1. Marketing Department Power and Board Interlocks
- Author
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Peter Ebbes, Rajdeep Grewal, Frank Germann, Ecole des Hautes Etudes Commerciales (HEC Paris), and HEC Research Paper Series
- Subjects
History ,social networks ,Polymers and Plastics ,media_common.quotation_subject ,JEL: L - Industrial Organization/L.L1 - Market Structure, Firm Strategy, and Market Performance/L.L1.L14 - Transactional Relationships • Contracts and Reputation • Networks ,endogeneity ,Industrial and Manufacturing Engineering ,board interlocks ,Power (social and political) ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M3 - Marketing and Advertising/M.M3.M31 - Marketing ,Endogeneity ,Business and International Management ,Marketing ,marketing department power ,media_common ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M3 - Marketing and Advertising/M.M3.M30 - General ,JEL: C - Mathematical and Quantitative Methods/C.C2 - Single Equation Models • Single Variables/C.C2.C23 - Panel Data Models • Spatio-temporal Models ,Information sharing ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M1 - Business Administration/M.M1.M14 - Corporate Culture • Diversity • Social Responsibility ,Information quality ,Influencer marketing ,Service (economics) ,Position (finance) ,[SHS.GESTION]Humanities and Social Sciences/Business administration ,Business ,Centrality ,JEL: C - Mathematical and Quantitative Methods/C.C2 - Single Equation Models • Single Variables/C.C2.C26 - Instrumental Variables (IV) Estimation - Abstract
Although the level of power held by the marketing department can determine key organizational outcomes, including firm performance, this power often is modest and, in many firms, diminishing. To address this apparent disconnect, the authors propose that the board of directors is a critical but overlooked driver of marketing department power. In particular, directors’ marketing exposure through board service at other firms (i.e., board-interlocked firms) may affect the marketing department’s power in the firms on whose boards they also serve. With a sample of 4,422 firms, spanning 2007–2013, this study reveals that marketing department power in board-interlocked firms significantly and positively drives marketing department power in the focal firms. Consistent with an information sharing view, the magnitude of this effect varies with the focal firm’s network position in the board-interlocked network, such that it strengthens as the focal firm’s network centrality (information amount) and network brokerage (information quality) increase. These robust results suggest that board members and their social networks significantly influence marketing department power; if marketing wants to increase its power, it should get the board “on board.”
- Published
- 2019