Impact of Marketing Innovation on the Organizational Culture of a Market Leader - Dissertation Example

? Possible impacts of marketing innovation on the organizational culture of a market leader, and managerial attitudes towards its future. Proposal for Research Methods Antonia de Baey Glion Institue of higher education 18/07/2011 Word count: Contents 1.Introduction 3 1.1Rationale 6 1.2Research Questions 6 2.Aim and objectives 7 2.1Aim 7 2.2Objectives 7 3.Literature review 7 3.1Organizational Culture (OC) 8 3.2Market leaders 9 3.3Marketing Innovation 11 4.Research Methodology 13 4.1Research Philosophy 13 4.2Data Collection 14 4.2.1Sampling method 14 4.3.1Validity and reliability 16 5.References 17 1. Introduction In the last five decades the communication environment has benefited from several major innovations. Coming from mouth-to-mouth, to print media and to TV, to today?s Internet. Companies are using the Internet not only to educate customers about their products, but engage in two-way communication; hence the customer has the chance to participate in the marketing process and product development (Aaker & Joachimsthaler, 2000). This two-way communication takes place over online social media (OSM), like Facebook, Twitter and YouTube (Shu & Chuang, 2011). In the last decade the marketing communication has adapted to this new possibilities and the international percentage of interactive marketing with the customer has tripled (Kottler, Wong, Saunders, & Armstrong, 2005). Marketing and innovation in marketing depend largely upon the leadership from the top management within an organization. The right organizational culture and the focus on marketing are crucial for companies in a competitive industry (Bridgewater & Doyle, 1998). A company?s organizational culture (OC) consists of its constitution, strategies, and corporate value. It also includes the common experiences and standards that characterize an organization (Buelens, Van den Broeck, Vanderheyden, Kreintner, & Kinicki, 2006). Many distinct definitions for OC exist, it is important to be aware of the differences (Driskill & Brenton, 2011). There are two major schools about OC, which differ mainly in the aspect by whom it can or cannot be influenced or manipulated. The “German approach” towards OC sees the origins of OC in the interaction of employees and therefore not changeable through decisions of top management. The “American approach” defines OC as something that belongs to the company and can be influenced at discretion by top management (Dixon & Dougherty, 2010). It will be the “German approach” that will be explored in this study. A positive OC supports performance and efficiency of a company and can lead to superior market positions; furthermore it is seen as giving benefit to the brand (Aaker & Joachimsthaler, 2000). OC is an important factor for most market leaders. Commonly they do not reach the top of the market or distinguish themselves through external factors that lead to advantage. Often times it is strong internal commitment and a functioning integration of employees, that leads to success. Market leaders strongly value a positive internal environment of the organization, especially in very competitive markets (Simon, 2009)(Spear, 2009). Within the international food industry the Internet has become popular over the last years to market products. Most major food brands are using the possibility to communicate with their customers and integrate them into their marketing (Grunert & Ramus, 2005)(Ballantine, 2005). Looking at Germany?s food industry, the meat product sector is a major segment for the economy, with an annual turnover of about 16 billion Euros (German-meat, 2010). The current market leader of this industry is Rugenwalder Muhle GmbH (RwM), with the largest market share and the highest revenue since a significant time span. Being the market leader innovation is extremely important to RwM. Within the German meat industry RmW is the only organization that currently uses OSM as a great part of their marketing mix. The connection that OC and innovation have within a company is found to be substantial; OC is regarded to impact on how innovations are approached (Friedrich, Mumford, Vessey, Beeler, & Eubanks, 2010). This study will focus on the possible effects on OC that OSM, as a marketing innovation, could cause. 1.1 Rationale The influence of leadership and OC on innovation has been researched and a strong connection has been found (Friedrich, Mumford, Vessey, Beeler, & Eubanks, 2010). On the other hand there is a serious lack in research on marketing innovations and its impacts on OC, especially in the food industry. Therefore a study on possible impacts of marketing innovations on the OC of a market leader, taking into consideration managerial attitudes to its future, is needed. 1.2 Research Questions This study seeks to answer the following questions: What kind of OC does the market leader have? How is it, if at all, impacted by the recent marketing innovation? What is the managers’ attitude towards the future of the recent marketing innovation, with regards to the OC? To what extend is the market leader aware of the possible future impacts on the OC? 2. Aim and objectives 2.1 Aim Explore the possible impacts of marketing innovation on Rugenwalder Muhle GmbH’s OC and examine the extent to which managers are aware of these impacts. 2.2 Objectives To examine the perception of managers and employees of the recent marketing innovation, with regards to their market leader position. To evaluate the managers attitude towards possible future impacts of the marketing innovation on the company?s OC. To determine and analyze differences between impacts that the implementation of OSM might have and impacts those other marketing innovations might have had. 3. Literature review This study will draw on the lack of analysis of the relation between marketing innovation and OC of a market leader in the German food industry. In the meat processing industry, which is a very important economic sector in Germany, the attention to such connections has been relatively little compared with the international research on this topic area (German-meat, 2010). Moreover, has research on OC and the internal communication of market leaders been limited, due to planned secrecy (Simon, 2009). Therefore literature on the general connection between OC and marketing innovation has been used and the limited findings will be enhanced by further research. 3.1 Organizational Culture (OC) For discussions on OC, there are several definitions which help us to gain a basic understanding about the area. Geertz (1973, as cited in Driskill and Brenton, 2011) defines culture as a “web of significance” that one creates for themselves within the company. OC is based on interactivity and meanings that are unique to the organization. It includes assumptions of organizational members, some at level of consciousness, but many at a deeper, unconscious level. When this is the case and employees truly identify themselves with the norms and values of the organization their actions are better aligned and this leads to greater effectiveness (Alvesson, 2002)(Driskill & Brenton, 2011). It is strongly debated if it is better to analyze an OC from an external perspective or from an internal viewpoint. To analyze just parts of OC one has to capture unique qualities of the specific company, which are reflected in values, stories, elements created through interaction and the company?s history. Furthermore it is crucial to see the negative aspects of an OC as well as the positive ones to understand it. Gaining insight to negative sides is a strong limitation to the outsider approach, as the researcher relies completely on data collected from interviews and observations. Positive aspects would be that the researcher often can see more obvious layers of OC, which could have become invisible to members of the organization; the relation between the innovation and development within an organization with respect to OC, and the management policies towards the issue also gets explained in detail to an outsider to create an understanding over the situation (Driskill & Brenton, 2011). Disadvantages would mainly be the limitation of access, possible misinterpretations of cultural data and the time limitations of the researcher. The “American approach” towards OC is also called variable approach, as the OC is seen as a variable, which is predictable and can cause specific outcomes (Dixon & Dougherty, 2010). This approach looks at internal and external parts of OC. The external parts include the variable of the national culture in which the organization is located, whereas the “German approach” focuses strongly on the members of the company and internal issues. This approach is also known as root metaphor approach. The main aspect is the process of the OC and changes that take place over time. The “German approach” sets clear limits to which observers can understand and explore an OC. Through this approach, the only possible thing is to identify and analyze parts of the OC. (Schein, 2009)(Driskill & Brenton, 2011). 3.2 Market leaders Market leaders are defined by the largest market share and highest revenue, but there are more aspects, which one should be aware of. They raise the expectations of consumers and are committed to value addition to their products (Treacy & Wiersema, 1997). It is common that market leaders reach important points of change first, which lead to success before direct competitors. The changes which enable the market leaders to differentiate themselves from their business rivals include inventions, improvements and innovations. There are also some management policy for organizational development through sharing of new insights within the company, direct problem solving and in-depth analysis of them to increase efficiency. This type of organizational culture helps in organizational development and helps an organization to stay on top of the market. It is discussed that technological change and innovations bring not only improvements of performance but also pose greater challenges to managers especially in traditional cultures. For an example, many workers are associated with this segment of German food industry. Adoption of any new technology in this situation may get some hindrances. Owing to the fact, the skill set required to adopt the technology by the existing workers may be lacking. This change in traditional technology may face opposition from the workers. So, to resolve this type of situation during incorporation of any new technological change or innovative idea in an OC needs a proper managerial level commitment. Sincere commitment of the managers is needed to resolve such new changes in the OC to achieve success for the company. (Spear, 2009; Armbruster, 2005). For most market leaders’ innovation is an important factor for continuous growth. It is evident from the organizational trends of the last decade that organizational focus has shifted from purely technological innovations to more internal and administrative innovations mostly on marketing and human resource domain. (Simon, 2009; Chen, 2006). 3.3 Marketing Innovation In the last decade the focus has changed from purely technological innovations to more internal and administrative innovations like marketing innovations (Simon, 2009) (Chen, 2006).In general economics literature innovation is defined as the ongoing process of identifying customer needs and bringing up answers to satisfy them, through a structured sequence of trials and prototypes. This method is used to minimize the risk of failures and misinterpretation of customer needs. Innovations, which serve customer needs, have a tendency to last longer and have greater effect for the company on revenue and sustainability (Euchner & Henderson, 2011). Innovations in marketing style and strategy have been excluded, by economists, from the general definitions of innovation in business. The focus has been strictly on technological innovations and process innovations. The debate on this topic is ongoing, even though the OECD (Organization for Economic Co-operation and Development) have decided in 2005 that marketing innovation is ought to be included in the context of marketing style and strategy (Schubert, 2010). However, according to Chen (2006) other authors have repeatedly warned from the insufficient evidence that has been collected about the positive effect of marketing innovation. Often it is only a matter of time until these innovations can be imitated and therefore just give a limited competitive advantage to market leaders (Chen, 2006)(Simon, 2009). Marketing innovation alone is not seen as the driver success; however it supports the financial impact of technological innovation (Schubert, 2010). Innovative marketing can provide a good platform for traditional industries, such as the meat processing industry, to underline their presence in the modern age and bring their advancements in technology to awareness of the customers (Alsamydai, Alnawas, & Yousif, 2010). This relationship has also been supported in another study on the food industry (Bhaskaran, 2006, as cited in Schubert, 2010). A recent study on marketing innovations underlined the importance to continue research on the different impacts that it can have in an organization. Also the suggestion is to develop the research further in other industries, as the study focuses on the banking industry (Alsamydai, Alnawas, & Yousif, 2010). 4. Research Methodology 4.1 Research Philosophy Schein (1985, as cited in Dixon, 2010) argues that, the development of organizational culture is not completely observable. Physical aspects such as uniforms etc. are easy to observe but more than half of the organization?s culture is just amenable with interpretive research methods (Dixon & Dougherty, 2010). The positivist philosophy adopts a very scientific approach towards research and seeks to produce law-like generalizations. Furthermore, are quantitative measurements the core to positivism, which does not suit the aims and objectives of this study (Saunders, Lewis, & Thornhill, 2009). Therefore the interpretivism is the adequate research philosophy. It has its emphasis on the way that human beings behave, and respond to different factors; in this study the complexity of the organizational culture and the new ways of communication with the consumer create circumstances which cannot be defined as unchangeable but rather as the interconnection of subjective meanings and social reality (Bryman & Bell, 2007). Furthermore interpretivism is using small samples. Going into detail about one company requires this philosophy, as to understand the connections within the organizational culture (Saunders, Lewis, & Thornhill, 2009). 4.2 Data Collection The aim of this study is to explore the impacts, if any, of the marketing innovations on the organizational culture of a market leader. To acquire the necessary data the multi-method qualitative data collection is best suited, as quantitative data would not give the necessary understanding of the vivid nature of organizational culture and therefore outcomes would be inaccurate (Coleman & Briggs, 2007). Moreover in research on organizational culture the qualitative data is widely preferred (Dixon & Dougherty, 2010). Semi-structured interviews and observations would be used as data collection tools. This is most adequate to capture the data about the organizational culture, as it is not measurable and hard to grasp through surveys or questionnaires (Manson, 1996)(Saunders, Lewis, & Thornhill, 2009). Observation method will also be applied, as it will add to the results of the research. The observations will be made on behavior of interviewees and the dynamics of the organizational culture (Axinn & Pearce, 2006). Proper planning will be necessary for the collection of primary data. The ethical standards for every study on OC must be especially high to prevent bias of the findings, especially as the researcher is an outsider to the organization (Driskill & Brenton, 2011). 4.2.1 Sampling method The sampling method in this study will be a combination of purposive and snowball methods. The initial contact is within the management and marketing department, but to analyze an OC it is crucial to get a more overall picture of the employees (Driskill & Brenton, 2011). Therefore the researcher needs to go beyond the top management and marketing department, to capture a less bias picture of the impacts that the marketing innovation may have. So, the target audience for the interviews will be from both management as well as non-management level employees of Rugenwalder. Here the purposive selection is proposed to be useful as the researcher is working with small sample size (Saunders, Lewis, & Thornhill, 2009). Three sets or groups of interviews will be conducted with target respondents. The management and marketing level respondents will be selected by purposive method (Kothari, 2008, p.15) and the other non-managerial staffs to be interviewed will be selected by the snowball sampling method. A minimum sample of 30 respondents will be interviewed with 10 respondents in each group. The three different groups will be made according to the organizational responsibilities of the target respondents i.e. management staffs, marketing staffs and non-managerial employees. These interviews will be conducted with the help of questionnaires having a semi-structured format. It will help to probe the responses of the respondent for greater insights about the research problem. 4.3 Data Analysis Based on the secondary study of the internet researches and reviews, an analysis can be generated regarding how Rugenwalder is using the social networking sites and how the new marketing style is benefiting the company in marketing its products and attract new customers. The comments and views of the employees, as obtained from the internet based study, would be analyzed to find out how the traditional culture of the organization has opened up to new approaches of marketing, accepting new innovations which are ultimately reaching out to more consumers than before. This observation method will enable the researcher to do the qualitative analysis during the phase of secondary research; the researcher will be also able to understand about the finer nuances of OC within the German food industry. Whereas, the primary research method will help the researcher to get the personal views from the target respondents associated with the management level and marketing department of Rugenwalder. But to avoid the bias answers of the top level management employees the interviews from the non-management level staffs will help to get a clear picture about the OC of the organization. The open ended questions of the researcher will help in qualitative analysis of the subject to address the objective of the research. On the other hand, the close ended questions will help to quantify the data and help in quantitative analysis by presenting graphs, tables, etc. So, by using both the secondary and primary research method the researcher will be able to find answers for the research questions of the study. This mix of both the methods will also enable the researcher to present both qualitative as well as quantitative analysis to justify the answers for the research questions. 4.3.1 Validity and reliability During answering the research questions there remains a possibility of committing mistakes. To avoid these mistakes the research design must emphasize on two aspects namely the reliability and validity of data. The precision of the study is referred by validity. This mainly emphasizes on the fact that the findings of the research are reflecting the same information which can be observed in real market scenario. Whereas, reliability of the study refers to the fact that if the study would be repeated it would generate similar findings i.e. the research findings should be consistent. The validity of the study can be achieved by comparing different sources by cross checking the data. It also enables the researcher to examine the consistency of the data. 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