ARTICLE OUTLINE

Article outline

Article outline

Introduction

The article explores why firms employ a CMO and whether this presence affects product anatomy. Previous researches indicated that CMO presence reflects the importance of marketing at the top (Webster et al, 2003), yet the Booze Allen Hamilton study estimates 50% of Fortune 1,000 firms have a CMO while 80% Fortune 500 firms have a CFO. This paper is the first to reflect the importance of marketing at the TMT level while previous researches focused on the strategic business unit (Homberg et al, 1999).

Analysis

The theories of contingency, power dependency and homophily underpin the study's hypotheses. Zorn's (2004) idea that CFO presence in firms is due to uncertainty in finance is adapted to assume that CMO presence is in firms where uncertainties appear in marketing. They identify that a firm's 'strategic, structural and environmental factors' indicate the presence/absence of a CMO. Therefore they hypothesize innovation, differentiation, branding strategy, outsider CEO and a firm's performance positively relate to CMO presence. Conversely, high diversification and market concentration would mean less likelihood of a CMO whereas marketing and general management experience in the TMT could affect CMO presence either-ways.

The research uses reliable, high-quality, secondary data from COMPUSTAT. Definitions of measures, TMT, CMO, data sources, structure and environmental factors comply with previous academics as defined by the 10-K or proxy statements. The researchers use a quantitative approach in empirical testing using statistical techniques; however a qualitative strategy defines a CMO's role by analyzing press releases, job descriptions and interviews. Causality shows CMO presence/absence as the dependent variable measured against the independent variables. They use a cross-sectional, longitudinal design and time-lagged some variables to avoid reverse causality and retain internal validity. A positivist epistemological approach is followed as deductive procedures check the relationship between variables as done in natural sciences. They use theory to form hypotheses, submitting these to empirical inspection (Bryman and Bell, 2007). However the nature of these variables is dependent on several factors controlling the individual make-up of firms therefore the suitability of this strategy is questionable. An objectivist ontological position is illustrated in the use of standardized procedures that quantify and establish correlations between the numerically controlled variables. The assumption that these approaches produce reliable results is questionable yet step-by-step outlining of the use of median measures showing correlations between variables in a representative sample renders external validity to the study (Bryman and Bell, 2007). The Booze Allen Hamilton study was confirmed as their sample revealed that more firms employed a CFO than a CMO.

The hypotheses that innovation, differentiation, branding strategy and an outside CEO indicate CMO presence were confirmed with high probability. Nevertheless, they do not consider that a corporate branding strategy and diversification may co-exist, e.g. General Electric Co. Testing diversification revealed that small firms diversify, reducing CMO presence; the opposite being true for large firms. Earlier research by Hopkins and Bailey (1984) had simply identified diversification as affecting CMO likelihood. TMT with marketing experience as positive and general management experience as negative had partial ...