The power of marketing within the firm: Its contribution to business performance and the effect of power asymmetry

Seigyoung Auh, Omar Merlo

Research output: Contribution to journalArticle

21 Scopus citations

Abstract

While marketing continues to gain prominence as an orientation within the firm, concerns remain about the contributions of the marketing subunit. Given the current limited and conflicting evidence on the issue, this study responds to calls for research on the link between a powerful marketing subunit and business performance. The study draws on the critical contingencies perspective on power, which was specifically developed to study power distribution among organizational subunits. The key objectives of the study are (1) to determine whether a powerful marketing department is beneficial to business performance, (2) to reconcile conflicting evidence pertaining to the marketing function's contribution to performance beyond that of a market orientation, and (3) to investigate the effect on business performance of power asymmetry between marketing and other functions. Employing data from senior managers in medium and large manufacturing firms, the study shows that a powerful marketing function is associated with improved business performance above and beyond the contribution of a market orientation. Power asymmetry between marketing and finance/accounting and between marketing and production has a negative effect on business performance while a power asymmetry between marketing and R&D shows a positive effect on business performance. Finally, a differentiation strategy attenuates the negative performance outcomes of power asymmetry between marketing and production.

Original languageEnglish (US)
Pages (from-to)861-873
Number of pages13
JournalIndustrial Marketing Management
Volume41
Issue number5
DOIs
StatePublished - Jul 1 2012

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Keywords

  • Influence
  • Market orientation
  • Marketing function
  • Marketing subunit
  • Power asymmetry

ASJC Scopus subject areas

  • Marketing

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