Implementing pricing authority delegation in business-to-business sales: performance consequences and boundary conditions

As sales teams seek greater decision-making autonomy and pricing strategies become increasingly customer-specific, pricing authority delegation (PAD) in business-to-business (B2B) sales moves to the top of the managerial agenda. Using a multimethod approach combining qualitative expert interviews and a quantitative survey, this research leverages insights from B2B executives and sales managers to investigate the consequences of PAD. Grounded in agency theory, this research reveals an inverted U-shaped effect, that is, PAD improves pricing performance up to a certain point, after which its benefits decline. Thereby, the authors highlight three moderation effects that help management influence the turning point and the maximum of PAD’s performance benefits: authority individualization via sales managers, top management involvement in pricing decisions, and salespeople’s organizational identification. The findings provide actionable guidance on how firms can strategically influence PAD implementation within their organizations while maximizing its positive performance outcomes and minimizing risks.