Agendas,Incubators,and Marketing Organization

Peters Tom , Thriving on Chaos: Handbook for a Management Revolution (New York, NY: Harper & Row, 1988), p. 426.

Peters Thomas J. , “The Destruction of Hierarchy,” Industry Week, August 15, 1988, p. 33.

Peters Thomas J. Waterman Robert H. Jr. , In Search of Excellence (New York, NY: Harper & Row, 1982), p. 121.

Peters , Thriving on Chaos, p. 49.

Bahrami Homa Evans Stuart , “Strategy Making in High-Technology Firms,” California Management Review, 31/2 (Winter 1989): 123. Similarly, McKenna Regis [Who's Afraid of Big Blue? (Reading, MA: Addison-Wesley, 1989), p. 39] states: “In this environment, there is a premium on nimbleness and flexibility. Companies that can spot new niches and react quickly are the most likely to succeed. In many cases, small startups are at an advantage.”

Seminal discussions of boundary roles in organizations are Kahn Robert L. Wolfe D.M. Quinn R.P. Snock J.D. Rosenthal R.A. , Organizational Stress (New York, NY: John Wiley, 1964); and Thompson J.D. , Organizations in Action (New York, NY: McGraw-Hill, 1967). Other important discussions of boundary spanning are Adams J. Stacy , “The Structure and Dynamics of Behavior in Organizational Boundary Roles,” in Dunnette M. , ed., Handbook of Organizational and Industrial Psychology (Chicago, IL: Rand McNally, 1976); Aldrich Howard Herker Diane , “Boundary Spanning Roles and Organizational Structure,” Academy of Management Review, 2 (April 1977): 217–230; and Liefer Richard Delbecq Andre , “Organization/Environment Interchange: A Model of Boundary Spanning Activity,” Academy of Management Review, 3 (January 1978): 40–50. In the marketing context, the boundary-spanning concept has been used to discuss specific roles such as the salesperson [see Spekman Robert E. , “Organizational Boundary Behavior: A Conceptual Framework for Investigating the Industrial Salesperson,” in Bagozzi R. , ed., Sales Management: New Developments from Behavioral and Decision Model Research (need publisher location) Marketing Science Institute, 1978)] and the product manager [ Lysonski Steven , “A Boundary Theory Investigation of the Product Manager's Role,” Journal of Marketing, 49 (Winter 1985): 26–40], but not more general organizational issues and requirements concerning marketing's role in the firm's process of adaptation to environmental change.

Levitt Theodore , “Marketing Myopia,” Harvard Business Review, 38 (July/August 1960): 24–47.

Cf. Peters , Thriving On Chaos, p. 213, who stresses that “the two most neglected elements of the typical American corporation—1) manufacturing, 2) sales and service—must achieve preeminence if we are to become competitive once again. They are the basic capability building blocks.” I agree. But this article seeks to specify sales-related issues more actionably and comprehensively than Peters who, among many others over the past decade, tends to ignore the role of structures and systems in constraining and enabling good sales and service.

For these views, see, respectively, Miles Raymond E. Snow Charles C. , “Fit, Failure and the Hall of Fame,” California Management Review, 26/3 (Spring 1984): 10–28; McKenna , op. cit; and Peters , Thriving on Chaos, p. 3.

In Who's Afraid of Big Blue?, Regis McKenna cites such conditions as reasons why “in the past decade, everything related to computers has changed dramatically … . As a result, things will never be the same for IBM—or for the computer industry as a whole” (p. 29). But nearly all the developments cited by McKenna as unique to the 1980s (dramatic price/performance improvements; increased decentralization/personalization of the computer; the rise of networks; fragmentation of the market; new categories of users; internationalization) are in fact continuations of trends present in the industry since its inception. The point is that things never were “the same” in this industry, making it a good setting for exploring historically issues concerning organizational adaptations to a constantly changing environment.

See, for example, Miles Snow , op. cit., p. 26; Drucker Peter F. , “The Coming of the New Organization,” Harvard Business Review (January/February 1988), pp. 45–53; McKenna Regis , “Marketing in an Age of Diversity,” Harvard Business Review (September/October 1988), pp. 88–95; or Kanter Rosabeth Moss , When Giants Learn to Dance: Mastering the Challenges of Strategy, Management, and Careers in the 1990s (New York, NY: Simon & Schuster, 1989).

In this respect, a focus on IBM and the computer business in order to illustrate more general issues concerning marketing organization in fast-changing environments conforms to a basic tenet inherent in field research that seeks to suggest managerially relevant recommendations: Such research relies on cases chosen primarily for their potential theoretical, not statistical (i.e., random sample), interest. See Glaser B. Strauss A. , The Discovery of Grounded Theory (New York, NY: Weidenfeld and Nicholson, 1967); and Yin R. , Case Study Research: Design and Methods (Beverly Hill, CA: Sage Publications, 1984). And as Andrew Pettigrew notes [“Longitudinal Field Research on Change: Theory and Practice,” a paper presented at the National Science Foundation Conference on Longitudinal Research Methods in Organizations, 1988], given the importance of empirically rich descriptions and the limited number of cases that can usually be studied and discussed in any depth, it makes sense to focus on situations in which the process of interest is most “transparently observable.” See also Eisenhardt Kathleen M. , “Building Theories from Case Study Research,” Academy of Management Review, 14/4 (1989): 532–550. Unless otherwise noted, all references to IBM's reorganizations in this article, and quoted comments by IBM managers, are based on Cespedes Frank V. King Jon E. , “IBM: Changes in Marketing Organization” (N9-588-037), a case study available from the Publishing Division, Harvard Business School.

“IBM's $5,000,000,000 Gamble,” Fortune (September 1966).

This paradigm has always been ambivalent about precisely what organizational structures depend upon properties of the environment: The whole organization (as in the “7S” framework and most current culture-based approaches to organizational studies) or the structures of certain functions within the firm? See Schoonhoven Claudia Bird , “Problems with Contingency Theory: Testing Hidden Assumptions Hidden Within the Language of Contingency Theory,” Administrative Science Quarterly, 26 (1981): 349–377. Similarly, the notion of “fit” itself is subject to multiple interpretations and organizational theorists have used these perspectives interchangeably, often invoking one perspective in their frameworks and prescriptions while employing another in their empirical research and field evidence. See Drazin R. Van de Ven A.H. , “An Examination of Alternative Forms of Fit in Contingency Theory,” Administrative Science Quarterly, 30 (1985): 514–539; and Venkatraman N. , “The Concept of Fit in Strategy Research,” Academy of Management Review 14 (1989): 423–444.

Quinn James Brian , Strategies for Change: Logical Incrementalism (Homewood, IL: Irwin, 1980) is the source for this perspective on the interaction among goals, change, and structure in organizations.

Jeffrey Brian , “IBM's Protean Ways,” Datamation January 1, 1986, p. 68.

Arrow Kenneth , The Limits of Organization (New York, NY: W.W. Norton, 1974), pp. 47–48.

Simon Herbert A. , “Rationality as Process and as Product of Thought,” in Bell David E. Raiffa Howard Tversky Amos , eds., Decision Making: Descriptive, Normative, and Prescriptive Interactions (Cambridge: Cambridge University Press, 1988), p. 73. Relevant in this context is a stream of empirical research which indicates that comprehensiveness—“the extent to which organizations attempt to be exhaustive or inclusive in the making or integrating of decisions”—slows strategic decision making and is positively related to firm performance in stable industry environments, but negatively related in dynamic, unstable environments; see Frederickson James W. Iaquinto Anthony L. , “Inertia and Creeping Rationality in Strategic Decision Processes,” Academy of Management Journal, 32 (September 1989): 516–542. Also relevant are the studies which indicate how the spread of new information technologies in organizations makes “users' time and attention, not information” the scarce resource in many organizations; see Clippinger John H. Konsynski Benn R. , “Information Refineries,” Computerworld, August 28 1989, pp. 73–77; and, more generally, Strassman Paul A. , Information Payoff: The Transformation of Work in the Electronic Age (New York, NY: The Free Press, 1985).

See Davis Stanley Lawrence Paul , “Problems of Matrix Organizations,” Harvard Business Review (May/June 1978), pp. 131–140, or Peters Thomas J. , “Beyond the Matrix Organization,” Business Horizons (October 1979), pp. 15–27.

Weick Karl E. , “Organizational Culture as a Source of High Reliability,” California Management Review, 29/2 (Winter 1987): 112–113.

For the importance of “unlearning” as a necessary component of organizational skill-building, see Hedberg B.L.T. , “How Organizations Learn and Unlearn,” in Nystrom P.C. Starbuck W.H. , eds., Handbook of Organizational Design, Vol. 1 (London: Oxford University Press, 1981), pp. 3–27; and Levitt B. March J.G. , “Organizational Learning,” Annual Review of Sociology, 14 (March 1988). For a discussion of the typical impediments to such “unlearning” in marketing organizations, see Bonoma Thomas V. , “Market Success Can Breed Marketing Inertia,” Harvard Business Review, 59 (September/October 1981): 115–121.

There is support for this assertion about organizational design in both the cognitive psychology and industrial product-design literatures. See the excellent review and discussion by Norman Donald A. , The Psychology of Everyday Things (New York, NY: Basic Books, 1988), pp. 12–13, where he states, “How do people cope? Part of the answer lies in the way the mind works—in the psychology of human thought and cognition. Part lies in the information available from the appearance of objects—the psychology of everyday things. And part comes from the ability of the designer to make the operation clear, to project a good image of the operation, and to take advantage of other things people might be expected to know… . The fundamental principles of designing for people [are]: 1) provide a good conceptual model, and 2) make things visible.”

Porter Michael E. , Competitive Advantage (New York, NY: The Free Press, 1985), p. 23.

Ibid., p. 24. For arguments and data that run counter to the “stuck in the middle” theory, see Buzzell R. Gale B. , The PIMS Principles (New York, NY: The Free Press, 1987), Chapter 5.

For representative summaries of this view, see Ginzberg Eli Vojta George , Beyond Human Scale (New York, NY: Basic Books, 1985); Adams Walter Brock James W. , The Bigness Complex (New York, NY: Pantheon Books, 1986); or Peters , Thriving on Chaos, pp. 15–25. In part, the current disdain for formal structures, hierarchy, and large corporations taps a deep and recurring strain in American thought. “Small is productive” is a tenet of the Jeffersonian and, later, Progressive roots of much thinking about social institutions (including business) in the United States; see Cochran Thomas C. , “Bureaucracy,” in Challenges to American Values: Society, Business, and Religion (New York, NY: Oxford University Press, 1985); and Miller Peter O'Leary Ted , “Hierarchies and American Ideals: 1900–1940,” Academy of Management Review, 14 (1989): 250–265. At least since the 1890s, the argument that large corporate structures mean a loss of managerial accountability and adaptiveness (an argument that, ironically, is now associated with large-scale LBO activity) has been commonplace; see McCraw Thomas K. , “The Evolution of the Corporation in the United States,” in Meyer John R. Gustafson James M. , eds., The U.S. Business Corporation: An Institution in Transition (Cambridge, MA: Ballinger, 1988), p. 8. Historically, in fact, those inveighing against “corpocracy” have been “preaching to the converted” in this country.

For nineteenth and early twentieth-century examples, see Chandler Alfred D. Jr. , The Visible Hand (Cambridge, MA: Harvard University Press, 1977), Part V, “The Management and Growth of Modern Industrial Enterprise”; for later twentieth-century examples, including computers, see Chandler Alfred D. Jr. , Scale and Scope (Harvard University Press, 1990). It is sometimes claimed that new computerized manufacturing technologies dramatically lower minimum efficient scale requirements and so make obsolete some of the central concerns in Chandler's histories of large-scale enterprise. But as Bela Gold points out, computer-aided manufacturing “requires substantial investments not only in computer and related communication facilities, but also in appropriate production machinery, tooling and transfer equipment, and in related instrumentation and controls. As a result, the ratio of fixed costs to total costs is raised, increasing the penalties of fluctuations in capacity utilization rates—a continuing risk in most manufacturing industries”; Gold Bela , “Computerization in Domestic and International Manufacturing,” California Management Review, 31/2 (Winter 1989): 135 [emphasis added].

Miles Raymond E. Snow Charles C. , Organizational Strategy, Structure, and Process (New York, NY: McGraw-Hill, 1978). The usefulness of their typology for diagnosing marketing strategies in particular is illustrated by McDaniel Stephen W. Kolari James W. , “Marketing Strategy Implications of the Miles and Snow Strategic Typology,” Journal of Marketing, 51 (October 1987): 19–30; and McKee Daryl O. Varadarajan P. Rajan Pride William M. , “Strategic Adaptability and Firm Performance: A Market-Contingent Perspective,” Journal of Marketing, 53 (July 1989): 21–35.

For similar views concerning strategic requirements in a global marketplace, see Bartlett Christopher A. Ghoshal Sumantra , “Organizing for Worldwide Effectiveness: The Transnational Solution,” California Management Review, 31/1 (Fall 1988): 54–74; and Hamel Gary Prahalad C.K. , “Strategic Intent,” Harvard Business Review, 67 (May/June 1989): 63–76.

Rodgers F.G. , The IBM Way (New York, NY: Harper & Row, 1986), p. 188.