Douglas W. Vorhies

A Configuration Theory Assessment of Marketing Organization Fit with Business Strategy and Its Relationship with Marketing Performance

Theory posits that organizing marketing activities in ways that fit the implementation requirements of a businesss strategy enhances performance. However, conceptual and methodological problems make it difficult to empirically assess this proposition in the holistic way that it is theoretically framed. Drawing on configuration theory approaches in management, the authors address these problems by assessing marketing organization fit with business strategy as the degree to which a businesss marketing organization differs from that of an empirically derived ideal profile that achieves superior performance by arranging marketing activities in a way that enables the implementation of a given strategy type. The authors suggest that marketing organization fit with strategic type is associated with marketing effectiveness in prospector, defender, and analyzer strategic types and with marketing efficiency in prospector and defender strategic types. The study demonstrates the utility of profile deviation approaches for strategic marketing theory development and testing.

The capabilities and performance advantages of market‐driven firms

Although progress has been made in understanding market‐driven businesses from a theoretical perspective, relatively few empirical studies have addressed the capabilities needed to become market‐driven and the performance advantages accruing to firms possessing these capabilities. One of the barriers faced has been in defining what is meant by the term “market‐driven”. Develops a multi‐dimensional measure useful for assessing the degree to which a firm is market‐driven. Presents evidence that market‐driven business units developed higher levels of six vital marketing capabilities (in the areas of market research, pricing, product development, channels, promotion, and market management) than their less market‐driven rivals and significantly outperformed these rival business units on four measures of organizational performance.

The Capabilities and Perfor Mance Advantages of Market†Driven Firms: An Empirical Investigation

Although progress has been made in understanding the development of businesses competencies from a theoretical perspective, relatively few empirical studies have addressed the capabilities needed to become market‐driven and the perfor Mance advantages accruing to firms possessing these capabilities. One of the barriers faced has been in defining what is meant by the term ‘market‐driven’. This study develops a multi‐dimensional measure useful for assessing the degree to which a firm is market‐driven. Evidence is presented in this study that strategically focused market‐driven business units developed higher levels of capabilities than their less market‐driven rivals and significantly outperfor Med these rival business units on four measures of organisational perfor Mance.

An investigation of the factors leading to the development of marketing capabilities and organizational effectiveness

To achieve a competitive advantage, businesses are often advised to develop capabilities in key functional areas. This study investigates the factors that influence marketing capabilities development and what effect these capabilities have on organizational effectiveness. In this study of the largest strategic business units (SBUs) of Fortune 500 companies, business strategy, organizational structure and market information processing capabilities were found to influence marketing capabilities development. Of equal importance, the SBUs with the highest degree of marketing capabilities development outperformed SBUs with less-developed marketing capabilities.

The Business Performance Outcomes of Market Orientation Culture and Behaviors

Abstract Purpose The marketing literature indicates that a firm’s organizational culture plays a critical role in determining its market orientation (MO) and thereby the firm’s ability to successfully adapt to its environment to achieve superior business performance. However, our understanding of the organizational culture of market-oriented firms and its relationship with business performance remains limited in a number of important ways. Drawing on the behavioral theory of the firm and the competing values theory perspective on organizational culture, our empirical study addresses important knowledge gaps concerning the relationship between firm MO culture, MO behaviors, innovation, customer satisfaction, and business performance. Methodology/approach We used a survey methodology with Clan Cultural Orientation, Adhocracy Cultural Orientation, Market Cultural Orientation, and Hierarchy Cultural Orientation Clan. Market Orientation Behaviors, Innovation, and Customer Satisfaction and CFROA t (Net Operating Income + Depreciation and Amortization – Disposal of Assets)/Total Assets. Findings The overall fit of the first Confirmatory Factor Analysis (CFA) containing the three MO behavior sub-scales, the four organizational culture scales, and the innovation and satisfaction performance measures was good with a χ 2 = 760.89, 524 df, p < 0.001; CFI = 0.916 and RMSEA = 0.055. The overall fit of the second CFA containing the business strategy, bureaucracy, and customer expectations control variables was also good with a χ 2 = 243.26, 156 df, p < 0.001; CFI = 0.937 and RMSEA = 0.061. We also subsequently ran a third CFA in which the MO behavior construct was modeled as a second-order factor comprising the three first-order sub-scales (generation of market intelligence, dissemination of market intelligence, and responsiveness to market intelligence) each of which in turn arose from the relevant survey indicants. This measurement model also fit well with the data with a χ 2 = 84.06, 63 df, p < 0.039; CFI = 0.955 and RMSEA = 0.047. Regressions using seemingly unrelated regressions (SUR) with control variables and with R 2 values ranging from 0.28 to 0.54. Practical implications MO culture has an important direct effect on firms’ financial performance as well as an indirect effect via MO behaviors and innovations. Importantly, our findings suggest that MO culture facilitates value-creating behaviors above and beyond those identified in the marketing literature as MO behaviors. In contrast to a series of studies by Deshpande and colleagues (1993, 1999, 2000, 2004), our empirical results suggest the value of the internally oriented Clan and to a lesser degree Hierarchy cultural orientations as well as the more externally oriented Adhocracy and Market cultural orientations. The benchmark ideal MO culture profile we identify is consistent with organization theory conceptualizations of strong balanced organizational cultures in which each of the four competing values orientations is simultaneously exhibited to a significant degree (e.g., Cameron & Freeman, 1991). Our findings indicate that the organizational culture domain of MO appears to be at least as important (if not more so) in explaining firm performance and suggest that researchers need to re-visit the conceptualization, and perhaps more importantly the operationalization, of MO as a central construct in strategic marketing thought. Originality/value In building an MO culture, an important first step is to assess the firm’s existing organizational culture profile (e.g., Goodman, Zammuto, & Gifford, 2001). Organization theory researchers have developed competing values theory-based organizational culture assessment tools that can provide managers with an easily accessible mechanism for accomplishing this (Cameron & Quinn, 1999). The profile of the firm’s existing culture and the profile of the ideal culture for MO from our study can then be plotted on a “spider’s web” graphical representation (e.g., Hooijberg & Petrock, 1993). This aids the comparison of the firm’s existing cultural profile with the ideal MO profile, enabling managers to easily diagnose the areas, direction, and magnitude MO culture profile “gaps” in their firm (Cameron, 1997). Specific gap-closing plans and tactics for gaps on each of the four cultural orientations can then be identified as part of the development of a change management program designed to create an MO culture profile (e.g., Chang & Wiebe, 1996). Cameron and Quinn’s (1999) workbook provides managers with an excellent operational resource for planning and undertaking such gap-closing organizational culture change initiatives.

Development of a Multi-Attribute Scale for Assessing Marketing Effectiveness

In the Miles and Snow typology (1978), three successful strategic orientations, the Prospector, Defender, and Analyzer are hypothesized to outperform firms without a strategic orientation (the Reactor). Adoption of a strategic orientation sets the overall direction for determining how a business will compete. Functional units respond to the direction set in the business strategy. For the marketing organization, this set of responses focuses on developing the product-market domain (Miles and Snow 1978). To successfully develop selected product markets, the development of distinctive competencies in areas such as product development, pricing, service, distribution, and promotion are needed to achieve the strategic goals of the organization (Walker and Ruekert 1987).