تاثیر قابلیت های عملیاتی و بازاریابی بر عملکرد شرکت: شواهد از رشد اقتصادی و رکود

This paper examines how the importance given to operations and marketing functions impacts their capabilities and, consequently, overall firm performance. Using the resource-based theory (RBT) and top management team literature as a foundation, we explore the relationship between business factors under different economic conditions using panel data, to test whether the importance given to the operations and marketing functions leads to capability development in those functions. We also test whether these capabilities explain performance differentials between firms in different economic conditions. Our results show that marketing and operational capabilities both improve firm performance, though operational capability is more important during economic downturns. Also, we find that the importance given to operations and marketing functions impacts their capabilities during periods of economic growth. Our results have key implications for operations strategy, capability development, and resilience in the face of economic downturns.

One of the chief functions of top management in a professional setting is allocating scarce resources between organizational sub-units in order to maximize firm performance. The importance placed on particular functions, such as operations and marketing, can have significant implications for decision-making and resource allocation within a firm, and can make a lasting impact on the firm׳s bottom line. The greater the importance given to a function, the greater is its influence, impact, and role in corporate-level decisions. Yet, top management scholars have not studied the implications of giving or withholding importance to key functions. Instead, researchers have focused on characteristics of the top management team and governance mechanisms, such as boards of directors (Hambrick, 2007). The objective of this paper is to address this gap by studying how the importance given by top management to operations and marketing functions impacts the capabilities of these functions and overall firm performance in changing economic conditions. Marketing and operations are two key business functions that create value for the firm (Nath et al., 2010). A cursory study of annual reports from top performing firms in the Fortune 500 and Business Week׳s Top 50 suggests that top management teams often highlight operational and marketing issues in letters to shareholders. And some companies shift their focus to operations during economic downturns. For example in 2008, Abercrombie & Fitch was treating its brand as a strategic asset, and presenting its strategy as protecting and growing the brand ( Abercrombie and Fitch, 2008). However, it declared that 2009 was to be a transitional year; they planned to reduce store openings in order to focus on cost structure and efficiencies ( Abercrombie and Fitch, 2009). In contrast to Abercrombie & Fitch, through the late, 2000s McDonald׳s consistently highlighted a commitment to operational excellence in its annual reports. McDonald׳s financial performance in 2008 was far above par, with a 17% growth in operating income, even while other firms were facing declines. In fact, it was one of just two companies on the Dow Jones to post a stock market gain in 2008, a year when both Dow Jones and S&P fell significantly (“ McDonald׳s 2008 Annual Report, 2008”). L׳Oreal, one of the leading multi-national cosmetics firms, is strongly driven by marketing and brand strength. In 2007, L׳Oreal became the third largest advertiser in the world. A review of its annual reports suggests that L׳Oreal is a company that is simultaneously pursuing operational-, marketing-, and brand-related goals year after year. In 2010, L׳Oreal׳s annual reports mention that it was enjoying the fruits of its continued focus on operations and marketing efficiency, which drove its strong financial performance throughout 2008–2010. Such anecdotal evidence leads us to inquire whether the importance given to certain areas (or functions) of the firm has a significant impact on capability development of those areas. Such a relationship would have important implications for senior managers, for example in forming function-level strategies, and for researchers in understanding where certain business capabilities come from. This motivates our first research question: Does top management importance lead to greater functional capability? Recent developments in the markets for business services, including marketing (advertising and market research), logistics (3PLs, professional warehousing), and custom manufacturing services, mean that firms can buy (or rent) some operational and marketing capabilities off-the-shelf from factor markets (Barney, 1986). This implies that operational and marketing capabilities are not rare or inimitable, and hence not important for competitive advantage (Barney, 1991). If, on the other hand, the operations or marketing task is more than what can be outsourced or purchased, then firms that ignore operations or marketing could lose important capabilities, and hence, their business may suffer. Because of time compression diseconomies, and learning and path dependencies, a firm may not be able to create capabilities ‘just-in-time’ (Dierickx and Cool, 1989). It is important to evaluate the importance and significance of operational and marketing capabilities because firms have often incurred irreparable damage by outsourcing activities that formed the basis of their competitive advantage (Barthelemy, 2003 and Pisano and Shih, 2009). Based on this conclusion, our second research question is: Do operational and marketing capabilities still explain performance differentials in the era of outsourcing? Existing research indicates that managing during recessions is challenging and differs significantly from managing under conditions of economic munificence or growth (Ang et al., 2000, Campello et al., 2010 and Geroski and Gregg, 1996). Economists like Schumpeter (1942) have long argued that economic downturns have a cleansing effect, where inefficient organizations and obsolete products are eliminated. In contrast, other economists like Ouyang (2009) have shown that in addition to eliminating inefficient firms, recessions also eliminate superior firms or firms with great future potential if these firms lack the resources and skills necessary to survive adverse economic conditions. Yet, there is a scarcity of research on what capabilities and strategies help companies survive economic downturns (Gulati et al., 2010). To this point, Srinivasan et al. (2005) conclude that academic research on managing during recessions “offers weak and equivocal insights” (p. 110). In specific functional service areas, such as marketing, there are a small number of studies pertaining to the profit impact of advertising expenditure and marketing strategies during recessions (Lilien and Srinivasan, 2010, Rollins et al., 2014, Srinivasan et al., 2005 and Srinivasan et al., 2011). These studies show mixed evidence regarding the efficacy of advertising during recessions, and conclude that financial cutbacks limit marketing activities. Studies also show the possibility of generating profits through aggressive marketing strategies under certain conditions. However, with the exception of Abrahamsen and Hartwig׳s work on the impact of recession on inventories (2011), there have been no studies in the operations area. Addressing this gap is urgent, as firms that are ill-prepared for the effects of economic downturns may not survive. Our third research question addresses a portion of this important gap: Do the effects of operational and marketing capabilities, and top management importance on profits, vary based on different economic conditions? Below, we investigate these topics in greater depth: Section 2 summarizes relevant literature and develops our theoretical framework. Section 3 documents the measurement of the constructs and the empirical methods used. Section 4 presents the results of our empirical study. Section 5 concludes by exploring implications of the results for managers and for research in operations strategy, capability development, and resilience in the face of economic downturns.

This study has provided insights with empirical evidence for the three research questions mentioned in the introduction. We have shown that top management importance does lead to operational and marketing capabilities during times of economic growth. We have shown that operational and marketing capabilities are important for competitive advantage as they explain performance differentials between firms. Lastly, we have shown that economic conditions are important moderators for (1) the effects of operational and marketing capabilities on performance, and (2) for the effects of top management importance on creating operational and marketing capabilities. The theoretical and managerial implications of these findings are discussed below, followed by future research directions. 6.1. Theoretical contributions Our work makes several contributions to key research areas in management. Firstly, strategy literature has posited, as part of RBT, that non-imitable and non-substitutable organizational capabilities and resources provide competitive advantage and explain the heterogeneity in organizational performance (Amit and Schoemaker, 1993, Barney, 1991 and Wernerfelt, 1984). And yet, the question of where capabilities come from has not received as much attention as the impact of those capabilities once acquired (Ethiraj et al., 2005). Our findings suggest that top management teams affect firm performance through choosing and prioritizing which capabilities to develop. We provide empirical evidence to support the argument that the importance given to a function impacts the capability development in that area. Secondly, our work provides a link between top management team (TMT) research literature (Hambrick and Mason, 1984, Hambrick, 2007 and Hambrick et al., 1996) and RBT. For the TMT stream, we provide further evidence that the actions of top managers can and do impact firm performance through their influence on organizational capabilities. For RBT, we show that top management teams are a resource that affects the organizational capability development. Ultimately, it is not just the characteristics of the top management that matter, but also what they do in terms of their focus and the importance they place on key organizational factors. And importantly, we demonstrate that the importance given by top management loses its influence during periods of economic downturn. Thirdly, in employing a longitudinal multi-industry sample to test operational and marketing capabilities, our study is able to demonstrate broader-term results than have been previously tested in marketing literature (which has mainly focused on a cross-section of samples, often of a few industries only; e.g., Nath et al., 2010). Thus we perform a stricter empirical test for several key questions that would be of relevance to practitioners and academicians who are looking for a broader focus on this issue. Fourthly, our study contributes to work on firm resilience (i.e., the ability to adapt to adversity). By investigating economic adversity in the form of economic downturns, we show that the lever of functional importance is not always effective for improving firm performance or capability development, as its effects are not significant in all periods (Table 3, Table 4 and Table 5). However, operational capability consistently and positively affects firm performance, and marketing capability has a positive effect in three of the four time periods. This shows that during economic adversity, firms can safely rely on their capabilities but not the more easily adjustable lever of functional importance. Finally, this study further contributes towards developing DEA-based measures of functional capability. Although previous research had used such measures (Dutta et al., 2005 and Nath et al., 2010), none had tested them for endogeneity with financial ratios like return on assets (ROA). Our study shows that such DEA-based measures are not endogenous with financial firm performance measures. And hence, these measures can be used for future studies that focus on operational and marketing capabilities using secondary data. 6.2. Managerial implications Our results provide three insights for practitioners. First, operational and marketing capabilities can still be a source of competitive advantage and should not be outsourced without great care. Second, firms can more easily build capabilities in periods of economic growth or munificence, than during downturns, so managers should focus on capability development when the times are good. Third, the importance given to operations and marketing impacts their capability development as well as the firm׳s overall performance, and hence, CEOs should strive to give importance to these functions. We explore these and other insights in more detail below. The literature on outsourcing has often warned against outsourcing activities that are core to the competitive advantage of the firm (Barthelemy, 2003). Pisano and Shih (2009) note that American firms often took outsourcing too far and lost important capabilities that eventually hurt their competitiveness. This was recently illustrated by the case of Boeing׳s 787 Dreamliner project, which suffered several quality issues, delays, and budget over-runs due to massive outsourcing of the design and manufacturing of important components (Denning, 2013). By showing empirical evidence for the sustained and significant effect of operational capability, our work provides important guidance to managers. Because operations are often central to the competitive advantage of firms, top management decision-makers should take great care when considering outsourcing operations activities. The same can be said for marketing activities, since marketing capability has shown to have a similarly strong effect in both economic peaks and troughs. Notably, in three of the four time periods, operational capability has a significantly greater effect on performance than marketing capability. This result stems from the greater scope of the operations task to the overall functioning of firms. Because our sample was large and longitudinal, we feel that the result adequately captures the average corporate market situation. We acknowledge that examples and situations exist where marketing capability may be crucial for the very survival of the firm, and we are not suggesting that firms exclusively focus on operations at the expense of marketing. Instead, we are emphasizing the central role of operations in realizing profitability and competitive advantage for firms. This suggests that the operations function should be treated with strategic importance because of its greater significance for firm performance. Thus, our results provide strong counterevidence to what some marketing studies have proposed, where marketing capability takes center stage (e.g., Krasnikov and Jayachandran, 2008). 6.3. Limitations and future studies This study is limited in several ways that should be addressed by future research. Secondary data enabled both the longitudinal analysis and capturing the effects of economic conditions but at the cost of reduced precision of some constructs such as functional importance. Future research should use other methods like survey research and case studies to verify these results. Case study and survey methodologies could prove particularly useful if the timing of the data collection matches a drastic change in economic conditions. In such a scenario the respondents could provide input on their company׳s situation prior to and after the change. This study tacitly conceptualizes operations and marketing functions as silos or independent entities with little overlap. In many organizations traditional functional silos are markedly reduced by the extensive use of cross-functional teams. Future research should study how the use of cross-functional teams, with members from the operations and marketing functions affects competitive advantage and the ability to survive economic downturns. The results of this study show how the importance given by top management to operations and marketing functions impacts the capabilities of these functions and overall firm performance in changing economic conditions for a broad group of industries. These results could be different in some industries. For example in mature industries with stable technologies, all companies may have achieved similar levels of operational excellence. In such industries survival may depend on the ability to create brand loyalty alone. Also industries marked by extreme levels of dynamism where customer preferences change rapidly may behave differently. Future research should clarify the boundary conditions of our results.