Abstract
Strategy scholars have long debated the value of formal planning, and research has offered inconsistent support for planning to enhance firm performance. Given these mixed empirical effects, we draw from the resource-based view of the firm to illustrate a paradox firms may face. In particular, a strong marketing planning capability may not only reduce the incidence of postplan improvisation but also contain inherent process rigidity. Since both of these can also increase performance, results illustrate a performance paradox in marketing planning.
Similar content being viewed by others
References
Ahuja, Gautam and Curba M. Lampert. 2001. “Entreprenuership in the Large Corporation.”Strategic Management Journal 22: 521–543.
Aiken, Leona S. and Stephen G. West. 1991.Multiple Regression: Testing and Interpreting Interactions. Newbury Park, CA: Sage.
Ansoff, H. Igor. 1991. “Critique of Henry Mintzberg’s ‘The Design School: Reconsidering the Basic Premises of Strategic Management’.”Strategic Management Journal 12: 449–461.
Bagozzi, Richard P. and Hans Baumgartner. 1994. “The Evaluation of Structural Equation Models and Hypothesis Testing.” InPrinciples of Marketing Research. Ed. Richard P. Bagozzi. Cambridge, MA: Blackwell, 386–422.
Barnett, Michael L. 2003. “Falling off the Fence? A Realistic Appraisal of a Real Options Approach to Corporate Strategy.”Journal of Management Inquiry 12 (2): 185–196.
Barney, Jay B. 1991. “Firm Resources and Sustained Competitive Advantage.”Journal of Management 17: 99–120.
Bollen, Kenneth and Richard Lennox. 1991. “Conventional Wisdom on Measurement: A Structural Equation Perspective.”Psychological Bulletin 110 (2): 305–314.
Bourgeois, L. J. 1980. “Strategy and Environment.”Academy of Management Review 5 (1): 25–39.
Brews, Peter J. and Michelle R. Hunt. 1999. “Learning to Plan and Planning to Learn: Resolving the Planning School/Learning School Debate.”Strategic Management Journal 20: 889–913.
Carlsson, Bo. 1989. “Flexibility and the Theory of the Firm.”International Journal of Industrial Organization 7: 179–203.
Chandler, Alfred D. 1962.Strategy and Structure. Cambridge, MA: MIT Press.
Chin, Wynne W. 1998. “Issues and Opinion on Structural Equation Modeling.”MIS Quarterly 22 (March): vii-xvi.
— 2000. “Partial Least Squares for Researchers: An Overview and Presentation of Recent Advances Using the PLS Approach.” Working paper, University of Houston, Texas.
Cohen, Patricia, Jacob Cohen, Jeanne Teresi, Margaret Marchi, and C. Noemi Velez. 1990. “Problems in the Measurement of Latent Variables in Structural Equations Causal Models.”Applied Psychological Measurement 14: 183–196.
Cooper, Robin and Robert S. Kaplan. 1988. “Measure Costs Right: Make the Right Decisions.”Harvard Business Review 66: 96–103.
Das, T. K. and B. Elango. 1995. “Managing Strategic Flexibility: Key to Effective Performance.”Journal of General Management 20 (3): 60–75.
Day, George S. 1994. “The Capabilities of Market-Driven Organizations.”Journal of Marketing 58 (4): 37–52.
— and Prakash Nedungadi. 1994. “Managerial Representations of Competitive Advantage.”Journal of Marketing 58 (2): 31–44.
Denison, Daniel R., Robert Hooijberg, and Robert E. Quinn. 1995. “Paradox and Performance: Toward a Theory of Behavioral Complexity in Managerial Leadership.”Organization Science 6 (5): 524–540.
Diamantopoulos, Adamantios and Heidi M. Winklhofer. 2001. “Index Construction With Formative Indicators: An Alternative to Scale Development.”Journal of Marketing Research 38 (2): 269–277.
Dickson, Peter R. 1992. “Toward a General Theory of Competitive Rationality.”Journal of Marketing 56: 69–83.
— 1997.Marketing Management. 2d ed. Fort Worth, TX: Dryden.
— 2003. “The Pigeon Breeders’ Cup: A Selection on Selection Theory of Economic Evolution.”Journal of Evolutionary Economics 13: 259–280.
Dougherty, Deborah. 1992. “Interpretive Barriers to Successful Product Innovation in Large Firms.”Organization Science 3: 179–202.
Eisenhardt, Kathleen M. 1989. “Making Fast Strategic Decisions in High Velocity Environments.”Academy of Management Journal 32 (2): 1504–1511.
—. 2000. “Paradox, Spirals, Ambivalence: The New Language of Change and Pluralism.”Academy of Management Review 25 (4): 703–705.
— and Behnam N. Tabrizi. 1995. “Accelerating Adaptive Processes: Product Innovation in the Global Computer Industry.”Administrative Science Quarterly 40: 84–110.
— and B. J. Westcott. 1988. “Paradoxical Demands and the Creation of Excellence.” InParadox and Transformation: Toward a Theory of Change in Organization and Management. Eds. R. E. Quinn and K. S. Cameron. Cambridge, MA: Ballinger, 169–194.
Evans, J. Stuart. 1991. “Strategic Flexibility for High Technology Manoeuvres: A Conceptual Framework.”Journal of Management Studies 28: 69–89.
Fornell, Claes and Fred L. Bookstein. 1982. “Two Structural Equation Models: LISREL and PLS Applied to Consumer Exit-Voice Theory.”Journal of Marketing Research 19 (November): 440–452.
— and David F. Larcker. 1981. “Evaluating Structural Equation Models With Unobservable Variables and Measurement Error.”Journal of Marketing Research 18 (February): 39–50.
—, Gerard J. Tellis, and George M. Zinkhan. 1982. “Validity Assessment: A Structural Equations Approach Using Partial Least Squares.” InAn Assessment of Marketing Thought & Practice. Eds. B. J. Walker, W. O. Bearden, W. R. Darden, P. E. Murphy, J. R. Nevin, J. C. Olson, and B. A. Weitz. Chicago: American Marketing Association, 405–409.
Fredrickson, James W. 1984. “The Comprehensiveness of Strategic Decision Processes: Extension, Observations, Future Directions.”Academy of Management Journal 27 (2): 445–466.
— and Anthony L. Iaquinto. 1989. “Inertia and Creeping Rationality in Strategic Decision Processes.”Academy of Management Journal 32 (3): 516–542.
Galbraith, Craig S. 1990. “Transferring Core Manufacturing Technologies in High-Technology Firms.”California Management Review 32: 56–70.
Grant, Robert M. 1991. “The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation.”California Management Review 33 (3): 114–135.
Hannan, Michael T. and John H. Freeman. 1984. “Structural Inertia and Organizational Change.”American Sociological Review 29: 149–164.
Harrigan, Kathrun R. 1985.Strategic Flexibility. Lexington, MA: Lexington Books.
Hedberg, Bo. 1981. “How Organizations Learn and Unlearn.” InHandbook of Organizational Design. Eds. P. C. Nystrom and W. H. Starbuck. London: Oxford University Press, 3–27.
Hulland, John. 1999. “Use of Partial Least Squares (PLS) in Strategic Management Research.”Strategic Management Journal 20: 195–204.
Ireland, R. Duane, Michael A. Hitt, Richard A. Bettis, and Deborah Auld de Porras. 1987. “Strategy Formulation Processes.”Strategic Management Journal 8: 469–485.
Jarvis, Cheryl B., Scott B. Mackenzie, and Philip M. Podsakoff. 2003. “A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research.”Journal of Consumer Research 30 (September): 199–218.
John, George and John Martin. 1984. “Effects of Organizational Structure of Marketing Planning on Credibility and Utilization of Plan Output.”Journal of Marketing Research 21 (May): 170–183.
Johnson, Jean L., Ruby Pui-Wan Lee, Amit Saini, and Bianca Grohmann. 2003. “Market-Focused Strategic Flexibility.”Journal of the Academy of Marketing Science 31 (Winter): 74–89.
King, William R. 1983. “Evaluating Strategic Planning Systems.”Strategic Management Journal 4: 263–277.
Leonard-Barton, Dorothy. 1992. “Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development.”Strategic Management Journal 13: 111–125.
Levinthal, Daniel and James G. March. 1993. “The Myopia of Learning.”Strategic Management Journal 14: 95–112.
Levitt, Barbara and James G. March. 1988. “Organizational Learning.”Annual Review of Sociology 14: 319–340.
Lewis, Marianne W. 2000. “Exploring Paradox: Toward a More Comprehensive Guide.”Academy of Management Review 25 (4): 760–776.
Lodish, Leonard M. 1986.Advertising and Promotion: Vaguely Right or Precisely Wrong? New York: Oxford University Press.
March, James G. 1981. “Footnotes to Organizational Change.”Administrative Science Quarterly 26: 563–577.
— 1991. “Exploration and Exploitation in Organizational Learning.”Organization Science 2: 71–87.
— and Herbert A. Simon. 1958.Organizations. New York: John Wiley.
McCann, Joseph E. and Luis Gomez-Mejia. 1992. “Going ‘On-Line’ in the Environmental Scanning Process.”IEEE Transactions on Engineering Management 39 (November): 394–399.
Menon, Anil, Sundar G. Bharadwaj, Phani Tej Adidam, and Steven W. Edison. 1999. “Antecedents and Consequences of Marketing Strategy Making.”Journal of Marketing 63 (April): 18–40.
—— and Roy Howell. 1996. “The Quality and Effectiveness of Marketing Strategy.”Journal of the Academy of Marketing Science 24 (4): 299–313.
Miller, Chet C. and Laura B. Cardinal. 1994. “Strategic Planning and Firm Performance: A Synthesis of More Than Two Decades of Research.”Academy of Management Journal 37 (6): 1649–1665.
Miller, Danny and Peter H. Friesen. 1983. “Strategy Making and Environment: The Third Link.”Strategic Management Journal 4 (3): 221–235.
Miner, Anne S., Paula Bassoff, and Christine Moorman. 2001. “Organizational Improvisation and Learning: A Field Study.”Administrative Science Quarterly 46: 304–337.
Mintzberg, Henry. 1994.The Rise and Fall of Strategic Planning. New York: Free Press.
— 1990. “The Design School: Reconsidering the Basic Premises of Strategic Management.”Strategic Management Journal 11 (3): 171–195.
Moorman, Christine and Anne S. Miner. 1998. “The Convergence of Planning and Execution: Improvisation in New Product Development.”Journal of Marketing 62 (July): 1–20.
Nunnally, Jum C., 1978.Psychometric Theory 2d ed. New York: McGraw-Hill.
Nutt, Paul C. 1989. Selecting Tactics to Implement Strategic Plans.Strategic Management Journal 10: 145–161.
Piercy, Nigel F. 1987. “The Marketing Budgeting Process: Marketing Management Implications.”Journal of Marketing 51 (October): 45–59.
— and Neil A. Morgan. 1994. “The Marketing Planning Process: Behavioral Problems Compared to Analytical Techniques in Explaining Marketing Plan Credibility.”Journal of Business Research 29: 167–178.
Powell, Thomas C. 1992. “Organizational Alignment as Competitive Advantage.”Strategic Management Journal 13 (2): 119–134.
Ramanujam, Vasudevan, N. Venkatraman, and John C. Camillus. 1986. “Multi-Objective Assessment of Effectiveness of Strategic Planning.”Academy of Management Journal 29 (2): 347–372.
Robinson, Richard B. and John A. Pearce. 1983. “The Impact of Formalized Strategic Planning on Financial Performance in Small Organizations.”Strategic Management Journal 4 (3): 197–207.
Sanchez, Ron. 1995. “Strategic Flexibility in Product Competition.”Strategic Management Journal 16: 135–159.
Simon, Herbert A. 1976. “From Substantive to Procedural Rationality.” InMethod and Appraisal in Economics. Ed. Spiro J. Latsis Cambridge, UK: Cambridge University Press, 129–148.
—, 1991. “Bounded Rationality and Organizational Learning.”Organization Science 2 (1): 125–134.
— 1993. “Strategy and Organizational Evolution.”Strategic Management Journal 14: 131–142.
Simonson, Itamar and Barry M. Staw. 1992. “Deescalation Strategies: A Comparison of Techniques for Reducing Commitment to Losing Courses of Action.”Journal of Applied Psychology 77 (4): 419–426.
Sinha, Deepak K. 1990. “The Contribution of Formal Planning to Decisions.”Strategic Management Journal 11: 479–492.
Smith, J. Brock and Donald W. Barclay. 1997. “The Effects of Organizational Differences and Trust on the Effectiveness of Selling Partner Relationships.”Journal of Marketing 61 (January): 3–21.
Srivastava, Rajendra K., Tasadduq A. Shervani, and Liam Fahey. 1998. “Market-Based Assets and Shareholder Value: A Framework for Analysis.”Journal of Marketing 62 (January): 2–18.
Staw, Barry M. 1981. “The Escalation of Commitment to a Course of Action.”Academy of Management Review 6 (October): 577–587.
Sutton, Howard. 1990.The Marketing Plan in the 1990s. Report No. 951. New York: The Conference Board.
Venkatraman N. and J. Prescott. 1990. Environment-Strategy Coalignment: An Empirical Test of Its Performance Implications.Strategic Management Journal 11: 1–23.
Walker, Orville C., Harper W. Boyd, and Jean-Claude Larreche. 1996.Marketing Strategy: Planning and Implementation. Chicago: Irwin.
Weick, Karl E., 1996. “Drop Your Tools: An Allegory for Organizational Studies.”Administrative Science Quarterly 41: 301–313.
Wernerfelt, Birger. 1984. “A Resource-Based View of the Firm.”Strategic Management Journal 5: 171–180.
Whyte, Glen. 1986. “Escalating Commitment to a Course of Action.”Academy of Management Review 11: 311–321.
Wold, Herman. 1975. “Path Models With Latent Variables: The NIPALS Approach.” InQuantitative Sociology Eds. H. M. Blalock, A. Aganbegian, F. M. Borodkin, R. Boudon, and V. Cappecchi. New York: Academic Press, 307–357.
— 1985. “Partial Least Squares.” InEncyclopedia of Statistical Sciences, Vol. 6 Eds. S. Kotz and N. L. Johnson New York: John Wiley, 581–591.
Zinkhan, George M., Erich Joachimsthaler, and Thomas Kinnear, 1987. “Individual Differences and Marketing Decision Support System Usage and Satisfaction.”Journal of Marketing Research 24 (2): 208–214.
Author information
Authors and Affiliations
Additional information
Rebecca J. Slotegraaf (rslotegr@indiana.edu) is an assistant professor of marketing in the Kelley School of Business at Indiana University. Her research focuses on the nature and effect of organizational resources, marketing capabilities, and deployment actions on competitive advantage. She received her Ph.D. from the University of Wisconsin-Madison. In addition to this publication in theJournal of the Academy of Marketing Science, she has also published several articles in theJournal of Marketing Research.
Peter R. Dickson (dicksonp@fiu.edu) is the Knight-Ridder Eminent Scholar in Global Marketing at Florida International University. He was previously the Arthur C. Nielsen Jr., Chair of Marketing Research at the University of Wisconsin-Madison and before that the Crane Professor of Strategic Marketing and a professor of industrial design at the Ohio State University. He received his Ph.D. from the University of Florida. Thirty of his articles on buyer and seller behavior have been published in leading marketing journals.
Rights and permissions
About this article
Cite this article
Slotegraaf, R.J., Dickson, P.R. The paradox of a marketing planning capability. JAMS 32, 371–385 (2004). https://doi.org/10.1177/0092070304265217
Issue Date:
DOI: https://doi.org/10.1177/0092070304265217