Demand For and Use of Global Account Management

Demand For and Use of Global Account Management

By George S. Yip, David Bruce Montgomery, Belen Villalonga
1998Working Paper No. 1520

We develop a model of the extent to which multinational companies use global account management (GAM), its determinants, and its effects on performance. A study of 191 senior executives' perceptions, using structural equations modeling, shows that use and performance effects are positively related to customers' demand for it, which is in turn related to the degree of globalization of customers. Specifically, we find that 1) the more globalized customers are, the greater the extent to which they demand GAM; 2) demand form GAM is greater now than in the past; 3) uniform prices are not the most demanded aspect of GAM; 4) the greater the extent to which customers demand GAM the greater the extent to which it is implemented within the supplier; 5) most suppliers will adopt GAM with a lagged response to globalized customers' demands (with some indication the U.S. suppliers are responding more with GAM programs than are the non-U.S., primarilty European suppliers); 6) most suppliers will make greater use of GAM in the future than they do today; 7) the use of global account managers and global account support staff is greater than other aspects of GAM programs; and 8) the greater the extent to which a supplier's GAM program responds to customers' demands for it, the more favorable the effect on the supplier performance.