The Impact of Network and Spatial Embeddedness on Salespeople Inactivity in Direct Selling Organizations

Abstract

Drawing upon job embeddedness theory, this paper examines whether network and spatial embeddedness impact direct salespeople’s tendency to remain active or become inactive. Network embeddedness is defined as one’s connection with other salespeople (micro-level), and one’s affiliation to a network family with a view of an overall network (macro-level), including the role of status of network members. Spatial embeddedness examines the role of geographically close salespeople. Leveraging a novel empirical dataset with a proportional hazard model, the results suggest that both micro-and macro-level network embeddedness help decrease salespeople inactivity. The impact of spatial embeddedness, however, varies by network family. Exposure to high-status salespeople also reduces inactivity, especially within the same network. Our results suggest that macro-level network embeddedness has the highest impact on inactivity followed by micro-level embeddedness. Both are higher than the impact of own performance.