CRAVENS
PIERCY
8/e
McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-2
Chapter
Fourteen
Designing
Market-Driven
Organizations
McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-3
Designing MarketDriven Organizations
Considerations in
organizational design
Organizational design
options
Selecting an organizational
design
Global dimensions of
organizations
14-4
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
14-5
Alternative Organizational
Structures
Traditional
Hierarchy
Process
Overlay
Functional
Structure
Process
Structure
Functional
Overlay
Horizontal
Structure
14-6
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
14-7
Illustrative Example:
Johnson Controls



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
14-8
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
–
–
–
–
–
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
14-10
Organizational
Design Options
Traditional designs
 Marketing’s corporate role
 New forms of marketing
organizations

14-11
Traditional Marketing
Organization Designs
Functional
Matrix
TRADITIONAL
DESIGNS
MarketFocused
ProductFocused
14-12
Product-Focused
Structure
Marketing Organization
Based on a Combination of
Functions and Products
14-13
Organizational
Transformation
14-14
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
14-15
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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14-17
Selecting an
Organization Design
Organizing concepts
 Organizing the sales force

14-18
Organizing Concepts
Centralized
Formalized
Nonspecialized
BUREAUCRATIC
TRANSACTIONAL
Internal
(hierarchical)
Organization
of Activity
External
(market)
Organization
of Activity
ORGANIC
RELATIONAL
Decentralized
Nonformalized
Specialized
14-19
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
14-21
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.
14-22
Global Marketing Organization
Executive
Qualifications
Standardized
Versus
Customized
Strategies
Alternative
Organization
Forms
GLOBAL
ORGANIZING
ISSUES
Strategic
Alliances
Coordination
and
Communication