workman 1998 marketing organization an integrative framework of dimensions and determinants

8/10/2019 Workman 1998 Marketing Organization an Integrative Framework of Dimensions and Determinants

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John

P

Workman Jr., Christian Hom burg, Kjell Gruner

Marketing Organization:

An Integrative Framework of

Dimensions and Determinants

Although there is increasing interest in topics related to the organization of the marketing function, there is rela-

tively little research that relates marketing organization to a business unit's environment. This article, based on in-

terviews in U.S. and German firms, explores how the organization and role of marketing vary across business

contexts. After reviewing prior research and describing their methodology, the authors present a concep tual frame-

work that relates aspects of marketing organization to the business environment. The authors then draw on field

observations and prior research to describe variations and develop illustrative propositions for three organization-

al dimensions: (1) the structural location of marketing and sales groups, (2) the cross-functional dispersion of mar-

keting activities, and (3) the relative power of the marketing subunit. The authors conclude with theoretical and

managerial implications.

D

uring the past few years, there has heen growing in-

terest in mark eting's cross-functional relationships

with other departments as well as in issues of how to

reengineer organizations around key business processes to

deliver better products and services to customers. Topics

that touch on these organizational issues include the effects

of a market orientation on business performance (Jaworski

and Kohli 1993; Slater and Narver 1994), the creation of

learning organizations (Sinkula 1994; Slater and Narver

1995), the identification of core capahilities of market-

driven firms (Day 1994), and the Importance of managing

networks of relationships with key suppliers and customers

(Achrol 1991; Wehstcr 1992).

Although individual studies have focused on selected di-

mensions of marketing organization, they have not been in-

tegrated. Our study aims to provide an integrative

framework that encompasses hoth structural and nonstruc-

tural aspects of marketing organization. This framework al-

so makes explicit the link between environmental and

marketing organizational dimensions.

The topic of marketing organization fundamentally ad-

dresses the allocation of activities to groups. Therefore, we

believe that any discussion of marketing organization must

acknowledge two different perspectives: marketing as a

functional group within the organization and marketing as a

JohnP Workman Jr. is Associate ProfessoroiMarketing, Creighton Uni-

versity. Christian Homburg is The Otto-Beisheim Professor of Business

Administration and Marketing and Chair of the Marketing Department,

WHU Koblenz, Germany. Kjell Gruner is a former doctoral student at the

WHU and is currently employed by the Boston Consulting Group, Ger-

many. The res eard i reported in this article was supported by funding from

the Marketing Science Institute in the United States, the Fritz-Thyssen-

Stiftung in Germany, the Center for Global Business Research, and the

University Research Council, University of North Carolina. The authors

thank Harley Krohmer of the WHU in Germany for his research assis-

tance and Chris Moorman, Michael Hutt, Kevin Keller, Bill Perreault, and

Charlotte Mason for comments on a previous version of this article-

set of activities (e.g., advertising, product management,

market research, sales, customer service) whose placement

varies across organizations (Glazer 1991 ; Piercy 1985;

Varadarajan 1992; Web ster 1992). The first, which we label

i

functional group perspective,

focuses on marketing as a

distinct organizational entity, whereas the second, which we

label the

activity-based perspective,

emphasizes activities

traditionally con sidered m arketing and sales activities. Most

definitions of marketing and debates about its domain use an

activity-based perspective (e.g., Bagozzi 1975; Enis 1973;

Hunt 1976; Kotler and Levy 1969). For example, the current

American Marketing Association (AMA) definition of mar-

keting is as follows: "Marketing is the process of planning

and executing the conception, pricing, promotion, and dis-

tribution of ideas, goods, and services to create exchanges

that satisfy individual and organizational objectives"

Mar-

keting News 1985). Conversely, a significant portion of the

research on marketing organization has adopted a function-

al group p erspective (e.g., Anderson 1982; Walker and

Ruekert 1987; Weitz and Anderson 198 ). Our research is

integrative, in that we draw on bo th functional group and ac-

tivity-based perspectives of marketing.' These perspectives

are neither mutually exclusive nor opposite ends of a con-

tinuum, but rather are akin to looking at the world through

glasses with different colored lenses.

Our research has important implications for both re-

search and practice. As Day (1997, p. 67) notes, "organiza-

tional issues are rising to the top of the agenda on the future

of marketing." However, much of the research on marketing

organization has been done on isolated organizational as-

'In an activity-based perspective, sales activiiies arc included in

marketing because process definitions (such as the AM A's) include

sales as a key marketing activity. However, when addressing a

functional group perspective of marketing, most authors (with the

notable exception of nderson 1982) focus on the group within the

firm that is labeled "marketing" and theretbre do not include sales

with marketing.

ournal of arketing


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pects, without an integrative framework in which to consid-

er these decisions or acknowledgment of environmental fac-

tors that might lead to different organizational forms. By

developing an holistic framework, we not only provide a

synthesis of prior research but also identify avenues for fu-

ture empirical w ork. For a managerial audience, we identify

marketing organization and environmental parameters to be

considered. Rather than implying that some new fonn is the

wave of the future, we provide a more complex and bal-

anced view that emph asizes the range of decisions and types

of situations in which one form or another may arise. We be-

gin by reviewing prior theoretical and empirical research re-

lated to marketing organization, as well as marketing's

relationship with other functional groups in the firm.

Literature Review and Theoretical

Background

Theoretical and onceptual

Research

Related to

the O rganization ofMarketing

In the 1980s, several conceptual and theoretical papers (see

Table 1) focused on the factors affecting marketing's inter-

action with other functional groups (Gupta. Raj, and Wile-

mon 1986; W ind 1981) as well as those affecting its role in

specific contexts, such as strategic planning (Anderson

1982; Hutt and Speh 1984). In column 3 of Table 1, we in-

dicate whether each study uses the functional group per-

spective of marketing, the activity-based perspective of

marketing, or is integrative. addressing both issues. Perhaps

the most widely cited article on marketing's role is Ander-

son's (1982). In this article. Anderson draws on Pfeffer and

Salancik's (1978) resource dependence theory and argues

for a "constituency-based theory of the firm" in which the

relative influence of marketing in strategic planning is based

on the importance of the resources it contributes. Anderson

argues that "the chief responsibility of the marketing area is

to satisfy the long-term needs of its customer coalition" (p.

22) and stales that "marketing's role in strategic planning

must be that of a strong advocate for the marketing con cept"

(p . 24). Although Anderson's article has had a significant

theoretical impact in marketing, there has been little effort to

develop measures of marketing's power on various issues in

organizations. In addition. Anderson makes no distinction

between marketing and sales.

More recently, conceptual work has shifted from mar-

keting's role in a firm to its role in managing relationships

with external partners. Achrol (199 ) focuses on two

specif

ic organizational forms he labels "marketing exchange com-

pany" and "marketing coalition company" and argues that

these forms are more appropriate for turbulent environments

in which knowledge is dispersed across firms. Webster

(1992) em phasizes the role of marketing in managing strate-

gic partnerships, which allows for more flexibility and less

bureaucracy in the value chain from suppliers to customers.

Day (1994) also studies the value chain and focuses primar-

ily on the capabilities, rather than specific organizational

forms, of "market-driven finns."This shift from the study of

marketing in the firm to the study of marketing's role in

helping span the boundary between firms is partly the result

of the growing awareness of the importance of interfirm al-

liances and the rationalization of activities throughout the

value chain.

In reviewing the conceptual work on marketing organi-

zation, we find a great variety in the dependent variables

(see Table 1). This is partly due to the complexity ofth phe-

nomena; marketing organization encompasses many dimen-

sions, including structure (Weitz and Anderson 1981),

pow er (Hinings et al. 19 74; Pfeffer 1981), interaction s with

other groups (Walker and R uekert 1987; Wind 1981), and

bureaucratic dimensions, such as formality, centralization,

and standardization (Ruekert, Walker, and Roering 1985). In

addition, when companies design their marketing organiza-

tion, they tnust determine w hether a marketing group should

exist (Piercy 1985). the assignm ent of activities lo function-

al groups (Hutt and Speh 1984), the "locus of decision mak-

ing" (corporate versus divisional) for various decisions

(Varadarajan and Clark 1994). and which activities to per-

form internally versus externa lly (Achrol 1991 ; Day 1994;

Doyle 1995; Ruekett, Walker, and Roering 1985; Webster

1992). What has been missing from this conceptual work is

empirical support for the claims.

Field andSurvey Based Researchon the

Organization and Role of M arketing

In Table 2, we summarize key field studies that focus on

some dimension of marketing organization. Early re-

searchers on this topic typically conducted interviews with

sales, marketing, and general managers and described the

variations in how the marketing function was organized

(e.g.. Bund and Carroll 1957; Carson 1968; Lazo and Corbin

1968). Although this field research provides insight into

managerial practice, it has two key limitations. First, much

of the research is limited to large U.S. consumer goods

firms. Second, the research is primarily descriptive, with lit-

tle effort to link field observations to prior research or sys-

tematically relate organizational forms to contingency

variables. Thus, many of these studies have had limited the-

oretical impact because of their overemphasis on descrip-

tions of managerial practice and lack of systematic theory

development.

The most common empirical approach in the study of

marketing organization has been lo use a mail survey to test

a contingency theory of how a given organizational dimen-

sion w ill vary across a set of con ditions. In Table 3, we pre-

sent summaries of studies that use this approach. Three of

these studies focus on nonstructural dimensions, such as in-

teractions (Ruekert and W alker 1987), distinctive competen-

cies in marketing (C onant. M okwa, and Varadarajan 1990),

and power of brand managers (Starr and Bloom 1994),

whereas three focus on structural dimensions (Dastmalchian

and Boag 1990; Piercy 1986; Tull et al. 1991).

In relating dimensions of marketing organization to sit-

uational or environmental variables, we find substantial va-

riety among the studies in which independent variables are

related to which dependent variables. Two studies do not

test for any such association s beyo nd size (Piercy 1986; Tull

et al. 1991), and one focuses on the single contextual vari-

able of strategy (Co nant. Mo kw a. and Varadarajan 1990).

Summarizing the empirical work on marketing organization,

we find the same limitations we found in the conceptual


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workman 1998 marketing organization an integrative framework of dimensions and determinants

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