Reports

Working Paper

Marketing’s Influence within the Firm

Christian Homburg, John P. Workman, Jr., and Harley Krohmer, 1998, 98-126

Although marketing's changing role within the firm has been the subject of much discussion, there is little empirical research to measure the influence of marketing or to describe the situational or environmental factors that may lead to variations in marketing's role. Prior research has primarily been conceptual and has tended to examine marketing's role in specific contexts such as new product development, strategic planning, or advertising budgeting.

In this report, authors Homburg, Workman, and Krohmer investigate marketing's level of influence and address the question: Under what circumstances does the marketing sub-unit have higher levels of influence?

In a survey of marketing managers in strategic business units in U.S. and German companies in three industry sectors, the influence of marketing was rated in relation to sales, R&D, manufacturing, and finance/accounting. Results indicate that:

  • The marketing sub-unit has substantial influence within the firm, with the most influence over decisions on advertising messages, procedures for measuring customer satisfaction, and programs for improving customer satisfaction. Marketing is also rated the most influential unit with respect to decisions on the strategic direction of the business unit.
  • The level of marketing's influence is systematically affected by determinants (such as percentage of direct sales) not related to individual managers' characteristics.
  • Institutional factors account for variance not explained by determinants more commonly used in contingency theories in marketing. This suggests that the dispersion of influence within an organization is not only the result of adaptation to environmental conditions but also a result of unique historical aspects that become institutionalized within the firm.

Managerial Implications

Knowledge of intraorganizational influence is important. Effective change management requires the support of influential actors within the organization; as marketing and sales sub-units are shown to be highly influential, successful change management requires the support of those groups.

In addition, managers must be sensitive to intraorganizational influence as a potential barrier to organizational change. These results show that the present organizational form may not be the result of rational adaptation to market forces, but may be due to cultural and institutional factors, resulting in less optimal outcomes.

Finally, the constant sum instrument developed in this study can be used by managers to diagnose the patterns of influence within their business unit. Such measurement may be important in planning and implementing strategy change.

Christian Homburg is Professor of Business Administration and Marketing and Chair, Marketing Department, University of Mannheim, Germany. John P. Workman, Jr. is Associate Professor of Marketing, Creighton University. Harley Krohmer is a Ph.D. student, University of Mannheim.

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