The transition from free to predetermined organisation is smooth. There is no such thing as a totally "free" organisation because any organisation works only if fundamental conditions for action are predetermined. The strictness of the instructions governing the actions of the external sales force differs from one enterprise to another. Experienced sales managers follow the motto: "The larger the sales organisation, the stricter the rules which govern it". The sales organisations of industry retailers are as a rule conducted with great liberty. For this reason sales representatives working in this industry have to develop a great deal of entrepreneurial instinct.

The difference between the so-called predetermined and free organisation can be best described by looking at important organisational features.

Predetermined and free organisation
- Status of the sales representative

A distinction is made between a commercial representative (free organisation) and a travelling salesman (predetermined organisation). Commercial representatives are independent businessmen with the on-going task of soliciting business for other companies or to sign contracts in the name of other businessmen. A commercial representative is independent if

- he can arrange his work freely and determine his working hours of his own accord
- he bears the costs of his own expenses, maintains an office or place of business and does his own bookkeeping.

For the dependent nature of the travelling salesman's work is to be said that

- the salesman or sales representative is bound to follow the orders of the businessman, especially with regard to place, time and content of his work;
- his working hours are fixed;
- he receives a performance-independent, fixed salary and can expect continued pay in case of sickness and leave.

Predetermined and free organisation
- Payment in the sales force

The remuneration of the external sales force consists in most cases of a fixed part (salary) and a variable part (bonus/commission). The higher the variable component, the more "freedom" can be granted. Turnover losses owing to a lack of organisation in the travelling district are not compensated and therefore do not run up costs. However, if the turnover losses become too large due to a lack of organisation, the enterprise as a whole is at risk.

Predetermined and free organisation
- Clear zoning of sales territories

Organisations which do not adhere to this feature usually work without "permanently employed" sales representatives. The remuneration of representatives takes place exclusively on a bonus or commission basis. The so-called structured distributors which also employ part-time agents prefer this method because the offered services should mainly be sold within the family or among friends and acquaintances. A geographic delimitation of the sales territory would naturally contravene this aim. In contrast, the production retail trade tends to zone the sales territories of its sales representatives mainly on a geographic basis. This classification can be further broken down in accordance with the customer type (metal, wood, stone trade) which leads to a finer divisionalisation. The advantage of a precise demarcation lies in the pin-point exact allocation of the distribution resources of an enterprise.

Predetermined and free organisation
- Leading a sales force organisation

In the production retail trade the sales representative is usually a direct subordinate of the sales manager. The task of the sales manager is to support his sales representatives in the fulfilment of the turnover targets. One of the most important jobs of the sales manager is to travel with his representatives. This involves coming along on a whole daily tour. The aim is to coach and lead the employee. At the same time the sales manager has to check if the set conditions, such as the tour plan, are realistic or need to be rescheduled. Free organisations don't lend that kind of support to their sales representatives. There can be so little support that the marketing manager only checks the sales figures and conducts his staff management by keeping an eye on this reference number.

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