aguilera & Dencker, 2004).Research evidence indicates that firms' organisational practices varyacross countries as they are affected by the socio-cultural and institu-tional environments in which they have evolved and developed(Al-Husan & Brennan, 2009; Kogut, 1991; Kostova, 1999; Yang, Su,& Fam, 2012). Changes in the environment bring with them newchallenges for the selling organisation. However, there is lack ofempirical evidence on the effects of the external environment onthe KAM dimensions (Homburg et al., 2002).

One of the environmental factors that have become increasinglyrelevant in the international context is “culture”. National culture isoften reflected in a country's organisational and managerial decisionsand practices (Schneider, 1989). Thus, it is argued that cultural


differences such as time and space, interaction models and attitudeshave a major impact on a number of key account management issues,including how relationships start and develop, buyer–seller interac-tions, business networks, business negotiations, the buying-decisionprocess in the buyer's organisation, selling styles, personal and institu-tional credibility, and sales force management (Usunier & Lee, 2005).

National culture is part of the wider institutional environment inwhich firms are embedded (Aguilera & Dencker, 2004). According tohistorical institutionalism, national institutions and governance princi-ples of each market economy or business system are country-specificand include: the state, the financial system, education and trainingsystems, the legal systems, authority relations, union strengths andlabour-management relations (Whitley, 1996, 2000). Scott (1995,2008) proposes that institutional environments possess three pillars:regulatory, normative and cultural-cognitive. The regulatory compo-nent of an institutional environment, relates to the laws, rules andregulations in an institutional environment and delineateswhat organi-sations can or cannot do. The normative pillar focuses on the valuesystems, beliefs and norms that prevail in a country and define whatpeople should or should not do. The cultural-cognitive pillar emphasisesmanagers' internal interpretive business practices which are shaped bytheir external cultural environment; and their business knowledge,which is shaped by their social interactions developed over time. Thispillar specifies what people will typically do (Yang et al., 2012).

According to DiMaggio and Powell (1983), to gain legitimacy firmsseek to achieve acceptable business practices to comply with threemain types of institutional isomorphism3: mimetic isomorphism,which results from standard responses to uncertainty represented byorganisations effort to imitate andmodel themselves on other organisa-tions; normative isomorphism, which stems primarily from profession-alization; and coercive isomorphism that stems from formal andinformal institutional pressures. Formal pressures include such factorsas political and regulatory influences (DiMaggio & Powell, 1983).With-in the sales and key account management domains, it is reported thatthe current regulatory and legal environment has put additional pres-sure on sales companies in order to select the right sales people. Withthe current trend in the legal environment, this has put restrictions onselling firms in how to approach sales. For example, the promises




given by key account managers, in-terms of gifts and prices to cus-tomers' needs to be in line with the regulatory system in the countryand adhere to company policies to avoid any unethical law-suits inthe future. Thus, key account managers and salespeople need to beprudent in what they advocate in their arguments with their customersin order to win sales (Jones et al., 2005; Moon & Gupta, 1997).

Informal institutions and pressures include norms and culturalexpectations in the society within which organisations function. In theArab World, “wasta” is considered an informal institution (El-Said &Harrigan, 2009) and it is similar to “guanxi” in China. In modern lan-guage,wastameans a connection or ‘the influence a person has throughpersonal and family networks’ (Neal, 2010, p. 253). Wasta reflects thetribal mentality of Arab nations that gives priority to family and kinover organisational objectives (Branine & Analoui, 2006), and like itscultural equivalent, guanxi in China,wasta uses social networks to influ-ence the distribution of advantages and resources (Mohamed &Hamdy,2008). Today, wasta continues to pervade the culture and all aspects ofArab countries' business, political and social life. Wasta is maintaineddue to theweak institutional structures in theArabWorld, andmost im-portantly, because of its intrinsic ties to “trust” and “family connections/networks”, which form the basis of any business relationship in theArab World (ALHussan & AL-Husan, 2013; Hutchings & Weir, 2006;Mohamed & Mohamad, 2011).

Changes in the other external contingency factors includingcustomers, competitors and technological forces, have been criticallyanalysed and summarised along with their implications for the sellingfirm's practice of selling and sales management. Jones et al. (2005) re-port that in terms of customers, and from a customer's perspective,there is an increasing need for salesperson knowledge, speed ofresponse, breadth and depth of communication and customisation ofinformation, and product/service offerings. However, they warn thatcustomer expectations continuously change and failing to adapt tothese changes can be detrimental to the selling firms operations. In asimilar vein, Boles, Barksdale, and Johnson (1997) and Boles, Johnston,and Gardner (1999) reported that the increasing complexity of thebusiness-to-business sales environment has forced suppliers to findnew approaches to doing business, including the use of the sales forceto build relationships with customers. As highlighted by Moon andGupta (1997), complex customers, in terms of high demand levels forindividual customisation and services or the existence of highly struc-tured buying procedures, as is the case in government departments,are increasingly creating the need for key account managers to havecloser relationships and more specialised knowledge of the customer,and to have more vertical and horizontal coordination to meet the cus-tomers' needs. In terms of competitors, it is noted that the increasingpressure to gain revenue and profit, and the increasing cost of servingcustomers, has exacerbated the level of stress put on key accountmanagers and selling organisations. Thus, to better cope with thesechallenges and to formulate more efficient strategies, sales manage-ment scholars are moving towards the application of customer lifetime value (CLV), which emphasises customer service and long-termcustomer satisfaction, to gain a competitive edge in the market. As fortechnology, in order to meet customer expectations, it is argued thatkey account managers and salespeople need to know more, and needto be able to access, store and retrieve data faster for their prospects.However, the adoption and implementation of technology in the salesfield is still lagging, because firms are concerned with the large amountof investment that needs to be put into technology and are unsure aboutgetting the expected returns on investment. Moreover, the sense ofbeing replaced by technology has created a negative attitude amongsalespeople (Jones et al., 2005).

3. Methodology

Since the focus of this research is exploratory and investigatinga much under-researched area of marketing, it was decided to


use a relatively unstructured approach to research design (Miles &Huberman, 1994). The research was designed to allow themes andnuances to emerge from the research data (Glaser, 1992) by utilisingtheoretical replication logic (Yin, 2003), where a new context can becompared against the existing theoretical frameworks from differentcontexts. This involves developing a rich contextual understandingand is an inductive research design.

The information under question was gathered though the use ofsemi-structured, in-depth interviews. The semi-structured nature ofthe interviews also allows for consistent data gathering procedures,which facilitate systematic analysis of the data (Bryman, 2004;Bryman & Bell, 2007). From the researchers' knowledge of Arab culture,it was anticipated that managers and other staff in Arab enterpriseswould be reluctant to reveal sensitive information or to disclose theiropinions or feelings freely to someone they have not met. We werealso aware that inter-personal contacts should be made to gain accessand to obtain the cooperation of respondents. Consequently, one-to-one, face-to-face interviews were seen as appropriate to enhancethe respondents' cooperation and reduce their reluctance to revealinformation.

Fifty (50) semi-structured interviews were conducted in Westernand Arab owned companies in financial services, IT, telecommunica-tions and heavy industry in Jordan. These interviews were conductedwith respondents from different levels and roles drawn from the com-panies to corroborate data, to ensure comparability, and to obtain asufficient depth and diversity of information. The respondents were di-rectly involved with key accounts and in the development of relation-ships with key customers. The respondents included senior managers,key account managers, key account directors and sales managers.Where possible the interviews were tape-recorded and later tran-scribed, although interviewees were allowed the opportunity to refuserecording (6 interviews were not tape-recorded, but detailed noteswere allowed to be taken). A summary of the participating companiesis presented in Table 1.

4. Results and discussion

The findings indicate that there were some similarities and somedifferences in KAM practices that were adopted by the companies inJordan (the Arab context), compared to KAM practices in a Westerncontext.

First, in terms of similarities, it was found that these mainly existedwithin the formal/organisational aspects of KAM practices, whichwere captured by analysing the components of the ARA model in eachorganisation. Overall, the evidence indicates that at the organisational/internal level, the companies strived, with varying degrees and scale,to do the following: to provide distinctive activities (A) such as offeringspecial pricing and integrated solutions; to devote more resources (R)including organisational restructuring, decentralisation and empower-ment of key accountmanagers, and training and development of key ac-countmanagers and teams; and to deploy the necessary actors (A) suchas dedicated and qualified key account managers and sales/supportteams with the involvement of top managers. Such practices arerelatively similar to Western KAM practices, implying that it is possibleto transfer some Western practices to Arab context at the formalorganisational level of KAM.

At the same time, differences existed in terms of the scale or intensi-ty of KAMpractices among the companies in the study and in the natureof what was implemented in practice. In terms of activities (A),analysing and developing customers' profiles, for example, were in con-trast with Western practices as more emphasis was placed on the per-sonal profile, rather than on the business profile, and includedpersonal data about the key customer and decision makers like theirmarital status, religion, their family origins and background, familyand friends' network, and education.



Table 1Summary of sample companies & codes.

Company code Industry Ownership Number of interviews Interview numbers

W-LA Heavy industry Western 8 1–8A-ZT Telecom Arab 4 9–12W-OT Telecom Western 12 13–24A-AR Financial services Arab 6 25–30W-SG Financial services Western 4 31–34A-AC Financial services Arab 4 35–38A-ST Technology Arab 10 39–48W-HS Financial services Western 2 49–50


As for resources (R), differences included the importance of theallocation of time to socialise with key customers before and after thestart of the business relationship, and the allocation of funds and phys-ical resources, such as budgets for gifts and entertainment of keycustomers, cars, petrol, laptops, mobiles, and presentation kits.

Regarding actors (A), this included, heavy top/senior managementinvolvement in KAM at strategic and tactical levels with a more“hands-on” approach compared to the Western “hands-off” approach.

An examination of the factors that influenced the similarities anddifferences in KAM practices were found to be attributed to a numberof contingency factors. These are considered under four main headings:(i) intensity of competition, industry sector and ownership; (ii) productand consumer complexity; (iii) Western influence in education andbusiness; and (iv) institutional and socio-cultural influences (Fig. 2).

4.1. Intensity of competition, industry sector and ownership

A major driver for the implementation of KAM and the approachutilised towards the management of key accounts was the intensity ofcompetition and the need to align internal processes with competitivepressures (Wengler et al., 2006). This was very clearly stated as themain factor by the companies operating in the different sectors. Changesin the market structure arising from globalisation and changes ingovernment policies had led to the opening up of the market to for-eign competition, particularly through structural reforms and theprivatisation programme that the Jordanian government embarkedupon in 1998, under the auspices of theWorld Bank (WB) and the In-ternational Monetary Fund (IMF). This included telecommunicationscompanies and the cement manufacturing company. When W-OT wasprivatised and new Western owners acquired equity shares and tookover themanagement of the company through amanagement contract,the strategic accounts department, along with new processes and

Product Complexity

Customer Complexity

KA

A-

Institutional/Cultural

• Regulations• Econ. Policies• Education system• Wasta

• Tribe• Religion

Fig. 2. Summary of external contingencie


infrastructure, was created to cater for the most important customers.For example, the strategic account manager at W-OT pointed out that:

“The strategic account department was established in May 2005…be-cause of the end of our monopoly and the opening up of the market aswe face competition in the telecommunications market now. So it wasnecessary to establish this department to give special treatment andspecial care to our top customers.”

[20, W-OT]

In a similar vein, the major accounts section head observed that:

“…Now there is competition and sowemade these changes tomaintainour corporate business customers because a lot of revenue is comingfrom corporate business and our aim…is to build business relationswith our key customers…they have to feel differentiated in treatmentand that they are treated as kings as we said otherwise we might losethem to competitors…. We don't like to be seen as a provider and themas customers we want to work as partners. Partners, means we wantcommitment instead of customers and vendors. This is our objectivewith corporate business….”

[17, W-OT]

In terms of W-LA, although the company was privatised in 1998, noreal changes in terms of key account management were brought aboutbecause it continued to have a monopoly over cement production andtrading. However, towards the end of the monopoly and with greatercompetition, in 2008, some changes were made and new proceduresand resources were introduced such as the introduction of small scalesales support teams, the provision of parent company-based trainingto key accountmanagers, and the offering of internal training to the cus-tomers. Further plans were made for 2009 to revamp the key accountsprocesses, activities and resources, including the recruitment of moreeducated and qualified key account managers in order to be ready for

Competition

Industry Sector

Ownership

M

R-A

Western Influence

• Education• Training• Experience• Expatriation

s affecting KAM in an Arab context.




the competition which was entering the market in 2010. For example,the sales director at W-LA commented:

“…As the market is opening up we are expecting high competition andwe are expecting some customers to leave us, so we are trying to makethem as involved as possible with us, and we are trying to make themour friends and partners by giving special treatment and resources….”

[1, W-LA]

The influence of the increased competition was relatively similar inthe other sectors including the private financial companies and wasalso reflected in the improvement in terms of speed of service, escala-tion of authority and quicker access to senior management by keyaccount managers, and more training to key account managers andsenior managers. The branch manager at A-AC stated:

“In the past it was difficult to meet with the senior managers but nowwith competition it became easier for the account managers and keycustomers to see the senior managers…and senior managers startedto make personal visits to key customers, and more involvement ofsenior managers….”

[35, A-AC]

In a similar vein, the SME unit manager at A-AR reported:

“…Due to competition the board emphasised that senior managers andkey account managers should take training on relationship manage-ment, communication skills, and IT skills…also some empowermentwas given to key account managers to act as customers' advocatesand discuss their issues with senior managers.”

[27, A-AR]

The intensity of competition in the IT sector also influenced the im-plementation and the development of key account management toserve the key accounts more efficiently. Thus, the Large CorporateAccounts (LCA) division head at A-ST observed that:

“What brought us to account management is the level of competition.The system was that a sales person dealt with everything…but after2004 the market became too competitive and therefore we segmentedthe market and started to utilise our resources to serve key customersmore efficiently by assigning a key account manager to specificsegments and a smaller number of customers…and we introducedsupport teams….”

[43, A-ST]

The findings also show that the ownership structure, nature of thebusiness and beliefs of top managers were important factors that influ-ence the approach to KAM and its implementation.When newWesternfirmswere set up and some local companies were taken over by foreignMNCs, new structures and new policies were introduced to establishKAM and give it more strategic importance. Where necessary, adapta-tions were made to accommodate the differences and to overcomestructural and cultural barriers. At A-ST, the LCA division head claimedthat:

“We adopted our American MNC's segmentation model because we aretheir channel partners and to stay in good relationship with them…thiswas a clever move to segment the market this way particularly whenthemarket was in the booming stagewhich helped in focusing on differ-ent customer segments. However, we further adapted the segmentationmodel to suit to our market more….”

[43, A-ST]

Hence, the findings indicate, in line with other studies (e.g. McDonald&Woodburn, 2008; Moon & Gupta, 1997; Wengler et al., 2006) that theintensity of competition is an important factor influencing the implemen-tation of KAM, and these in turn, are shaped by the ownership structure,


beliefs of top managers and parent company international orientation(Kostova, 1999; Taylor, Beechler, & Napier, 1996).

4.2. Product and customer complexity

The second factor which seemed to influence the implementationand design of KAM was the complexity of products and complexity ofcustomers. Product complexity is illustrated in terms of technologicalsophistication and/or in terms of knowledge of application. The tele-communications and IT companies in this study provided highly com-plex technological products that necessitated the close involvement ofkey account managers and the support of specialised and dedicatedsales teams, reflecting the increased participation of different actorsand support at both the vertical and horizontal levels, and coordinationof different activities. It also involved establishing clear processes andprocedures to ensure the cooperation of the different actors and func-tions as well as adjusting organisational structures to incorporate theselling teams. The strategic accounts post-sales support Manager atW-OT stated that:

“We provide integrated solutions to our customers and sophisticatedtechnology and we work on a number of projects with our customersthat also involve providing the right infrastructure for them, thus weneedmany peoplewithmany specialisationswhowork exclusivelywithkey accounts…. That's why we have established pre-sales and post-sales support teams.”

[25, W-OT]

In a similar vein, the corporate sales director at A-ZT indicated:

“…This what brought us to integration and integrated solutions…ourkey account customers have big projects and demand many services,therefore to be successful we have to provide everything for them fromtelecommunications to even buying a house, andwemust dedicate veryqualified key account managers and special teams to deal with all theirneeds….”

[12, A-ZT]

The KAM design and implementation were also influenced by cus-tomer complexity. This included large complex key customers whohad large coordination needs as they required high levels of services,orwere involved inmany projects that needed special provision and so-lutions, or required special customisation or service attention, or hadseveral branches that needed to be connected and served effectively.For example, some customers required to be connected to their over-seas headquarters like some multinational companies operating in thecountry, or some very active embassies like the American Embassywhohadmany projects and requirements. Other complex customers in-cluded government departments that required a special kind of treat-ment and attention, as they had a number of very structuredprocedures that required large coordination needs. For example, theSME division head at A-ST noted:

“…We need account management, because for example, you have gov-ernment purchasing. Here because there are plenty of people involvedand there is centralised purchasing centre for the government whichbuys for government bodies, so this is why you need account manage-ment to be able to deal with all people….”

[42, A-ST]

In a similar vein, the head of sales at A-ST noted:

“…The banking sector, for example, is very demanding as they havemany branches that need to be connected and they require many ser-vices as well…therefore they need larger number of dedicated peopleto serve them and that's why we have dedicated account managersand sales teams….”

[9, A-ST]




However, where customers were less complex or the product wasless complex, such as in the case of finance companies and cementmanufacturing, it seemed that the need for specialised and dedicatedselling or support teams was less critical. These findings support the ar-guments that complex products and complex customers require multi-level selling and intensive coordination efforts and participation, bothvertically and horizontally (Moon & Armstrong, 1994; Moon & Gupta,1997; Wengler, 2006) to implement business strategy successfully(Perry, Pearce, & Sims, 1999) and to respond to the needs to internallyalign KAM (Guesalaga & Johnston, 2010). When the product and cus-tomer environmental complexity are low, extensive vertical participa-tion and extensive lateral support from selling teams become lesscritical to the success of the selling effort (Homburg et al., 2002; Moon& Gupta, 1997).

4.3. Western influence in education and business

The findings indicate that at the formal/internal organisational level,the design and implementation of KAM was influenced by the educa-tional background, work experiences and interaction with Westerners.Training received bymanagers inWestern Anglo-Saxon business ideol-ogy seemed to be a driving force behind the noted similarities withWestern KAM practices and design.

4.4. Education and career experience

AWestern influence in education stemmed from the fact that manykey account managers and senior managers received their education inWestern universities in the UK, France, USA and Canada. Others hadstudied in Jordanian universities which essentially appliedWestern syl-labus and learningmaterial such as books and research articles, and hada number of joint courses and partnerships with Western universities.Indeed, many Jordanians study abroad each year, either at the under-graduate or postgraduate levels. The most popular country destinationsinclude the USA and the UK. In 2008, for example, 1800 and 1200Jordanians studied in the USA and UK, respectively (Nusair, 2011).

Some Jordanian managers were also exposed to Western ways ofengaging in business through their career and work experience, assome of them had worked for foreign and Western multinationalcompanies, in Western countries or other countries in the region.

4.4.1. Training and developmentExposure toWestern ways and principles of business came through

the deliberate delivery of Western training courses. Almost all of thecompanies in this study provided a range of training and developmentcourses that were delivered by American and European overseas con-sultants and facilitators. Furthermore, the courses that were deliveredin-house or by local consultants were also based on Western contentand courses. In addition, some senior andmiddlemanagers, particularlythose in themultinational subsidiaries, had also received training at theMNCs' headquarters or other overseas locations to learn the ‘parentcompany's way of doing business’ and to gain a better understandingof parent company's policies and strategies.

As a result, senior managers and account managers were exposed toKAM practices from a Western approach, which indicates an effort bymanagement to transfer KAM practices from a Western context to anArab context. This underlines an assumption or belief by some seniormanagers that KAM practices are ‘universal’ practices that can be trans-ferred across borders, which reflects the ‘universalist’ approach to thetransfer of practices (Taylor et al., 1996).

4.4.2. ExpatriatesThe influence and transfer of Western business ideology and con-

cepts may have taken place through expatriates who were usuallyappointed by the parent companies to transfer and implement the par-ent companies' strategies and policies in subsidiaries. Consequently,


through working with these expatriates, local managers had been fur-ther exposed to Western business practices in general and, in thiscase, to Western KAM. For example, the Chief Executive Officer (CEO)and theMarketing and Sales Director atW-LAwere French. TheMarket-ing and Sales director and a number of other directors and board mem-bers were also French. Similarly, expatriate senior managers wereappointed in Jordan at W-HS and W-SG including the CEOs anddirectors.

These findings confirm the ‘upper echelons’ theory (Hambrick &Mason, 1984) and the findings of other studies (e.g. Carpenter,Geletkanycz, & Sanders, 2004; Jarzabkowski & Searle, 2003; Nishii,Gotte, & Raver, 2007; Papadakis & Barwise, 2002), which emphasisethat managerial background characteristics such as functional trackand other career experience, formal education, socioeconomic roots,age, and group characteristics reflect their values, knowledge, skillbase, motivation, cognitive base and style, perceptions, and interpreta-tion of internal and external situations. These can have a significant ef-fect on their actions and strategic choices, and in this study on thedesign and implementation of KAM practices and programmes.

4.5. Institutional and cultural influences

Thefindings suggest that the implementation of KAMwas also influ-enced by both formal and informal institutions. These contingenciesacted as push factors towards ‘coercive isomorphism’ (DiMaggio &Powell, 1983), and hence towards the adaptation of KAM practices tobe more responsive to the local environment. In effect, these coercivepressures acted as forces of divergence and constrained the transfer of“Western KAM” practices to the Arab context.

The first factor was the regulatory environment in which the firmsoperated. The country's laws and regulations appear to exert a strongpressure on management to comply and honour legal commitmentsand hence to adapt KAM practices in a way that limited the range of ac-tivities and resources thatwere utilised to differentiate key account cus-tomers and to improve the competitive advantage offirms. For example,strong institutional regulations in the banking sector allowedmore gov-ernment intervention through the Central Bank directives and regula-tions, and acted as a barrier to the implementation of a wide range ofactivities which limited the degree of responsiveness to customers'needs. In relation to this, the senior relationship manager at W-SG,and the branch manager at A-AC noted, respectively:

“…Furthermore, each subsidiary of [our bank] is adapted to that coun-trywhich itworks in. There are general policies, however, because of theJordanian central bank laws these policies are not applied fully so theyare adapted to suit the laws in that country.”

[32, W-SG]

“…You can say the main weakness that we have is the speed in makingdecisions. When a customer asks for a loan and we are talking here inmillions, this usually goes through a rigid process because of the govern-ment regulations.We try our best to deliver as fast as possible to accom-modate the clients' needs, but it is not easy to do so.”

[37, A-AC]

These regulations and associated risks also limited the degree of de-centralisation of decision-making and the empowerment of key accountmanagers, which were considered as important resources by the ac-count managers, particularly in a culture characterised by centraliseddecision making and high power distance. However, other companiesin the study had witnessed some shift in terms of decentralisation andempowerment, which was reflected in giving key account managersmore authority when dealing with their key customers and more flexi-bility and speed in decisionmaking.Within thefinancial sector, decisionmaking resided with senior managers who had a more “hands-on”




approach to KAM compared to Western firms who usually had a more“hands-off” approach. Irrespective, it was also evident that despite theconstraints, some financial institutions were endeavouring to build in-formal relationships with key account customers. As one manager atW-SG noted:

“…in the banking sector wherever you go, banks are giving the samelevel of services and products. So what we are left with is the personaltouch. The personal touch like calling up the customer in the morningand asking him to come-over for a cup of coffee, can really make differ-ence and the customer this way feels he is being appreciated andrespected and most importantly happy. This makes a lot of differencein our culture.”

[33, W-SG]

The findings also reveal that differences in education and training in-stitutions, and the business environment seemed to restrict the transferofWestern KAMpractices, at least in the short run. This was evident, forexample, in terms of training and development. This was highlighted atW-OT by the corporate marketing manager when they first tried toapply customer satisfaction principles and to train the account man-agers, the KAM principles were not clear to them and they were notable comprehend the new system and some key account managersscored low on the tests. Thus, the corporate marketing manager notedthat:

“…After the joint venture we made the changes to the whole corporateunit wewere looking for developing the accountmanagers because theyare the main assets for the corporate and enterprise unit. However, itwas not easy as the mentalities of the account managers were differentand applying customer services principles were also difficult to inte-grate, at first. When they took tests for CRM or customer satisfactionthey scored very low or failed the test because it was difficult for themcomprehend the logic behind it.”

[22, W-OT]

Similarly, at W-LA, training programmes which were sent by theparent company had to be adapted to suit the culture. Other trainingprogrammes could not be applied successfully as the sales and accountmanagers were not able to understand the concepts behind them andtheir level of education was not sufficient. A marketing and strategyexecutive observed that:

“…We tried to explain concepts like value based selling to our sales staffand account managers, however this concept did not appeal to themand its application was not possible as our staff did not comprehendthe meaning of what we were trying to train them on.”

[3, W-LA]

In other situations, other activities had to change to suit the cultureof the customers and the nature the market such as market segmenta-tion. For example, the corporate relationship manager at W-SGobserved that:

“…The segmentation process is broken down into corporate and retailsectors, similar to the parent company in France. However, in the corpo-rate sector what differentiates it from France is the customers' capacity.In Jordan, for a customer to be considered to be a corporate customer, hemust have the turnover of over 1.5 million JODs…so we made thechanges to suit out customers.”

[33, W-SG]

At an informal level, some other factors, particularly cultural valuesand informal institutional arrangements (North, 1990) such as“wasta”, still played an important role in differentiating the approachto KAM compared to the West. More specifically, the findings demon-strated the significance of wasta as an antecedent to establishingtrust and the commitment to long-term relationships. The findings


supported the view that within the Arab context, trust needs to beestablished before any business relationship can progress, and thattrust is usually established at the personal level (Hofstede, 1994) inwhich wasta connections play a primary role (Al-Omari, 2008). Hence,a major part of the key account manager's role was to utilise his familyand wasta social networks to establish and retain key account relation-ships. This is in contrast to theWestern context, inwhich trust is usuallyestablished at the organisational level (Wilson & Brennan, 2001). Theimportance of personal connections in establishing KAM in the Arabcontext is reflected in the following quote by one of the account man-agers at W-OT:

“A key customer terminated his contract with another provider just be-cause he knowsme and he has utter trust inme and that I will never de-ceive him with any product or any offer that I will provide him with.Because he knowsme personally andwe have trust between us the cus-tomer came to perceive that my company is better for him.”

[16, W-OT]

In the Arab World, business is ‘personal’ and is done with a trustedperson and not with the organisation as in the West. This, in turn, is areflection of weak formal institutions in the Arab World (Khanna &Palepu, 1997).

Cultural values were also important in setting the selection criteriaof key account managers as they had a direct influence on how key ac-count managers established key account relationships and how theymaintained them. The recruitment and selection criteria for key accountmanagers encompassed what may be considered as modern/Westerncriteria such as communication skills and strategic vision. More impor-tantly, they encompassed some distinctive characteristics that wereArab-specific, such as age, wasta, ethnic background and religion,reflecting the strong and persistent influence of tribal and religious in-stitutions in the ArabWorld and highlighting some of the critical factorsthat needed to be taken into consideration at the “informal/relational”level to ensure the success of the KAM relationship in an Arab context(Al-Ramahi, 2008; Tlaiss & Kauser, 2011).

5. Conclusion

This article used data from 50 semi-structured interviews in West-ern and indigenous companies to identify and understand the factorsthat influence the design and implementation of key account manage-ment programmes and practices in an Arab context where there hasbeen a dearth of research. The findings extend the sales and key accountmanagement literature and the transfer of practices literature in inter-national marketing by providing empirical evidence of the way inwhich “external contingencies” impact on the design and implementa-tion of KAM.

Inter-organisational relationships are a product of a number of fac-tors including the intensity of competition and ownership structure;product and customer complexity; Western influences on educationand business; and institutional and cultural influences. Such factorsalso had implications for the degree to which multinational companieswere able to transfer their KAM practices. Factors such asWestern edu-cation and business knowledge developed over time through repeatedsocial and business interactions with Western partners. The intensityof competition and ownership were pushing for “convergence” throughstandardisation and the adoption of universal practices through thetransfer of western KAM practices, while factors like government regu-lations and economic policies, and wasta, stemming from the ‘institu-tional void’ (Khanna & Palepu, 1997), tribal mentality and culturalinfluences were pushing for “divergence” and the adaptation of localKAM practices.

As a result of the dynamic interaction of these different contingencyfactors, the findings indicate and confirm what may be termed‘constrained convergence’ (Muller, 1999) or ‘crossvergence’ (Ralston,




2008). Therewere some similarities and convergence, particularly alongthe formal/organisational aspects of KAM in terms of the activities car-ried out, the resources utilised and the actors involved in the manage-ment of KAM. At the same time, there was divergence and markeddifferences in terms of the informal aspects of KAM. Consequently, thefindings challenge the view that KAM can be “rolled out” into any inter-national context. Furthermore, the findings support the IMP Groupsview that the social/relational dimension of business relationships isnot only important but also crucial for managing key account relation-ships successfully in an Arab context.

5.1. Managerial implications

This study makes a valuable contribution to practice because it illu-minates the way for expatriates and foreign MNCs to establish relation-ships and to implement KAM in the ArabWorld. The study showed theimportance of wasta (personal networks/connections), which reflectsthe tribal mentality of Arab nations that gives priority to family andkin and in-group members over organisational objectives (Branine &Analoui, 2006). This implies that to manage key accounts effectively inan Arab context, it is essential to focus on having the right connectionsfirst, rather than to focus on activities and the benefits of the productsand services offered to business partners, as in the West. Having theright connections is also vital to gain the trust that is necessary beforeproceeding with any business interaction.

5.2. Limitations and future research

The study is limited to operations in one emerging country situatedin a novel setting in one particular region of the world — the MiddleEast. Given that there is a lack of research in KAM in Arab and emergingeconomies, there is substantial scope for conducting comparative stud-ies in the Middle East region and other emerging economies to ade-quately explore the important features of KAM in different contexts,and the factors that shape their implementation processes and ap-proaches. At the same time, the study can be used as a reference pointfor comparison with other countries in the region and other emergingeconomies.

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F.B. ALHussan et al. / Industrial Marketin

Zupancic, D. (2008). Towards an integrated framework of key account management.Journal of Business & Industrial Marketing, 23(5), 323–331.

Fawaz Baddar ALHussan is an assistant professor in the Marketing Department at IESEGSchool of Management, Université Catholique de Lille in France. His research interestsinclude key account management, business-to-business marketing, relationship market-ing and international marketing. He has published in the International Journal of HumanResource Management.

Faten Baddar AL-Husan is a senior lecturer at the University of Bedfordshire, UK. Herresearch interests include key accountmanagement, knowledgemanagement, andmulti-nationals' strategies and policies. She has published in the Journal of Business & IndustrialMarketing, International Journal of Human Resource Management, European Manage-ment Journal, Personnel Review and Thunderbird International Business Review.


Chavi C.-Y. Fletcher-Chen is an assistant professor in theMarketing Department at IESEGSchool of Management, Université Catholique de Lille in France. Her research interests in-clude conflict management, knowledge transfer, innovation management, relationshipmarketing.

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Environmental factors influencing the management of key accounts in an Arab Middle Eastern context

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