Marketing in the C-Suite: A Study of Chief Marketing Officer Power in Firms' Top Management Teams

Pravin Nath & Vijay Mahajan
Journal of Marketing
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Executive Summary
The authors study the drivers and outcomes related to the power of the chief marketing officer (CMO) in the firm’s top management team (TMT) or corporate executive suite (C-suite), which is defined as the CMO’s ability to influence decisions the TMT makes. The strategic nature of these decisions arguably leads to some level of conflict in the decision-making process, a stand also taken in the political view of organizations. More often than not, the resolution of such conflict is through the influence that TMT executives exert over one another. Powerful executives are able to exert greater influence, driving decisions toward their point of view or that of the divisions or functions they represent within the TMT. Therefore, CMO power represents an important facet of marketing’s influence among the C-suite given the CMO’s position as the head of the firm’s marketing organization.

Drawing on theories of intraorganizational power, the authors establish that CMO power in the TMT should increase with (1) the CMO’s control over informational, human, relational, and organizational resources in the marketing domain; (2) the criticality of these resources and (3) the effectiveness with which the CMO provides them to the TMT; and the (4) nonsubstitutability and (5) centrality of the CMO or these resources in the TMT. The authors test these five rationales and identify the sources of CMO power using a longitudinal sample of public U.S. firms with the CMO position. They measure CMO power using the CMO’s position in the TMT hierarchy, obtained from firms’ 10-Ks and/or annual reports.

The findings show that CMO power increases when the CMO is also responsible for sales, given the greater control, effectiveness, and centrality that comes with this additional responsibility. Chief marketing officer power also increases with the pursuit of innovation or research-and-development spending, albeit only when the proportion of TMT executives with marketing experience, excluding the CMO, is low, a condition that increases the criticality of the CMO or that of his or her resources. However, CMO power decreases with increasing TMT marketing experience because such experience reduces the nonsubstitutability of the CMO or that of his or her resources.

These findings benefit CMOs by providing broad rationales and specific enablers for achieving positions of power. The results pertaining to outcomes also provide chief executive officers with recommendations related to the power of this structural position. Specifically, CMOs should be empowered in TMTs with high proportions of divisional heads because they are then able to align divisional marketing plans with the corporate agenda, which translates into superior sales growth. For the same reason, CMO power should not be high in unrelated diversifiers, because it works against the premise of separation of business divisions that such firms rely on and reduces profitability. Finally, the authors find that a source of power, the CMO’s additional responsibility of sales, improves sales growth, suggesting that such a structural arrangement provides for better integration of marketing and sales.

Biography
Pravin Nath is Assistant Professor of Marketing in Drexel University’s LeBow College of Business. He received his PhD in Marketing from the University of Texas at Austin’s McCombs School of Business. He also holds a Master’s degree in Marketing and a Bachelor’s degree in Engineering from the University of Bombay. Before his earning his PhD, Pravin spent about five years working in reputed firms in India, where he acquired valuable experience in sales and marketing, market research, and client servicing. Pravin’s primary area of research interest is in the role of marketing in the firm. He explores this important issue as the marketing landscape shifts with new forms of media and globalization.

Vijay Mahajan, former dean of the Indian School of Business, holds the John P. Harbin Centennial Chair in Business in the McCombs School of Business at the University of Texas at Austin. He has received several lifetime achievement awards, including the American Marketing Association (AMA) Charles Coolidge Parlin Award for visionary leadership in scientific marketing. The AMA also instituted the Vijay Mahajan Award in 2000 for career contributions to marketing strategy. In 2006, he received the Distinguished Alumnus Award from the Indian Institute of Technology (Kanpur) for his contribution to management research. Mahajan is the author or editor of ten books, including The 86 % Solution, which received the 2007 Book-of-Year Award (Berry–AMA) from the American Marketing Association. He is one of the world’s most widely cited researchers in business and economics. He is former editor in chief of Journal of Marketing Research and has delivered research presentations in more than 100 universities and research institutes worldwide.

Journal of Marketing, Volume 75, Number 1, January 2011
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Pravin Nath & Vijay Mahajan
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