Chap 014

CRAVENS PIERCY

8/e McGraw-Hill/Irwin

© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Chapter Fourteen Designing Market-Driven Organizations

McGraw-Hill/Irwin

© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Designing MarketDriven Organizations Considerations in organizational design Organizational design options Selecting an organizational design Global dimensions of organizations

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Considerations in Marketing Organization Matching structure to strategic goals Extent of need to alter vertical structures CONSIDERATIONS IN ORGANIZATION DESIGN

Extent of processtype organizational design Extent of partnering with other organizations Need to integrate value-creating activities around customers Impact of Internet on organizational processes

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Alternative Organizational Structures Traditional Hierarchy

Process Overlay

Functional Structure

Process Structure Functional Overlay

Horizontal Structure

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The Challenge of Integration Integration problems Marketing’s links to other functional units Additional approaches to effective integration – – – – – –

relocation/design of facilities personnel movement reward systems formal procedures social orientation project budgeting

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Illustrative Example: Johnson Controls 

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Executives from marketing and sales meet frequently, collaborate on promotions, take training courses together, make sales calls together, share information freely Customer visits often involve executives from sales, marketing, engineering and design working togther Johnson’s teamwork philosophy extends to alliances and underpins its product development strategy

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Illustrative Example: GE’s Philosophy “One clear message in our approach is the value of the borderless culture which breaks down the horizontal barriers between functions and the vertical barriers between organizational levels. This means that employees are encouraged to collaborate with others and given considerable freedom to turn their creativity into productivity.” Source: Robert Nardelli, GE, 1993

Impact of the Internet on Organization 14-9

New managerial roles and practices are mandated by the Web – – –

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fast access to information from any location and remotely accelerated trend towards flatter organizations virtual team-working across geographical and organizational boundaries new approaches to supplier relationship management (SRM) and customer relationship management (CRM) managing and controlling outsourcing of more business processes and activities to specialist suppliers

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Organizational Design Options Traditional designs Marketing’s corporate role New forms of marketing organizations

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Traditional Marketing Organization Designs

Functional

Matrix

TRADITIONAL DESIGNS

MarketFocused

ProductFocused

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Product-Focused Structure

Marketing Organization Based on a Combination of Functions and Products

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Organizational Transformation

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Hybrid organization forms Designs linked to value strategy and core capabilities Vital role of data networks Shared information and decision making

Source: George S. Day, “Aligning the Organization to the Market,” in Reflections on the Future of Marketing, Donald R. Lehmann and Katherine E. Jocz, eds. Cambridge, MA: Marketing Science Institute, 1997, 67-93.

New Forms of Marketing Organization New marketing roles –

Chief relationship officer, chief knowledge office, chief customer officer

Transforming vertical organizations through managing processes New organizational forms – – –

networked organizations the marketing coalition company venture marketing organizations

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The Marketing Coalition Company

Source: Ravi S Achrol, “Evolution of the Marketing Organization: New Forms for Turbulent Environments”, Journal of Marketing, October 1991, 88.

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Selecting an Organization Design Organizing concepts Organizing the sales force

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Organizing Concepts Centralized Formalized Nonspecialized

BUREAUCRATIC

TRANSACTIONAL

Internal (hierarchical) Organization of Activity

External (market) Organization of Activity

ORGANIC

RELATIONAL

Decentralized Nonformalized Specialized

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Organizing the Sales Force Organizing multiple sales channels – – – –

personal selling Internet-based channels telesales direct marketing

Coordinating major account responsibilities – –

Key account management Global account management

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Global Dimensions of Organizations Issues in organizing global marketing strategies – Variations in business functions – Organizational considerations

Coordination and communication – Strategic alliances – Executive qualifications

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Marketing Organization Plan Combining Product, Geographic, and Functional Features

Source: Philip B Cateora and John L Graham, International Marketing, 12th ed. (Burr Ridge, IL: McGraw-Hill/Irwin, 2005), 336.

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Global Marketing Organization

Executive Qualifications

Standardized Versus Customized Strategies

Alternative Organization Forms

GLOBAL ORGANIZING ISSUES Strategic Alliances

Coordination and Communication