Which department should have more influence on organization-level decisions? A strategy-dependent analysis / created by Andreas Engelen

An intense debate has arisen on the decreasing influence of marketing departments in firms. The present study addresses this debate, building upon the coalitional view of the firm and the ‘thought world’ concept to shed light on the question concerning which department should have more influence on organization-level decisions, such as the strategic direction of the firm and investments in IT technology. The roles and influence of four major departments – marketing, sales, R&D, and manufacturing – are investigated in terms of how they affect firm performance. Findings indicate that strong marketing and sales departments are important for firms that have a differentiation strategy, while strong R&D departments are beneficial regardless of the strategy type, and a strong manufacturing department is important in firms with a cost leadership focus. Findings also reveal an inverted U-shaped relationship between the dispersion of influence and performance, so a medium level of influence dispersion is the most effective. The study shows the effect of political processes in an organization on performance. Avenues for marketing research are derived.