THE CHANGING ROLE OF MARKETING IN THE CORPORATION

THE CHANGING ROLE OF MARKETING IN THE CORPORATION
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advertiser account relationships. Other large firms, such as Anheuser-Busch and General Electric, also entered into research partnerships with university-based consulting organizations.

Such specialized and sophisticated professional marketing expertise fit well into the strategy, structure, and culture of large, divisionalized, hierarchical organizations.

The Large, Bureaucratic, Hierarchical Organization

When we think of marketing management, we think of large, divisionalized, functional organizations--the kind depicted by the boxes and lines of an organization chart. The large, bureaucratic, hierarchical organization, almost always a corporation in legal terms, was the engine of economic activity in this country for more than a century (Miles and Snow 1984). It was characterized by multiple layers of management, functional specialization, integrated operations, and clear distinctions between line and staff responsibilities. It had a pyramid shape with increasingly fewer and more highly paid people from the bottom to the top.

The larger the firm, the more activities it could undertake by itself and the fewer it needed to obtain by contracting with firms and individuals outside the organization. The logic of economies of scale equated efficiency with size. The epitome of the fully integrated firm was the Ford Motor Company, and most notably its River Rouge plant, which produced a single, standardized product, the Model A. Ford-owned lake steamships docked at one end of the plant with coal and iron ore (from Ford's own mines) and complete automobiles and tractors came out at the other end. Molten iron from the blast furnaces was carried by ladles directly to molds for parts, bypassing the costly pig iron step. Waste gases from the blast furnaces became fuel for the power plant boilers, as did the sawdust and shavings from the body plant. Gases from the coking ovens provided process heat for heat-treatment and paint ovens (Ford 1922, p. 151-153). Elsewhere, Ford owned sheep farms for producing wool, a rubber plantation in Brazil, and its own railroad to connect its facilities in the Detroit region (Womack, Jones, and Roos 1991, p. 39). Integration required large size. Large size begat low cost.

Large, hierarchical, integrated corporate structures were the dominant organization form as the managerial approach to marketing developed in the 1950s and 1960s, and firms created marketing departments, often as extensions of the old sales department. Such large organizations moved deliberately, which is to say slowly, and only after careful analysis of all available data and options for action. The standard microeconomic profit maximization paradigm of marketing management fit well in this analytical culture. Responsible marketing management called for careful problem definition, followed by the development and evaluation of multiple decision alternatives, from which a course of action would ultimately be chosen that had the highest probability, based on the analysis, of maximizing profitability.

When the world was changing more slowly than it is today, such caution was wise in terms of preserving valuable assets that had been committed to clearly defined tasks, especially when those assets were huge production facilities designed for maximum economies of scale in the manufacture of highly standardized products. The task of the 4

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