Conditions of departmental power: a strategic contingency exploration of marketing's customer-connecting role

Abstract

A marketing department's power is substantially driven by the resources and capabilities the department provides to the firm. Customer connection is critical to success, yet it has seen equivocal results as a source of power. This study explores contextual circumstances and their influence on the functioning of power sources like customer connection. Combining resource dependence theory and strategic contingency theory, we argue that, while marketing power depends on power sources, the strength of this relationship is affected by context factors. Following a framework from Yan and Gray (2001), we test six context variables that affect the availability of alternatives and the strategic importance of customer connection. An analysis of 257 German firms reveals that selection & training and environmental dynamism positively affect customer connection, and market orientation and asset specificity negatively affect customer connection. Differentiation strategy and political skill show no effect.

Keywords:

• department power
• environmental context
• customer connection
• marketing
• strategic contingency theory
• resource dependence theory

Notes

1. Out of 332 total answers, we dropped 49 cases because of size constraints or missing values. Missing values in the remaining cases were negligible ( < 1% of items per survey), so we inferred that values were missing at random and used the EM-algorithm in SPSS 19.0 to impute them. Another 26 cases were dropped because of additional informant criteria applied to prevent informant bias. A sample of 257 firms remained for analysis.

2. Two scale items were dropped because their reference to production facilities did not suit our analysis.