The Influence of Marketing from a Power Perspective

Omar Merlo

Imperial College Business School

Imperial College London
South Kensington Campus
London SW7 2AZ
United Kingdom
Email: o.merlo@jbs.cam.ac.uk

Dr Merlo is Lecturer in Marketing at Imperial College Business School. From 2005 till 2010 he was
Lecturer in Marketing at the Judge Business School, University of Cambridge, and prior to that he
was at the University of Melbourne. He has also held visiting Professor positions at the University of
Lugano, the Helsinki School of Economics and Yonsei Graduate School of Management among
others. Dr Merlo was awarded his Ph.D. in Marketing Strategy from the University of Melbourne. His
main research interests include marketing’s role and organisation, the use of power and politics to
understand marketing phenomena, marketing-related decision making, and services marketing. Dr
Merlo has won several awards and grants for his research, including an American Marketing
Association Best Paper Award and a European Union Award for Excellence. Dr Merlo is active in
consulting and executive education, having worked with numerous clients in both the private and
public sectors. Dr Merlo also sits on the advisory board of a number of Cambridge start-up
companies, and was previously Senior Associate of Chant Link & Associates, a specialist marketing
strategy and research consulting company.
 The Influence of Marketing from a Power Perspective

Introduction

The role and influence of marketing subunits within organizations has attracted an increasing
amount of academic attention in recent years (e.g., Homburg et al., 1999, Verhoef and Leeflang,
2009, Moorman and Rust, 1999). Leading marketing journals have published special issues on the
topic, with marketing scholars debating the past, present and future of marketing (e.g., Brown, 2005,
Webster, 2005, Sheth and Sisodia, 2005). Making marketing more relevant has crossed disciplinary
boundaries and has increasingly been the focus of the strategic and management literature (e.g.,
Cassidy, 2005, McGovern and Quelch, 2004). All this attention is partly due to evidence that an
influential marketing department can have beneficial effects on decision-making and business
profitability. A strong marketing department has been linked to superior business performance
beyond the contribution of a market orientation (Merlo and Auh, 2009, Moorman and Rust, 1999)
and can drive effective strategic decision-making (Homburg et al., 1999). The influence of marketing
within organizations is also a timely and important research area, given that many marketing scholars
have sent warning signals about the level of its influence within firms (e.g., Holbrook and Hulbert,
2002, Webster, 2005, Brown, 1995)

Despite the importance of the issue, our understanding of the determinants of marketing’s
influence is still in its infancy. Homburg et al. (1999) provided a first important step towards
identifying the circumstances under which marketing has higher levels of influence. Their study was
concerned with contingency factors alone, and therefore did not address individual or group
determinants such as power. But because an actor’s influence may be affected not only by
contingency factors, but also by actor-specific attributes, such as its power sources (House, 1988),
the work of Homburg and colleagues should be complemented with an analysis of marketing’s
sources of power. The recent study by Verhoef and Leeflang (2009) has greatly enriched our
understanding of the determinants of marketing’s influence with regard to firm and departmental
characteristics, but does not deal with power sources as determinants of influence. This paper aims to
fill these gaps, and by doing so, extends research on marketing’s influence within the firm in an
important direction. The key objective of this paper is to develop a more comprehensive appreciation
of marketing’s influence within the firm by complementing our understanding of situational
determinants and firm and departmental characteristics with an analysis of marketing’s sources of
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power. In fact, social scientists have long argued that power is a key precursor of influence (e.g.,
Emerson, 1962, Pfeffer, 1992), and the assumption that influence is exercised power is not new to
the marketing discipline (e.g., Homburg et al., 1999). Understanding what power sources a
marketing subunit can leverage to maintain or strengthen its influence within the firm is a crucial and
timely objective, particularly in light of empirical evidence supporting a “weakened position of the
marketing department,” and the need for “marketing departments … to regain their influence”
(Verhoef and Leeflang, 2009, p.29).

Power theory provides a useful theoretical foundation for analysing the influence of the
marketing subunit. Yet the application of power theory to studies of interfunctional influence
remains limited, if not nonexistent, within the marketing literature. Social scientists have focused on
a variety of dimensions and sources of power, breaking down the concept in a multiplicity of ways
and focusing, for example, on its sources (e.g., Astley and Sachdeva, 1984), bases (e.g., French and
Raven, 1959), types (Olsen, 1978), and dimensions (e.g., Finkelstein, 1992). Merlo et al. (2004)
claim that this fragmentation and lack of convergence have limited the application of power theory in
marketing. They therefore provide an integrative categorization of the main schools of thought in
power research that can be useful to marketing research. This paper draws on that categorization to
provide an analysis of the determinants of marketing’s influence that measures power from an
integrated, multifaceted perspective.

The Influence of Marketing

This study is concerned with marketing’s influence as a distinct department, where influence
is seen as the marketing function’s ability to persuade others to develop, shape and implement
strategies based on its advice. Specifically, marketing’s influence is defined as the impact of the
marketing function, relative to other functions, on the strategic direction of the business unit. This
definition is consistent with prior conceptualizations in the marketing literature (Homburg et al.,
1999).

The first research within the marketing literature to deal directly with issues of marketing’s
relative influence within organizations was Anderson’s (1982) study, which investigated the role of
marketing in strategy development. Anderson argued that marketing’s relative degree of influence on
strategic planning is a function of the relative importance of the resources that it contributes to the

2
firm. Since then, a number of other scholars have focused on the role of marketing in contexts such
as strategy development and planning (e.g., Walker and Ruekert, 1987), the interaction of marketing
with other functions (Ruekert and Walker, 1987), the role of marketing in product development (e.g.,
Workman, 1993), and the determinants of board membership of marketing managers (e.g., Bennett,
2009).

In their study, Homburg et al. (1999) found that external contingency factors (e.g., frequency
and unpredictability of market-related changes), institutional determinants (e.g., CEO background
and societal views of marketing), and competitive strategies account for variance in marketing’s
level of influence. Moorman and Rust (1999) found that marketing’s value is determined by the
management of several important connections between the customer and firm elements. More
recently, Verhoef and Leeflang (2009) provided a comprehensive analysis of the determinants of
marketing’s influence, by focusing on marketing department capabilities. Their study shows that
marketing-related factors (such as accountability and innovativeness) are responsible for variations
in marketing’s influence above and beyond contingency and institutionalized factors. Thus, Verhoef
and Leeflang’s (2009) study suggests that investigations of marketing’s influence within the firm
should also focus on marketing department-specific factors. This paper aims to build on this body of
literature on marketing’s influence, as well as expand on it, because an actor’s influence is affected
not only by situational contingencies, but also by actor-specific attributes (House, 1988), and
specifically the use of power.

Power as a Determinant of Marketing’s Influence

Power may be defined as the capacity of one actor to make another do something that the
other would not otherwise do, and most characterisations of power are reasonably consistent with
this definition (e.g., Gaski, 1984). Merlo et al. (2004) identify four main perspectives on power –
bureaucratic, critical contingencies, network and psychological – and argue that each of these may be
useful for studying marketing phenomena, particularly the influence of marketing within
organizations.
The bureaucratic perspective sees power as formal and structural, and primarily exercised in a
vertical manner through authority and legitimacy. Bureaucratic power often emerges from the
hierarchical position of an actor or group (Pfeffer, 1981). In contrast, the critical contingencies

3
perspective sees power as emerging from two sources: the ability of a function to cope with
uncertainty and the extent to which its activities cannot be easily substituted (Hinings et al., 1974,
Lachman, 1989). The network perspective reflects the extent to which a function holds a central
position within the workflow of activities of a firm (e.g., Tichy et al., 1979). Finally, the
psychological perspective sees power as the product of psychological and social processes that
characterise the relations between organizational actors (Merlo et al., 2004).
Numerous scholars have expressed the view that power is a determinant of influence, or,
from a different angle, that influence is exercised power (e.g., Emerson, 1962, Homburg et al., 1999).
Accordingly, a key premise of this study is that the bureaucratic, critical contingencies, network and
psychological sources of power act as important antecedents of marketing’s relative influence within
organizations. The next section elaborates on this rationale and outlines the hypothesized model and
research hypotheses.

Research Hypotheses

Figure 1 depicts the hypothesized model, which predicts that marketing can draw on different
types of power to exercise influence within the firm. In order to account for the impact of the
external environment on this process, the model also considers the direct effect of market turbulence
on marketing’s influence and its moderating role on the power-influence relationships. The
individual hypotheses are discussed in turn.

---- Insert Figure 1 Here ----

According to the bureaucratic perspective, power is inherent in the bureaucracy, in

procedures, and in accepted routines (Pfeffer, 1981). It is impersonal, as it is based on legitimate
claims associated with positions, rather than people (Enz, 1986). Hierarchical authority is at the heart
of the bureaucratic perspective of power, which stems from the official position of an actor within
the organization. French and Raven’s (1959) power bases have been strongly influenced by a
bureaucratic perspective.
When considering bureaucratic power in the context of the marketing subunit, we can focus
on the degree to which marketing is represented in the high echelons of the organization.
Bureaucratic power originates from the right of an actor to exercise power by virtue of his or her

4
hierarchical position. As Astley and Sachdeva (1984, p. 106) observe, “[the] superior’s right to issue
commands is enacted by a legitimized procedure that is considered by both superior and subordinate
as correct.” It follows that the marketing subunit will be able to exercise influence on other subunits
by exerting leverage on two kinds of resources: marketing can increase influence through the
perceived legitimacy created by its level of representation within the hierarchical structure of the
organization, or because it is perceived as “having the right” to do so (i.e., it is legitimate).
The background of the CEO may be seen as a manifestation of the bureaucratic power of
marketing. If the CEO’s background is in marketing, the marketing function has a strong advocate in
the high echelons of the organization, and hence benefits from perceptions of legitimacy among
other functions. There is theoretical and empirical support for the view that the presence of a CEO
with a marketing background is associated with a higher level of marketing influence within the firm
(Homburg et al., 1999, Verhoef and Leeflang, 2009). From a power theory angle, such benefits may
be explained in terms of marketing’s ability to exercise influence by leveraging the bureaucratic
power associated with its representation in the higher levels of the organizational hierarchy.
Moreover, while marketing’s bureaucratic power may be relatively visible and explicit, such as when
the CEO has emerged from the marketing function, it can also take a more subtle and indirect form.
For example, a high incidence of formal training and education in marketing in the higher councils of
business is another means through which marketing may enjoy more legitimacy within the firm.
Such structural advantage may be associated with an improved understanding of marketing activities,
and support for them, which in turn is associated with heightened influence.
Based on these considerations, it is hypothesized that:

H1: The higher the degree of marketing’s bureaucratic power, the higher the degree of

marketing’s relative influence within the firm.

The critical contingencies view encompasses the strategic contingencies and resource
dependence views (Enz, 1986). The strategic contingencies view suggests that coping with
uncertainty, substitutability and centrality are key determinants of power. The resource dependence
view of power (Salancik and Pfeffer, 1974a), argues that the distribution of power among subunits
within organizations is determined by the subunits’ ability to provide critical and important
resources. Thus, the critical contingencies view distances itself from the bureaucratic perspective’s

5
vertical and interpersonal view of power, and sees factors such as uncertainty, substitutability,
centrality, and the control of scarce and valued resources as key variables (Enz, 1986).
This view suggests that if marketing is seen as effective in coping with uncertainty (for
example by acting as the key boundary-spanning unit between the firm and the external
environment), and if its contributions are perceived to be unique (for example because no other
functions, organizational actors, or contractors are easily available to carry out marketing’s activities
in its place), the dependencies created would suggest that marketing is in a better position to exercise
influence within the organization. To some extent, its ability to cope with uncertainty makes
marketing the “provider of certainty” to other functions, thus increasing its influence.
In light of these considerations, it is hypothesized that:

H2: The higher the degree of marketing’s critical contingencies power, the higher the degree of

marketing’s relative influence within the firm.

The third type of power, the network perspective, explains power in terms of an actor’s
centrality within a network of workflow relations (e.g., Tichy and Fombrun, 1979). The division of a
firm’s work among hierarchical positions, subunits, or even cross-functional teams creates an
interactive network in which those who are more interconnected tend to enjoy more power by virtue
of their increased control over task flows, social interactions or communication networks (Lachman,
1989). Actors located at key interconnected nodes in the network obtain power because of their
central location, and their role as integrators of the functional contribution of those not directly
interconnected (e.g., Astley and Sachdeva, 1984).
The network approach, therefore, highlights not the marketing function’s position within an
organization’s vertical structure, but rather marketing’s role as a linchpin for network interactions.
This perspective highlights the key determinants of marketing’s influence within the firm as, first,
the importance of marketing’s centrality within the firm’s workflow of activities, and second, the
extent to which it acts as a conduit for communication with key organizational actors. Marketing’s
influence is strengthened when marketing is perceived to occupy a central position within the
network of workflow relations and when it has access to effective and efficient communication
channels with other actors located at key interconnected nodes. Marketing can accrue and exercise
influence through network power because of two primary benefits: first, effective channels of

6
communications are established with key strategic decision makers within the organization; and
second, marketing can act as the conduit between functions and actors that are not directly
interconnected.
These arguments suggest that the following prediction can be made:

H3: The higher the degree of marketing’s network power, the higher the degree of marketing’s

relative influence within the firm.

The fourth perspective, the psychological perspective, posits that power is a product of
individual psychological and social processes that characterize relations between people within the
organization. The rationale is that actors have different characteristics, skills and abilities, and vary
in their propensity to use these skills and abilities (Brass and Burkhardt, 1993). Research has
uncovered a variety of sources of power that may be used to influence decision-making within the
organization, such as reputation, credibility, stature, ingratiation and upward appeal (e.g., Salancik
and Pfeffer, 1974b). Crucial to one’s ability to influence others is the extent to which knowledge is
trusted and deemed relevant. Knowledge must be perceived as valuable if it is to be a source of
power. This is partly a function of time, and most importantly, the ability of the subunit to build a
good image and reputation within the firm.
The psychological perspective, therefore, emphasizes the importance of marketing’s image as
a provider of important advice within the firm, and its reputation among organizational actors. A
direct link between marketing’s image or reputation and its level of influence within the firm is
expressed, both explicitly and implicitly, by a growing body of literature concerned with marketing’s
influence. Such literature suggests, for example, that marketing’s influence may be partly determined
by its reputation as a key strategic force within the firm (e.g., Webster, 1997). When marketing’s
knowledge is perceived to be clear and valuable, and hence certain psychological and social
processes ensure that marketing acquires a good reputation, its influence within the firm is expected
to be stronger.
Thus, the following hypothesis is advanced:

H4: The higher the degree of marketing’s psychological power, the higher the degree of

marketing’s relative influence within the firm.

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 While the development and use of power is predominantly an internal process, external
factors also affect marketing’s level of influence within the firm and the extent to which marketing
can translate its power into exercised influence. In particular, the effect of market turbulence, or the
rate of change in the composition of customers and their preferences (Jaworski and Kohli, 1993),
plays a critical role. Businesses operating in turbulent markets are expected to have more influential
marketing departments, as customer preferences fluctuate to a greater extent, and need to be
monitored and measured constantly. It might be expected that the processes of market and customer
analysis carried out by marketing will be relied on more heavily in turbulent markets (Jaworski and
Kohli, 1993).
Considerable theoretical and empirical support exists for the view that market-related
turbulence may be positively associated with marketing’s level of influence. For example, Homburg
et al. (1999) argue that when market-related uncertainty is high, marketing makes a more significant
strategic contribution to the organization, as there is greater need to gather and process market-
related information. Given that higher contribution value is associated with increased influence
(Anderson, 1982, Pfeffer, 1981), marketing may derive more influence under conditions of high
market turbulence. And indeed, Homburg et al. (1999) provide empirical support for the view that
frequency of major market-related changes, a key component of market turbulence, is positively
associated with the level of influence of the marketing function.
In light of these considerations, the following hypothesis may be derived:

H5: The higher the degree of market turbulence, the higher the degree of marketing’s relative

influence within the firm.

Furthermore, as Jaworski and Kohli (1993) observe, businesses operating in turbulent

markets need to make more effort to identify and respond to changing customer preferences. As
these are some of the key responsibilities of marketing departments, we would expect marketing to
be in a position to leverage its power sources to a larger extent in situations of high market
turbulence. Under conditions of high external uncertainty, project managers may be uncertain about
the development of new products, lacking sufficient information to predict customer demand and
preferences (Milliken, 1987). It will become more critical for marketing to draw on its critical

8
contingencies power to deal with uncertainty in the market, leverage its network power and presence
within the organizational hierarchy to share information with key decision makers, and elicit positive
responses from other organizational actors through its psychological power.
This argument reflects the view that marketing, in its capacity as a strategic boundary-
spanning function, may derive influence by being considered an expert in dealing with turbulent
markets. The importance of marketing’s ability to cope with uncertainty, to act as a conduit for
information, and to leverage its good image within the firm will vary according to the level of market
turbulence. For example, a turbulent market may require swiftness in decision-making. Under such
conditions the process through which key marketing decisions are made becomes less important than
the ability to deploy resources promptly and effectively. Such decisions may therefore be made
based more on a function’s power rather than on professional considerations and formal practices.
Hence, the following predictions, which hypothesize a moderating role of market turbulence
on the power sources-influence relationship, may be made:

H6: The greater the market turbulence, the stronger the positive relationship between

marketing’s:

a) bureaucratic power and relative influence within the firm.

b) critical contingencies power and relative influence within the firm.

c) network power and relative influence within the firm.

d) psychological power and relative influence within the firm.

Three control variables were also included in the model. First, firm size can affect the amount of
resources that are made available to the marketing function, and therefore have an impact on
marketing’s influence within the firm. Thus, following the extant marketing literature (Homburg et
al., 1999, Verhoef and Leeflang, 2009), the size of the strategic business unit was included as a
control variable. Second, consistent with the view that “the resources provided by the marketing unit
would be considered important if the business unit strongly emphasized a differentiation strategy”
(Homburg et al., 1999, p. 5), the degree of reliance on a differentiation strategy was also included in
the model. Third, reflecting the view that marketing can exercise influence within the firm in at least
two fundamentally different ways, as a function or as an orientation (Moorman and Rust, 1999), the

9
degree of market orientation was also included in the model. Numerous scholars have suggested that
a market orientation facilitates the development of a “marketing-friendly” culture in which marketing
subunits may flourish (e.g., Merlo and Auh, 2009). Some evidence of a positive interaction between
market orientation and marketing subunit influence has been provided: Verhoef and Leeflang (2009)
report this correlation to be 0.30, while in Moorman and Rust’s (1999) study, marketing influence is
significantly correlated to six components of market orientation, with correlations ranging from
0.183 to 0.345.

Methodology

Sample and data collection procedure

The sample frame consisted of an Australian mailing list of a random selection of 600 contacts in
medium and large organizations (50 employees or more) in a variety of manufacturing industries.
The manufacturing sector was chosen primarily because it was sampled in similar studies, and
because it was the setting for which some of the key measures used in this study were developed
(Homburg et al., 1999). The unit of analysis was the strategic business unit (SBU). The study
employed self-administered survey questionnaires and a key informant methodology, requiring one
respondent from each SBU. Potential information bias and random error problems were minimized
in a number of ways. First, the respondents were selected based on a uniform managerial level.
Given the focus of the study, the most appropriate key informants were organizational members who
could provide valid retrospective data on the input and performance of members of different
functions. Because participants in a decision-making process tend to overstate their own influence
(e.g., Atuahene-Gima and Evangelista, 2000), key informants for this study were senior managers
(managing directors, CEOs, presidents, etc.), to whom staff from different areas within an SBU
would report. Respondents’ confidence was measured by asking them to assess the extent to which
they believed their knowledge and expertise had allowed them to complete the survey confidently,
using a seven-point Likert scale with response anchors “Not at all confident” and “Extremely
confident.” All questionnaires with a confidence score below 4 were eliminated (16 surveys). The
final mean of the confidence measure was 6.05; only four respondents had a score of 4 (and
eliminating these from the study did not affect the results). More than 80% of responses indicated a
value of 6 or 7. This suggests that the key informants were very competent and informed. Using only

10
key informants at senior managerial level with high levels of confidence in their responses is
consistent with guidelines for reducing common method bias (Rindfleisch et al., 2008).
The questionnaire underwent an extensive drafting process and two pre-tests with seven
academics and senior managers, primarily to simplify its layout and reduce the potential for
measurement errors. Before the survey package was mailed, key informants were contacted twice to
encourage participation. After two months, the data collection effort had yielded a total of 141
questionnaires. Three were eliminated because of too much missing information, and 16 were
discarded because of low confidence scores. The final sample consisted of 122 questionnaires,
representing a response rate of 23.3 percent, which, given the high seniority level of the respondents,
is quite acceptable. Absence of non-response bias was confirmed by comparing early and late
respondents on all dimensions (Armstrong and Overton, 1977).

Measures
The study employed new or adapted reflective and formative scales, drawing from the
marketing and power literatures.
(1) Marketing’s influence
Marketing subunit influence was operationalized following the lead of Homburg et al.
(1999), by multiplying the importance score given to each of 11 strategic factors (e.g., pricing,
distribution, major capital expenditures, strategic direction of the business, etc.) by the influence
scores allocated to marketing on each of the 11 dimensions. To correct for missing data, the result
was then divided by the number of areas for which answers were provided. This final number
reflects the extent to which marketing has influence on decisions that are important for the success of
the business unit.
(2) Bureaucratic power
Two components were employed to capture the bureaucratic source of power. First, the
background of the CEO, measured with a dummy variable where 1 indicates that the CEO’s
background is in marketing, and zero anything else. Second, bureaucratic power was captured by
asking respondent to indicate the hierarchical level at which people with marketing background and
training were found. The choices provided were “None,” “Frontline level,” “Middle management
level,” “Senior management level,” and “Board level.” Values ranging from zero to 4 were allocated
according to the response.
(3) Critical contingencies power

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 Critical contingencies power was conceptualized in terms of two elements: coping with
uncertainty and unsubstitutability. The procedure for measuring coping with uncertainty involved
four steps. First, based on Hinings et al. (1974), Lachman (1989) and Porter (1980), a set of key
strategic factors were derived, and a score was computed to measure their uncertainty and impact on
the success of the business. The second step involved measuring the extent to which different
subunits (marketing, sales, finance/accounting, production/manufacturing, R&D) dealt with
variations in the key strategic factors (see Lachman 1989). Third, a mean score of coping with
uncertainty was computed across all subunits. Finally, in order to capture the relative ability of
marketing to cope with uncertainty, the coping score of the marketing function was compared to the
mean score for all functions, and a dummy variable was allocated accordingly (a value of 1
indicating that marketing was better able to cope with uncertainty than the other subunits).
Unsubstitutability, the second element of the critical contingencies source of power, was
measured by drawing on the work of Hinings et al. (1974), and Lachman (1989). The construct is
composed of two descriptors: actual unsubstitutability (e.g., level of formal education and experience
required) and hypothetical unsubstitutability (e.g., the ease with which the work of a subunit could be
carried out by others internally or externally). Respondents were asked the extent to which they
agreed with the following statements, on a scale of 1 to 7: “Overall, the level of formal education,
experience and training required for the job, suggest that people responsible for this activity cannot
be easily found”; and “If you were to reorganize your company, it would be easy to transfer
responsibilities for this activity to existing employees in other functional areas, or externally by
hiring agents or consultants.” The questions were followed by the list of five subunits. The two
scores were combined to produce a final score on unsubstitutability. Then the mean subunit score on
unsubstitutability was calculated and compared to the score for marketing, and a dummy variable
allocated accordingly.
Network power
Network power was conceptualized in terms of marketing’s centrality of workflows and based on
whether or not there was a direct communication channel with the CEO.
Centrality of workflows was measured based on the work of Hinings et al. (1974), who argue
that centrality is composed of two distinct dimensions: immediacy and pervasiveness. Immediacy is
defined as the effect of a subunit’s activities on the organization’s output. It was measured by asking
respondents to estimate how quickly the firm’s ability to supply its customers would be affected if an
activity (e.g., finance, marketing, sales, etc.) could no longer be performed. A seven-point scale

12
from “Not for a very long time” to “Instantly” was employed. Pervasiveness refers to the extent to
which a subunit’s workflow is connected to the work of the other subunits. It was measured based on
the extent to which respondents agreed, on a seven-point scale, that those performing each activity
were interconnected with those performing the other activities. The score on pervasiveness and
immediacy were combined to yield a final score on centrality of workflows for each subunit. The
average score on centrality for all functions was calculated, marketing’s score was compared to the
mean, and a dummy variable allocate accordingly.
The second component of the network power construct was measured by asking respondents to
indicate whether the marketing manager reports directly to the CEO.
(4) Psychological power
The psychological source of power was conceptualized and measured in terms of personal
opinions of marketing as a reputable organizational function. A new four-item scale was developed
specifically for this study. Three items were grounded on the body of literature in marketing that
deals with perceptions of marketing’s reputation within the firm (Merlo et al., 2003) and tapped into
marketing’s reputation as a provider of critical strategic advice, as a good communicator, and for
being knowledgeable about the internal and external environment. A further item asked respondents
to reflect on the general reputation of marketing within their organization. Table 1 lists the items and
reliability test results for all the multiple-item scales.
(5) Other measures
Market turbulence refers to the extent to which the composition and preferences of a firm’s
customers tend to change over time, and was measured based on the multiple-item scale developed
by Kohli and Jaworski (1993). SBU size was measured as the log transformation of the number of
full-time employees in the strategic business unit. Differentiation strategy was measured using a six-
item scale based on Homburg et al. (1999). Market orientation was measured based on Narver and
Slater (1990), as the average of a firm’s score on the three dimensions: customer orientation,
competitor orientation, and interfunctional coordination (Slater and Narver, 1994). Cronbach alphas
for the multiple item scales are set out in Table 1.

Analysis and Results

The validity, unidimensionality, and reliability of the reflective measures (market turbulence,
psychological power, differentiation and the three dimensions of market orientation) were assessed

13
by confirmatory factor analysis (CFA). CFA revealed that all factor loadings were greater than 0.4,
normalized residuals were less than 2.58, and modification indices were less than 3.84 (Gerbing and
Anderson, 1988). The five-factor model provided an acceptable fit to the data (χ2 (390) = 836.3, GFI =
0.91, TLI = 0.93, CFI = 0.94, RMSEA = 0.07). Reliability estimates for the multi-item constructs are
provided in Table 1. All factor loadings were statistically significant (t > 2.0) (Gerbing and
Anderson, 1988). In addition, with the exception of the value for the differentiation scale, the AVE
(average variance extracted) values were higher than 0.50 (Bagozzi and Yi, 1988). Consequently,
the convergent validity of the constructs was supported. Moreover, all the tests for discriminant
validity were supportive: no confidence intervals of correlations for the constructs included 1.0 (p <
0.05) (Anderson and Gerbing, 1988), and the square of the intercorrelations between two constructs
was less than the AVE estimates of the same constructs for all pairs of constructs (Fornell and
Larker, 1981). Discriminant validity was assessed by comparing the unconstrained model with the
constrained model in which the correlation between two constructs was set to 1. For every pair of
constructs, there was a significant chi-square difference, supporting discriminant validity.

---- Insert Table 1 Here ----

For formative measures, the precision with which the construct domains are established and
tapped provides the major validation tool. Diamantopoulos and Winklhofer’s (2001) rules were
observed in the formation of the power scales: content specification, indicator specification and
indicator collinearity. The content domains of the key constructs were specified carefully in the
measurement development process, and the items used as indicators covered the entire scope of the
latent variable as uncovered by the relevant power literature and empirically supported by it. Finally,
the absence of indicator multicollinearity was ascertained. Collinearity was tested by calculating the
variance inflation factor (VIF) for each of the regression coefficients. The VIF ranged from 1 to 1.27,
and thus well below the cut-off of 10 recommended by Neter et al. (1985).
Although common method bias may be a concern because data came from a single informant,
using senior informants with high levels of confidence reduces the likelihood of common method
bias (Rindfleisch et al., 2008). Rindfleisch and colleagues also suggest that common method bias can
be minimized by carefully designing survey instruments using heterogeneous measurement format
and scales. The heterogeneity of the measures employed in the survey instrument contributes to
reducing common method bias by disrupting consistency bias and increases validity.

14
 The model was tested using hierarchical ordinary least squares regression and was specified as
follows:

Marketing influence = α0 + β1 logSBUsize + β2 MO + β3 Differentiation + β4 BPwr + β5 CCPwr + β6

NPwr + β7 PPwr + β8 MktTurb + β9 (MktTurb * BPwr) + β10 (MktTurb * CCPwr) + β11 (MktTurb *
NPwr) + β12 (MktTurb * PPwr) + Ɛ1

Where:

MO = market orientation
BPwr = bureaucratic power
CCPwr = critical contingencies power
NPwr = network power
PPwr = psychological power
MktTurb = market turbulence

Table 2 shows that three of the study’s four hypotheses were confirmed. Marketing’s critical
contingencies power (b = 2.92), bureaucratic power (b = 3.17) and network power (b = 2.50) are
linked to marketing’s strategic influence. Although the relationship between psychological power
and influence was in the predicted direction, the effect was non-significant.

---- Insert Table 2 Here ----

To test for that possibility that some sources of marketing power may be more important than
others, a post-hoc analysis was carried out using the method recommended by Cohen et al. (2003).
The method recommends using the following formula to provide pairwise t-test comparisons among
the different power types:

t = Bx1-Bx2/(SEx12-SEx22)1/2 (df = n-2)

Two of the pairwise comparisons were significant at the p <0.001 level, namely the critical
contingencies versus psychological power test and the bureaucratic power versus psychological
power test (t = 0.10-0.22/(0.03-0.02)1/2 = -4.00, in both cases). These results suggest that, relative to

15
the other types of power, critical contingencies power and bureaucratic power are more important
drivers of influence than network and psychological power.
Overall, the results of this study indicate that to maintain or increase their influence on
strategy, marketing professionals can focus on developing and strengthening their power in a variety
of ways. With the exception of psychological power, all power types are associated with the level of
influence of the marketing function. Critical contingencies power is one of the two most important
determinants of marketing influence, and its importance varies according to different levels of
market turbulence. Bureaucratic power is the other main determinant of marketing subunit influence,
supporting the view that the higher the presence of marketing in the organizational structure, the
higher its influence relative to other functions. The results also suggest that turbulence as a source of
uncertainty is insufficient to ensure that marketing gains greater influence within the firm. Rather, it
is a subunit’s success in coping with that uncertainty that acts a source of influence.

Implications and Directions for Future Research

Theoretical Implications
The marketing function can leverage a set of sources of power in order to maintain or
increase its influence within the firm. The fact that bureaucratic power is a determinant of influence
while psychological power is not suggests that impersonal power sources associated with positions,
rather than people, are more important determinants of marketing subunit influence. This confirms
the pervasive role of hierarchical authority and its primacy over psychological factors. It also
highlights the importance of research investigating the means through which marketing can climb the
organizational hierarchy. One of such studies is Bennett’s (2009) investigation of the factors that
facilitate the progression of marketing executives to senior positions.
The importance of bureaucratic and strategic contingencies power suggests that marketing
subunits can acquire influence from structural and procedural advantages, but also by controlling
scarce and valued resources and creating dependencies as they become providers of “certainty” for
other subunits (Salancik and Pfeffer, 1974a, Emerson, 1962). The latter is especially important under
conditions of heightened market turbulence. An interesting question for future research is whether
marketing acquires influence first by coping successfully with uncertainty, becoming unsubstitutable,
and hence climbing up the organizational ranks; or if it first obtains representation in the high
echelons of the firm, and then from that advantaged position strengthens and demonstrates its ability
to cope with uncertainty.

16
 The non-significant link between psychological power and influence is another interesting
finding. It suggests that while sources of power like expertise, dealing with uncertainty,
connectedness and presence in the top echelons of the firm are important determinants of
marketing’s influence, personal feelings toward marketing and subjective evaluations of its image
are not as essential. Because psychological power can have an intrinsically dysfunctional element
(e.g., people can be influential simply because they are liked, regardless of their level of expertise)
the fact that no link is found between this type of power and influence is not altogether bad news. It
is also consistent with the argument made by Verhoef and Leeflang (2009) that marketing
departments can still earn influence despite negative institutional and contingency factors.
Interesting findings are also the confirmed interaction effect between strategic contingencies
power and market turbulence, and the lack of a direct effect of market turbulence on marketing
influence. Marketing derives much of its influence by being considered an “expert” in dealing with
market uncertainty, rather than an expert “no matter what.” Market turbulence by itself is not enough
to improve marketing’s influence. It is only when marketing copes effectively with that uncertainty
that it acquires influence. This suggests that marketing makes a more important strategic contribution
to the firm when there is a greater need to gather and analyze market-related information. And that
greater value of the contribution is associated with increased influence (see Anderson, 1982,
Homburg et al., 1999, Pfeffer, 1981).
The fact that no interaction was confirmed between market turbulence and the other three
types of power may explain, at least in part, why marketing jobs are often among the first to be cut
during times of heightened market turbulence. Under such conditions, marketing can gain influence
if it can clearly demonstrate that it can help weather the storm by managing uncertainty. But given
that resources allocated to the marketing function are often cut indiscriminately rather than carefully
in turbulent times (Quelch and Jocz, 2009), marketing is often left powerless and unable to cope with
the uncertainty. And given that none of the other power sources acquires more importance under
turbulent conditions, the influence of the marketing function is slowly eroded. Future research could
focus on understanding why network and bureaucratic power, although potentially valuable in highly
turbulent markets, cannot be leveraged to foster marketing’s influence under those conditions.
Managerial Implications
A key challenge is how to ensure that marketing becomes unsubstitutable. Perhaps marketing
can learn from the most unsubstitutable of the functions within the sample organizations, which
according to the survey results is R&D. The high unsubsitutability of R&D may originate from the

17
high level of formal education and experience required for R&D jobs, and the fact that R&D
activities may not be easily subcontracted. There is a concern that marketing activities, in contrast,
may be perceived as largely unscientific, carried out by people with unspecialized qualifications, the
performance of which could be easily obtained from the market. Testament to this is evidence that
job advertisements in marketing emphasize aspects such as qualifications, personal attributes or
experience, to a lesser extent than advertisements in other areas (Mathews and Redman, 1994).
Another way in which marketing subunits can improve their influence within organizations is
by focusing on their bureaucratic power, regardless of the level of market turbulence. This stresses
the need for marketing to be represented, directly or indirectly, in the high echelons of organizations.
This representation may take a number of forms, including a CEO with a marketing background or
formal training and education in marketing of high-level organizational members. If marketing
professionals themselves—as evidence seems to indicate (Webster et al., 2003)—cannot gain a seat
at the decision-makers’ table, at least we should ensure that those who are sitting at the table have
had some exposure to the latest marketing ideas and principles. Naturally, the challenge of
maximizing marketing’s influence within the firm also rests on marketing scholars, educational
institutions and executive education providers, who can ensure that more marketing training and
education is provided to senior management, specifically on how marketing can contribute to
strategy.
Marketing can also strengthen its influence by claiming a central location within the network
of workflow relations, and by establish effective channels of communications with key strategic
decision-makers. This suggests that marketing professionals should focus on developing and
strengthening their social capital and maintaining effective and efficient communication channels
with other actors located at key interconnected nodes. Marketers should treat their internal customers
as they would their external customers—striving to understand which are most profitable and justify
more effort. One of marketing’s priorities should be to identify other organizational actors and
functions that are centrally located within the workflow of activities, and strengthen their own
connections with them.

Limitations and directions for future research

In closing, the limitations of this study should also be addressed. First, the study is limited to
one geographical and cultural context. A large-scale international research would enrich our

18
understanding of the phenomena under consideration. Second, the study limits itself to an analysis of
marketing’s power as a precursor to its influence within the firm. In doing so, it neglects other
factors that also account for marketing’s influence, such as those identified by Homburg et al. (1999)
and Verhoef and Leeflang (2009). Future studies may wish to develop an integrative model. Third, a
single-informant approach of a cross-sectional nature was employed. The study has the notable
advantage of employing data from senior managers, to which different functions report. Yet, the
outcomes might have been more reliable if multiple respondents per firm had been used, including
marketing managers and perhaps even respondents from other subunits. Moreover, the cross-
sectional approach is limited in providing an understanding of causal relationships, and a
longitudinal approach would avoid this shortcoming, while also uncovering some of the dynamics
that underlie the effects under study. Fourth, while there are strong theoretical and empirical reasons
for seeing marketing’s power sources as determinants of marketing’s strategic influence in an
organization, there may also be the possibility, due to system dynamics, that a feedback loop exists
between influence and power: as marketing’s influence grows, the more marketing is able to
strengthen its power bases. This is a research question that deserves attention in future studies,
particularly those adopting a longitudinal approach.

19
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22
 Table 1: Confirmatory Factor Analysis for Multiple-Item Scales

Item Factor t-values

loadings
Customer orientation (α = .85; CR = .87; AVE = .63)

Our business objectives are driven primarily by customer satisfaction .77a -

We constantly monitor our level of commitment and orientation to serving
customers’ needs .86 7.61

Our strategy for competitive advantage is based on our understanding of customers’ .87 7.85
needs

Our strategies are driven by our beliefs about how we can create greater value for
customers .75 6.78

We measure customer satisfaction systematically and frequently .78 6.92

.

We give close attention to after-sale service 84 7.34

Competitor orientation (α = .81; CR = .83; AVE = .56)

Our salespeople regularly share information within our firm concerning
competitors’ strategies .70a -

We rapidly respond to competitive actions that threaten us .77 6.18

Top management regularly discusses competitors’ strengths and weaknesses .80 6.83

We target customers where we have an opportunity for competitive advantage .81 6.92
Interfunctional coordination (α = .85; CR = .87; AVE = .61)

Our managers understand how everyone in our business can contribute to creating
customer value .80a -

We communicate information about our good and bad customer experiences across
all departments .83 7.10

Our top managers from every function regularly visit our current and prospective
customers .89 7.92

All of our business functions and depts. are responsive to each others’ needs and
requests .79 6.57

All of our departments are integrated in serving the needs of our target markets
.80 6.80
Differentiation (α = .71; CR = .73; AVE = .48)

Our business unit emphasizes competitive advantage through superior products .74a -

Our business unit emphasizes creating superior customer value through services
accompanying the products .70 5.90

Our business unit emphasizes new product development .68 5.56

Our business unit emphasizes building up a premium product or brand image .80 6.93

Our business unit emphasizes obtaining high prices from the market .76 6.21

Our business unit emphasizes advertising .60 5.06
Market Turbulence (α = .83; CR = .85; AVE = .60)

Our customers are looking for new products all the time .83a -

Sometimes our customers are very price sensitive, but other times price is relatively .80 6.90
23
 unimportant

We are witnessing demand for our products from customers who never bought them
before .87 7.78

New customers tend to have product-related needs that differ from those of existing
customers .77 6.27

We are not catering to many of the same customers that we used to in the past .84 7.20
Psychological power (α = .73; CR = .75; AVE = .50)

Marketing people here provide important strategic advice .80a -

Compared to people in other departments, marketing people here have a good .60 5.04
reputation

Marketing people here can communicate effectively the impact of their activities on
performance .61 5.08

Marketing people here have a good understanding of the business and its external .77 6.29
environment
Notes: a-item equated with 1 to set the scale; α = Cronbach’s alpha; CR = composite reliability; AVE = average variance
extracted. t-values significant at p < .05 level and higher.

24
 Table 2: Regression Analysis (Dependent Variable = Marketing’s Influence)

Model 1 Model 2
Variable b t-Value b t-Value

Control variable
Firm size .05 .55 .06 .62
Market orientation -.18 -1.28 -.15 -1.06
.05 .52 .02 .18
Differentiation strategy

Main effects
Critical contingencies power (H1) .22 2.32* .23 2.39*
Bureaucratic power (H2) .22 2.34* .22 2.27*
Network power (H3) .17 1.82 .19 2.04*
Psychological power (H4) .10 .77 .10 .70
Market turbulence (H5) .07 .67 .05 .43
Interaction effects
Critical contingencies x Turbulence (H6a) .22 2.18*
Bureaucratic x Turbulence (H6b) -.02 -.19
Network x Turbulence (H6c) -.07 -.62
Psychological x Turbulence (H6d)
-.04 -.30

2
R .19 .23
F 3.03** 2.63**
2
∆R - .04
∆F - 2.01*
*p<.05, **p<.01
Note: Standardized regression coefficients are reported

25
Figure 1: Hypothesized Model

COVARIATES:
SBU size
Market Orientation
Differentiation

26