The Contingency Approach:

Y. Y^ -a . . ' ^ 1 i^-^ .g

^ , The
Contingency

Its l^oundations and Relevance

A poc p r ah

to Theory Building and Research in Marketing by

Valarie A. Zeithaml
Duke University, Durham, North Carolina,

P. "Rajan" Varadarajan
Texas A&M University, and

Carl P. Zeithaml
University of North Carolina, Chapel Hill

Introduction During the 1960s, management theory and research began to adopt a new orientation, one that embodied a remarkably simple concept and enabled significant advancements in the study of management and organisations. This orientation, now referred to as the contingency approach, emphasises the importance of situational influences on the management of organisations and questions the existence of a single, best way to manage or organise. Today, the contingency approach dominates theory and research in the management literature.

Contingency approaches are positioned within management as mid-range theories between the two extreme views which state eier that universal principles of organisation and management exist or that each organisation is unique and each situation must be analysed separately. The contingency approach entails identifying commonly recurring settings and observing how different structures, strategies and behavioural processes fare in each setting[l]. Prominent contingency theories have been proposed and tested relating to organisational environments, characteristics and structures [2,3,4,5,6], competitive conditions and organisational strategies[1,7,8,9], and organisational characteristics and behavioural processes[10,ll,12]. In addition to explicit use by many authors, the contingency approach has been an underlying theme for theory buildhig and research throughout the management literature [9]. The contingency approach to theory building and research can be useful to marketing scholars in at least two important ways. First, the management literature

European Joumal of Marketing 22,7 38

offers a variety of established contingencyframeworkswhich may contribute directly to the development and content of marketing theory. At least three sub-disciplines within management organisation theory, strategic management and organisational behaviour provide contingency theories with potential value for marketers. In addition, several existing contingency theories have extensive research traditions which may represent an empirical foundation for research in related marketing areas [13]. Second, consistent with recent appeals in the marketing literature[14,15], the contingency approach offers an alternative technique for generating marketing theory. Although situational factors (e.g. the stage of the product life cycle) have been recognised in certain areas of marketing theory and practice, they have not generally been included as primary concepts in theoretical frameworks. Through the contingency perspective, marketing concepts and variables may be systematically related both in theory and research. The perspective should provide marketers with another avenue to pursue problems and issues that are unique to the marketing discipline. The purposes of this article, therefore, are to describe the contingency approach and to demonstrate its value for marketing. Specific objectives are: (1) to delineate the contingency approach to theory development; (2) to outline several established contingency theories within the management discipline and highlight the research they have stimulated on related topics in marketing; (3) to provide an assessment of the current state of the contingency approach in marketing literature, and (4) to review the major issues associated with use of the contingency approach.

The Contingency Approach to Theory Development

The contingency approach to management has its roots in general systems theory and the open systems perspective[16,17,18,19], as well as in the Simon-March-Cyert stream of theory and research[20,21,22]. Thompson[5] recognised the intersection of these traditions and extended them in a landmark work that represents a cornerstone of the contingency approach. These foundation concepts are described briefly in the next section, and are followed by a discussion of current perspectives on the contingency approach. Theoretical Foundations The open systems perspective views the complex organisation as a set of interdependent parts that, together, constitute a whole which, in tum, is interdependent with some larger environment. The interactive nature of the elements within the organisation and between the oi:ganisation and the environment result in at least two open system characteristics that are central to the contingency approach: adaptation and equifinality. First, the principle of adaptation asserts that the elements within the system adapt to one another to preserve the basic character of the system. Second, the principle of equifinality

holds that a system can reach the same final state from differing initial conditions The and by a variety of paths. Contingency The Simon-March-Cyert stream of work adds to the open systems perspective Approach the view that organisations are problem-facing and problem-solving entities. The organisation develops processes for searching, learning and deciding processes that attempt to achieve a satisfactory level of performance under norms of bounded rationality. Organisational decision-makers undertake rational decision processes ^ ^ ^ ^ ^ ^ ^ ^ designed to cope with the complexity and uncertainty of their situations, all of which result in deliberate decisions by using a satisficing criterion for performance. In marketing, Alderson[19] highlighted the need to observe and conceptualise marketing agencies and their relationships as components of a system. Building on the work of Alderson, Nicosia[23] addressed the merits of viewing marketing as a system of structural and dynamic relationships. In his view, systems conceptualisations of phenomena constitute attempts to identify the properties stemming from the modes by which entities mutually relate, making them preferable to conceptualisations that deal only with individual entities. Nicosia[23] provides an extensive treatise on Alderson's conceptualisation of marketing as a complex ecological system engaged in economic operations. He also presents a set of major postulates of the functionalist approach pertaining to the formation and persistence of systems and the system's major structures. Although contingency approaches began to emerge almost simultaneously from a variety of sources[19,24,25,2,10,3,6], Thompson[5] forged much of the theoretical superstructure of the contingency perspective. Integrating and extending previous work, Thompson conceived of complex organisations as open systems faced with uncertainty tliat are, at the same time, subject to a rationality criterion. He argued that differences in technological and environmental dimensions result in differences in structures, strategies and decision processes. Thompson operationalised these dimensions through the use of a technological typology and simple, yet powerful, 2x2 matrices, techniques that have become standard in contingency theory development. Contingent on the situational factors within these frameworks, Thompson proposed a set of organisation and decision strategies which provide the organisation a degree of self-control despite interdependence with the environment. Current Perspectives on the Contingency Approach As derived from these conceptual antecedents, the essential premise of the contingency approach is that effectiveness, broadly defined as organisational adaptation and survival[26], can be achieved in more than one way. For example, management theorists and researchers have recognised more than one way to organise effectively, more than one strategy that maximises profitability and market position, and more than one leadership style that achieves organisational goals. Each way is not equally effective under all conditions; certain organisational actions or responses are more appropriate than others, depending on the situation[27]. The contingency approach suggests, therefore, that we can observe wide variations in effectiveness, but that these variations are not random. Effectiveness

European Joumal of Marketing 22,7

depends on the appropriate matching of contingency factors with internal organisational designs that can allow appropriate responses to the environment. Theoretical and practical contributions are achieved through: (1) identifying important contingency variables that distinguish between contexts; (2) grouping similar contexts based on these contingency variables, and (3) determining the most effective internal organisational designs or responses in each major group. These contingency theory-building steps involve three types of variables; contingency variables, response variables and performance variables. Contingency variables represent situational characteristics usually exogenous to the focal organisation or manager. In most instances, the opportimity to contix)l or manipulate these variables is, at best, limited and indirect. In contrast, response variables are the organisational or managerial actions taken in response to current or anticipated contingency factors. Performance variables are the dependent measures and represent specific aspects of effectiveness that are appropriate to evaluate the fit between contingency variables and response variables for the situation under consideration. These steps typically result in contingency theories that focus primarily on outcome or content issues, rather than on processes. They attempt to determine the organisation structure, strategy or leadership style to be used in a particular situation, but do not emphasise the dynamics of the process by which an organisation adapts or a leader becomes effective [28]. This point will receive further elaboration later in this article. Specific contingency frameworks have been conceptually derived[29,2,11,4,5] and empirically derived[24,l,6]. Considerable effort in many of these works has been directed towards the identification of important contingency variables within the major sub-disciplines of management. Many contingency frameworks, particulariy in the early phases of development, employ a single dimension (e.g. level of environmental uncertainty, type of technology, organisational size, stage of the product life cycle), or construct 2x2 matrices that dichotomise two critical contingencies (e.g. envirorunental complexity and stability, growth rate and market position). The current trend, however, is to expand these frameworks through the development of contingency theories that employ multiple dimensions or contingency variables[l,9]. Although the added complexity of these recent formulations may lessen the straightforward appeal of simpler fameworks, they allow greater precision in the determination of high-performance response variables. Table I summarises the previous discussion through examples of selected contingency approaches and their characteristics. Although this table is far from an exhaustive list of contingency approaches, it provides a general overview of representative frameworks. The next section is designed to expand on this theme by outlining several contingency theories relevant to marketing in more detail.

40

Author Burns and Stalker [24] Chandler [25]

Source Organisation theory Organisation theory and strategic management Organisation theory

Contingency Variablesis) Markets and technology: stable vs. changing Growth strategy; internal growth diversification

Response Variables Management Style: Organic style Mechanistic style Structure: centralised, functional vs. decentralised multidivisional Structure: tall vs. flat design Structure: differentiation and integration Structure: bureaucracy flexibility

The Contingency Approach

41

Woodward

[6]
Lawrence and Lorsch

Organisation theory Organisation theory

Technological type: custom mass production continuous process Task environment: uncertainty Technological type: craft routine non-routine engineering Stage of the product life cycle Industry competitive forces

[3]
Perrow

[4]

Hofer

[8]
Porter

Strategic management Strategic management

Business strategy: Business strategy: differentiation focus cost leadership Business strategy: differentiation asset parsimony cost-efficiency scale/scope Leadership style: considerate task-orientated

[9]
Hambrick [17]

Strategic management

Environmental dimensions

Fiedler [10]

Organisational Behaviour

House [11]

Organisational Behaviour

Task structure leader-member relations leader position power Subordinate needs task characteristics

Leader behaviour: directive supportive achievementparticipative Decision style: autocratic consultative group

Vroom and Yetton [12]

Organisational behaviour

Decision situation characteristics

Table I. Selected Contingency Frameworks

Contingency Streams in Management and their Parallels in Marketing Contingency approaches to theory building and research prevail in three major management sub-disciplines:

European Journal of Marketing 22,7 42

(1) organisation theory, which focuses on the relationship between the external environment, organisation design, and the organising process; (2) strategic management, which concentrates on the formulation and implementation of organisational goals, strategies and plans; and (3) organisational behaviour, which is concerned with the role of individuals and groups within the organisation. Several existing theories have contributed to theory buDding and research within related areas of marketing. This section briefly discusses contingency perspectives in each of these sub-disciplines and their parallels in marketing. Contingency Approaches in Organisational Theory and Marketing Organisation Design In organisation theory, the organisation and its units are conceptualised as subsystems of individuals performing tasks designed to achieve a variety of organisational, group and individual goals. The major emphasis within this discipline has been to identify the organisational designs or structures (i.e. the patterns of interactions among individuals) that promote organisational adaptation to environmental, technological and information-processing contingencies. Environmental contingencies were highlighted in the landmark research of Bums and Stalker[24], Lawrence and Lorsch[3] and Duncan[29], while technology and organisation were examined by Woodward [6], Thompson [5], and Fry and Slocum[30]. The primary proponent of the relationship between information processing requirements and organisational design has been Galbraith[31,27]. Contingency perspectives from organisational theory have been used in marketing organisation contexts [32,33,34,35]. Many contingency approaches within organisation theory emphasise moderating effects of environmental characteristics on the relationship between organisation structure and effectiveness [24,36,29,27,3,37,5]. In a synthesis of this work, Weitz and Anderson[32] developed a model for the design of the marketing function. This model was based on the contingency perspective that the structure of the marketing function depends on the environmental situation. Consistent with the organisational theory literature, their approach matches environmental characteristics (i.e. complexity, unpredictability, interconnectedness) with organisational characteristics (i.e. differentiation and integration) to suggest when functional, decentralised, brand management and matrix organisations are appropriate. Figure 1 reproduces the Weitz and Anderson Structure-Environment Match Model, illustrating their adaptation of the 2x2 contingency matrix commonly used in organisation theory. The environmental dimensions (contingency variables) are expressed from low to high along the horizontal and vertical axes. The proposed organisation design characteristics (i.e. high vs. low differentiation, conventional vs. unconventional integration methods) are ones that theory and research suggest are consistent with the different environments. The authors then prescribe for each cell (different environments) the response variables (appropriate ways to design the marketing function) appropriate to each combination of design characteristics.

High Decentralised organisation 1 Matrix organisation II

The Contingency Approach 43

High differentiation Conventional integration methods Complexity of environment Functional organisation III

High differentiation Unconventional integration methods Brand management IV

Low differentiation Conventional integration methods Low

Low differentiation Unconventional integration methods

High Low Unpredictability, interconnectedness o ^ n v i r o n m e n t Source: Weitz and Anderson[32]. i-^,

Figure 1. Weitz and Anderson's Structure-Environment Match Model

In another study, Nonaka and Nicosia[33] focus on optimal marketing management organisational structures for processing information generated by the market environment. They view the marketing department as a processor of market information and propose that the best organisation for processing environmental information is one that matches the variety of the environment. A simple centralised marketing department organisation is posited to be sufficient to process homogenous and certain environmental information. A complex, decentralised marketing department is viewed as appropriate to process heterogeneous and uncertain environmental information. Ruekert, Walker and Roering[34] propose a contingency framework of marketing task structure and performance, in which the performance outcome of marketing activities is viewed as dependent on the nature of the task, the way in which the task is organised and the nature of its environment. The authors outline contingency theory propositions pertaining to organisation and efficiency, formalisation and efficiency, centralisation and effectiveness, and specialisation and adaptiveness. The authors also identify four archetypal structures that emerge from these propositions and discuss their implications to marketing management. Contingency Approaches in Strategic Management and Strategic Marketing The management sub-discipline of strategic management, a field closely related to marketing strategy, employs the contingency approach as the primary theorybuilding technique for its study of business strategy. This sub-discipline focuses on strategies that specific businesses formulate and implement to compete in an industry or product/market segment. Hambrick[l] argues that contingency

European Joumal of Marketing 22,7

approaches are particularly useful for business strategy because past research has either: (1) viewed strategy as an art and conducted in-depth case studies of individual firms, an approach which lacked generality, or (2) sought universal laws of strategy and investigated them through database research such as PIMS (Profit Impact of Market Strategies), an approach that originally de-emphasised key contextual differences' Contingency approaches to theory and research in strategy represent a middle ground between these extremes, improving the generalisability of the former, while obtaining richer characterisations than the latter[38]. The contingency approach in strategy literature holds that the appropriateness of different strategies are contingent on competitive settings of businesses. The competitive setting is typically defined in terms of environmental and/or organisational contingencies, as evidenced by the following research thrusts: (1) The appropriateness of pursuing alternative strategies under various environmental contingencies for example, strategies for competing in stagnant industries[39]; declining industries[40]; hostile environments[41]; fragmented, mature and declining industries[9]; different stages of the product's life cycle[42,43]. (2) The appropriateness of pursuing alternative strategies under various organisational contingencies for example, strategies for high market share businesses [44]; low market share businesses [45]; effective low market share businesses[46,47,48]; market leaders, challengers, followers and nichers[43]. (3) The appropriateness of pursuit^ alternative strategies under various environmental and organisational contingencies for example, strategies for leaders and followers in low and high-growth markets [49, pp. 175-8]; generic strategy options for varying levels of market attractiveness and relative competitive position[49, pp. 204-5]. Many recent contingency approaches to business unit strategy formulation view both environmental and organisational variables as relevant contextual variables. This tendency is apparent in the contingency models adapted for practitioner use: BCG growth-share matrix, GE/McKinsey Business Screen, and the Shell Directional Policy Matrix (see Wind and Mahajan[50] for a critical review). Similarly, in the strategy matrix (contingency framework) outlined by Day[49], the appropriate generic strategyfijomthe standpoint of a firm is contingent on market attractiveness (high, medium or low) and relative competitive position of the firm (strong, medium or weak). Day cautions that generic strategy options matrices are suggestive, rather than substitutes for careful analysis of feasible strategic options for each business segment. However, he also emphasises that, because choice of strategy must be grounded in the realities of the situation facing each business, the compatibility of the chosen strategy with the normative generic strategy option should be tested (pp. 204-5).

44

Recent work by Hambrick[l,7] illustrates a contingency approach to business The strategy that employs multiple environmental and organisational dimensions or Contingency contingency variables. Analysing a sample of mature industrial-product businesses Approach fi:x)m the PIMS database, Hambrick[l] empirically identified eight different settings based on a set of ten contingency factors. In a companion article, Hambrick[7] focused on two of tbe eight settings and empirically identified high and lowperforming clusters of business strategies. Hambrick's contingency approaches ^ ^ _ _ _ _ ^ ^ ^ are complex, and highlight the value of greater precision and detail in the identification of contingency settings. Without the empirically derived taxonomy of the first Hambrick article [1], the two types of businesses emphasised in the second[7] would have been pooled in a study of mature capital goods. Hambrick's[7] study illustrates how strategies associated with high profitability differ greatly in two contexts. The contingency approach in a strategic marketing context is illustrated in a recent study by Burke [51]^. She hypothesised that four general elements of the environment (tiie market, the business unit within the market, the firm and the business unit within the firm) infiuence the strategic choices made by marketing managers. Burke collected perceptual data pertaining to seven product/market and organisational context factors thought to influence strategic choices of marketing managers from 86 managers in six firms. The focal decision of interest was the strategic thrust of the business unit (i.e. significantly and permanently to increase market share, to maintain market share or to allow share to fall). Burke found that the choice of a build, hold or harvest strategy is related to the manager's perceptions of five aspects of the product/market environment and organisation context: market attractiveness, relative competitive strength, entry barriers, control over resources and the manager's perception of the relative importance of shortrun business unit performance to his/her career success and monetary rewards. Contingency Approaches in Organisational Behaviour and Marketing Behaviour Within the or^inisational behaviour literature, the contingency approach has made its most significant contribution in the area of leadership theory and research[52,ll]. Contingency approaches to leadership tie the leader's effectiveness to the nature of the situation and acknowledge that workers' needs and problems vary, requiring that leadership style match the types of individuals involved and the characteristics of their work situation. While the situational approach has been used to study leadership since the 1950s, House [11] proposed a theory of leadership that clearly illustrates the contingency approach. He contends that the functions of a leader vary depending on the needs of subordinates and the type of work to be accomplished. According to House's theory, a leader obtains good performance from his/her work unit by increasing subordinates' personal rewards firom goal attainment and by making the path to these rewards easier to follow (e.g. by instructing, reducing roadblocks and pitfalls, and increasing the opportunities for personal satisfaction along the way). To be

European Journal of Marketing 22 7

effective, the leader must tailor his/her style and approach to individual subordinates situations. In ambiguous situations (and with subordinates to whom ambiguity ^^ frustrating), effectiveness is achieved when the leadership provides structure. In routine situations, on the other hand, the additional structure provided may be viewed as redundant and insulting by subordinates, who may consequentiy become dissatisfied. In essence, the theory holds that the level of leader structure depends on the ambiguity of the task, and tiie level of leader consideration depends on the intrinsic satisfaction of the task. The theory has been elaborated and tested since it was proposed [53,54]. The contingency approach to marketing behaviour is evidenced in the works of Weitz [55] and Williams and Spiro[56]. Weitz proposed a contingency model for investigating the effectiveness of sales behaviours across customer interactions. The model postulates that effectiveness of sales behaviours across customer interactions is contingent on the salesperson's resources, the nature of the customer's buying task, the customer-salesperson relationship, and the interactions of these three sets of variables. Weitz presents contingency propositions for the moderating effects of the salesperson's resources, the customer's buying task, and the customer-salesperson relationship on the effectiveness ofthe salesperson's behaviour (i.e. adaptive sales behaviour, establishment of an influence base, use of closed vs. open influence techniques, and exerting control over the sales interaction). An Assessment of the Status of the Contingency Approach in Marketing How developed is the contingency perspective in the marketing discipline? Only a few studies, most of them detailed in the previous sections, have expliciUy employed the contingency approach. Judging from these applications, the contingency approach has yet to be firmly established in the marketing discipline. However, we contend that the implicit notion of contextual relevance of environmental and organisational variables is an underlying theme for theory building and research in numerous marketing studies. In the field of channel management, for example, Frazier and Sheth[57] focus on the contextual relevance of boundary personnel's attitude-behaviour consistency or inconsistency with respect to the appropriateness of implementing influence processes and of seeking influence objectives in distribution channel relationships. In the areas of sales force management, Futrell and Parasuraman[58] investigate the moderating effect of salesperson performance on the relationship between propensity to leave and job satisfaction. Yoon and Lilien[59] examine the contextual relevance of market situation variables to the appropriate launch time for new industrial products and best use of marketing resources. While not formally called contingency approaches, these and other marketing studies can be recast in the contingency perspective. The foundation for developing an organised body of knowledge centred on the contingency approach is already in place. Building on this foundation should allow marketers to study more precisely the relationships among contingency, response

and performance variables. Critical situational variables may be integrated into frameworks that advance theory, research and practice. Before reviewing a group of marketing studies that impUcitly represent the contingency approaches, we present evidence of the general relevance of the contingency notion for marketing. Contextual Relevance in Marketing The emergence of general research streams, such as industrial marketing, services marketing, health care marketing, industrial buying behaviour, international marketing, social marketing, marketing under various states of supply and demand, and marketing during periods of shortage, testify to marketers' realisation of the contextual relevance of contingency variables to marketing strategy formulation. Better understanding of important differences among these contexts have led to the formulation of specialised marketing strategies and marketing behaviours. Specific topics within marketing also reflect this tendency. For example, the literature on the classification of goods highlights the relevance of product characteristics and consumer behaviour variables for marketing strategy [60,61,62,63,64,65]. Although controversy surrounds the concept, the extensive body of marketing literature on marketing strategies for the product life cycle suggests that marketers view stage of the product life cycle as a contingency variable^. Finally, the emerging body of literature on strategies for high market share and low market share companies [44,45,46,47,48], marketing strategies for market leaders, challengers, followers and nichers[43], and strategies for leader and followers in high and low-growth markets[49] indicate marketing's recognition of the contextual relevance of an organisation's competitive position in strategy formulation. In particular, the marketing strategy literature has emphasised this approach. Abell[66] summarised the interrelationship between strategic variables, situation variables, company-specific variables and performance variables quite succinctly by noting that: "Strategies of Type A, in markets/situations of Type B, pursued by companies of Type C, will lead to performance of Type D. (p. 2, italics ours)''. A similar line of reasoning is also revealed in a number of empirically testable propositions pertaining to competitive marketing strategy summarised in Eliashberg and Chatterjee[67]. Illustrative of the contingency thrust of these propositions are the following (the propositions are rephrased in line with Abell's[66] generalised statement): (1) Entry-deterring product positioning strategies pursued in markets where the fixed cost of entry is high and product repositioning infeasible by earlyentrant firms will be profitable in the long run [68]. (2) Positioning the product to appeal to the larger (and more profitable) segments pursued by early entrant firms in situations where it is difficult (prohibitively expensive) for firms to change their product positioning strategies once implemented will lead to higher profits [68]. (3) Allocating the budget over all customers is the appropriate strategy for

The Contingency Approach

European Journal of Marketing 22,7 48

firms with a lai:ger budget to pursue in a duopolistic situation where the companies compete for the business of several customers whose (single) vendor choice is based on the relative sales promotion efforts of the firms. Concentrating only ?i fraction of customers, effectively ignoring the others, is the appropriate strategy for the smaller firm to pursue [69]. Along similar lines, the contextual relevance of market-situation variables for strategic choice has been highlighted by Yoon and Lilien[59]. Summarising the results of their empirical study on the effects of market characteristics and strategy on the performance of a new industrial product, the authors note: Ourfindingssuggest that two major sets of variables seem to be at work in determining the success of a new industrial product. These are market-situation variables and R&D/marketing-strategy variables. We see varying levels of success for different product types in different market situations here. And strategy variables must be tuned to the specific market situation, determining the best use of marketing resources and the best time to launch the new product (p. 143). A potential contribution of the contingency approach to the marketing management field is the integration of basic laws or principles of marketing management with relevant situational factors. Contingency propositions may be viewed as extensions of the basic principles of marketing management, thereby introducing the contingency approach as a refinement of established marketing thought. An example of this potential contribution may be found in the works of Leone and Schultz [70], and Eliashberg and Chatterjee[67]. Leone and Schultz [70], in a study of marketing generalisations, state a number of basic laws and principles of marketing. Among them are the following: (1) Selective advertising has a direct and positive influence on individual company (brand) sales. (2) Distribution, defined by a number of outlets has a positive influence on company sales (market share). Eliashberg and Chatterjee[67], in a review of analytical models of competition, present the following propositions in a contingency approach that can be viewed as extensions of the Leone and Schultz generalisations extend these generalisations in a contingency perspective: (1) A strategy of spending more on advertising by a firm with a cost advantage will generally result in a larger market share and higher profits. The best strategy for the rival firms may be to employ different competitive tools, even when the sales response to different instruments is identical for all firms [71,72]. (2) A strategy of spending more on advertising, particularly during the beginning of the planning period by the firm with the smaller sales decay parameter (a greater long-run effect of a dollar spent on advertising, relative to the rival), will result in larger profits as well as a larger terminal market share[73].

(3) Expenditure on distribution and awareness advertising should be decreased in response to new entries, unless it is possible, through a pre-emptive distribution or advertising strategy, to prevent the entry of a new brand[74]. These extensions have both scholarly and practical implications. Theorists and researchers can easily build on existing streams of literature, allowing for the coherent and systematic development in the marketing literature. Incorporating the situational variables also allows marketing practitioners to use resources more efficiently for these activities, increasing the likelihood that their firms can compete more effectively. Explicit and Implicit Contingency Approaches in Marketing Table II summarises selected contingency perspectives evidenced in marketing literature. The contextual relevance of environmental variables and/or organisational variables is the underlying theme common to all 25 studies. As previously noted, explicit reference to a contingencyfi:ameworkis made in only six[33,55,32,51,34,75]. A contingency perspective is implied in the additional 19 studies summarised in the table. These studies are intended to be illustrative rather than exhaustive, for many other marketing studies could also be viewed as contingency approaches. The examples reveal the use of an implicit contingency perspective in most areas of marketing. General marketing strategy (studies 7, 8, 9 and 15), market share strategies (10 and 11), generic competitive strategies (12), and market segmentation strategies (13 and 14) are represented. All elements of the marketing mix have been treated in the contingency perspective: product (16, 17, 21), pricing (18, 19, 20), promotion (18, 20, 21) and distribution (23, 24, 25). Examination of the table reveals that most works cited are normative/conceptual in scope, and very few are empirical in nature. This parallels the early development of the contingency perspective in the management literature, suggesting that empirical research is the next logical step. A detailed review of all relevant literature (both theoretical and empirical) pertaining to the topics covered in Table II would also aid in identifying a more comprehensive and richer set of relevant contingency variables. Major Issues Associated with Use of the Contingency Approach The contingency perspective provides an opportunity to build a body of knowledge centred on appropriate strategic choices for commonly recurring marketing settings. In order for the approach to be used effectively, certain key issues must be addressed. (1) Selection and measurement of performance variables The selection and measurement of performance variables in contingency fi^meworks will influence the match between contexts and appropriate response variables. Because organisational effectiveness can be measured in many ways (e.g. productivity, return on investment, employee job satisfaction, profit.

The Contingency Approach

European Joumal of Marketing 22,7

50

employee turnover and efficiency), different contingency frameworks have emerged to achieve the objectives. Therefore, the muldpUcity of contingency frameworks associated with organisational effectiveness is due in part to the absence of consistent definitions and operationalisations of effectiveness[76]. In using contingency approaches, performance measures should be clearly defined and widely accepted [77,78]. If possible and appropriate to the subject of interest, they should rely on multiple criteria[76]. Tosi and Slocum[26] provide a detailed discussion on the theoretical and practical implications of: (a) defining organisational effectiveness either too broadly or too narrowly, and (b) failing to realise the multi-dimensional nature of the concept of effectiveness.
Author(s) Focus Contingency Variable(s) Certainty-uncertainty of environmental information Homogeneity-heterogenity of environmental information Response Variable(s) Marketing organisation structure: Decentralised Centralised

1. Nonaka and
Nicosia [33]

Optimal organisational structures for marketing management for processing information generated by the environment (ECF; N/C) Organising the marketing function (ECF; N/C)

2.

Weitz and Anderson

[32]

Environmental complexity Environmental uncertainty Interconnectedness of elements in the environment

Marketing organisation structure differentiation and integration: Decentralised organisation Matrix organisation Functional organisation Brand management Task organisation: Internal vs. external Task structuring: Centralisation Formalisation Specialisation Marketing Organisation Structure: Internal-organic Internal-bureaucratic External-transactional External-relational Strategic choice: build, hold or harvest share

3.

Ruekert, Walker and Reoring [34]

Organisation of marketing activities (ECF; N/C)

Macro environmental conditions Task characteristics

4.

Burke [51]

Market share strategy (ECF; N/C & E)

Market attractiveness Entry barriers Perceived environmental uncertainty Relative competitive strength Reward system Synergy Exit barriers

Table II

Selected Contingency Perspectives in Marketing

5. Weitz [55]

Effectiveness of sales behaviours across customer interactions (ECF; N/Cl

Salesperson's resources Nature of customer's buying task Customer-salesperson relationship

Selling behaviours: Adapting to customers Establishing influence bases Influence techniques used Controlling the sales interaction Behaviour of marketing decision maker

The Contingency Approach

51

6. Ferrell and
Gresham

[75]

Ethical decision-making in marketing organisations (ECF; N/C)

Ethical issue Individual's characteristics Significant others Opportunity Demand state: Negative demand No demand Latent demand Faltering demand Irregular demand Full demand Over-full demand Unwholesome demand Stage of product life cycle

7. Kotler [79]

Marketing strategy (ICF; N/C)

Marketing task: Conversational marketing Stimulational marketing Developmental marketing Re-marketing Synchromarketing Maintenance marketing De-marketing Counter-marketing Marketing strategies for various stages of the product's life cycle

8. Levitt [80],

Marketing strategies (ICF; N/C) Doyle [81], Weber [82], Wasson [83], Swan and Rink [84], and many others Marketing strategies (ICF; N/C)

9. Kotler ]43]

Relative size of firm Relative competitive position of firm Buyer concentration Purchase frequency Marketing intensity Product quality Firm size Market growth rate high vs. low Firm's competitive position leader vs. follower Market attractiveness high, medium or low Relative competitive position strong. medium or weak

Marketing strategies for leaders, challengers. followers and nichers Relative emphasis firms should place on market share from the standpoint of profitability

10. Jacobson and

Aaker [85]

Market share strategy (ICF; E)

11. Day [49]

Market share strategy (ECF; N/C) +

Strategic choice: Build share Hold share Harvest share Divest business Strategy choice: Project position Invest to build Build selectively Manage for earnings Limit expansion Harvest Project and refocus Divest

12. Day [49]

Generic strategy options (ICF; N/C) +

Table II (continued) Selected Contingency Perspectives in Marketing

European Journal of Marketing 22,7

13. Kotrba [86]

Market segmentation and targeting strategies (ICF; N/C)

52

Stage of product life cycle Variability in customer needs across segments (homogenous vs. heterogeneous markets) Firm's size Firm's resource position Competitors' market segmentation and targeting strategies Customers' willingness to accept lower prices in exchange for products less tailored to their needs (great vs. limited) Potential for production and marketing economies by eliminating or fusing market segments (high vs. low) Degree of volatility of derived demand

Strategic Choice: Undifferentiated marketing Differentiated marketing Concentrated marketing

14. Resnik, Turney and Mason [87]

Market segmentation (ICF; N/C)

Strategic choice: Counter-segmentation (reverse segmentation) Further segmentation

15. Bishop, Graham Industrial marketing and Jones [88] (ICF; N/C & El

Strategic choice: Appropriate, product/ market, promotion. distribution and pricing strategies It pays to launch a RFNP as early as possible, whereas success levels are highest for an ORNP when launch is delayed somewhat Strategic Choice: Reactive strategies defensive, imitative. second but better, and responsive Proactive strategies research and development, marketing. entrepreneurial and acquisition. (The authors note that each strategy is appropriate under certain conditions and that a successful organisation recognises when each is appropriate and responds accordingly)

16. Yoon and Lilien Optimal launch time for new industrial [59] products (ICF; N/C & E)

Type of new product: Original new product (ORNP) vs. reformulated new product (RFNP)

17. Urban and Hauser [89]

New product strategies (ICF; N/C)

Firm's choice of productmarket opportunity as vehicle for growth Extent of protection for innovation Scale of market market and associated economies of scale Competition barriers to entry and relative size of competitors Firm's position and power in the production/distribution system

Table II (continued) Selected Contingency Perspectives in Marketing

18. Kotler [43]

Promotion-pricing strategies for introducing new products (ICF; N/C)

Market size Price elasticity of demand Markets' level of awareness of product Markets' state of readiness to buy product Threat of potential competition Cost dynamics scale and experience effects

Strategic Choice: Rapid skimming Slow skimming Rapid penetration Slow penetration

The Contingency Approach 53

19. Day [49]

Pricing strategies (ICF; N/C)

Price elasticity of demand Strategic Choice: Market growth rate/stage Penetration pricing of product life cycle Skimming pricing Barriers to entry Barriers to capacity expansion Cost dynamics scale and experience effects Potential for creating and maintaining superiority over competitors Nature of competition Nature of consumer demand Conditions under which a penetration price substantially below initial costs is the optimal price policy Relative emphases on product and promotion facets of marketing strategy

20. Robinson and Lakhani [90]

Pricing (ICF; E)

21. Udell [91]

Non-price competitive marketing strategy (ICF; N/C & E)

Buyer's knowledge concerning the product and its want satisfying power Effort expended by buyers to make a wise purchase Motives for purchasing the product Product complexity from the buyer's perspective Stage of product life cycle Product characteristics Economic environment Primary communications task Internal political economy internal structuring and functioning of the distribution channel External political economy the task environment of the distribution channel Attitude-behaviour consistency or inconsistency (of target) organistion's boundary personnel towards the channel programme)

22. Kotler [43]

Promotion mix strategy (ICF; N/C)

Optimal allocation of promotional effort between advertising. personal selling, sales promotion and publicity Appropriate interorganisational management strategy (for maintaining and expanding channel operations and for dealing with channel conflicts) Appropriate influence processes Appropriate influence objectives

23. Stern and Reve [92]

Marketing channels (ICF; N/C)

24. Frazier and Sheth [57]

Distribution channel management (ICF; N/C)

Table II (continued) Selected Contingency Perspectives in Marketing

European Journal of Marketing 22,7

25. Kotler [43]

Distribution strategies (ICF; N/C)

54

Market size Degree of customer concentration Purchase frequency Purchase quantity Firm's size Firm's resource position Firm's product mix Competitors' distribution strategies Product characteristics Economic factors Political/legal factors Channel characteristics

Strategic Intensive Selective Exclusive

Choice: distribution distribution distribution

Legend:

ECF Explicit contingency framework (1 to 6) ICF Implicit contingency framework (7 to 25) N/C Normative/Conceptual N/C & E Normative/Conceptual and Empirical E Empirical

Table II (continued)
Selected Contingency Perspectives in Marketing

+ The source cited[49] is intended to be illustrative. These two dimensions form the basis for a number of contingency approaches to business unit strategy formulation such as the BCG GrowthShare Matrix, the GE-McKinsey Business Screen, and the Shell Directional Policy Matrix. See, Wind and Mahajan[50] for detailed descriptions and comparisons of several portfolio models.

(2) Identification and grouping of contingency factors Effectiveness is often related to numerous contingency variables. The key is to identify the contingencies which explain the greatest variance in performance. This identification process begins with an examination of the literature for a relevant set of contingency variables based on theoretical grounds and/or prior researchfindings.A systematic plan of research can then be developed to evaluate the impact of these contingency variables, and to determine whether other contingency variables should be identified. Contingency frameworks are compelling because of their simplicity, but this simplicity may lead researchers to stop short of identifying all relevant factors. Hambrick and Lei [93] offer a method that empirically prioritises contingency variables. Based on an analysis of 636 PIMS businesses, the authors ranked ten contingency variables widely cited in the strategy literature by their relative significance. Significance was defined as the degree to which businesses that differ on that variable also exhibit major differences in how strategic attributes or actions are associated with performance. Major differences indicate the presence of a significant contingency variable [93, pp. 765-6]. Another example of consolidation of contingency variables is illustrated by Achrol, Reve and Stem's[94] discussion of framing the environment. Researchers have expressed concern about the immense inventory of environmental variables and sub-variables that may serve as contingency variables. In Achrol, Reve and Stem's view, excessive detail results in

an inventory of situational factors that limits the generalisability across situations. They propose an altemative approach, although still consistent with the contingency perspective, that entails conceptualising the environment as a dynamic but amorphous reality (without well-defined shape, size or elements) that can be characterised in terms of its abstract qualities or dimensions. For example, the following qualitative dimensions could be used to conceptualise the environment: environmental capacity (rich vs. lean); environmental homogeneity-heterogeneity; environmental stability-instability; environmental concentration-dispersion, and environmental turbulence. The practice of framing the environment in terms of its abstract qualities or dimensions is prevalent in the contingency research stream[33,32,34]. Problems associated with multiplicity of contingency variables can also be handled by first identif3Tng all relevant factors, grouping the factors into broad categories, eliminating highly interrelated variables, and empirically prioritising the remaining variables. For example, after identifying a comprehensive set of relevant factors, Hofer[8] grouped environmental and organisational contingency variables of relevance to business strategy formulation into six broad classes (a) broader environmental variables; (b) industry structure variables; (c) competitor variables; (d) supplier variables; (e) market and consumer behaviour variables, and (f) organisational characteristics and resources. From this point, interrelated variables could be eliminated and empirical prioritisation could take place. (3) Independence of contingency factors The contingency approach has been criticised in the organisation theory literature for encouraging the development of different contingency factors to represent the same phenomena[95,76]. This difficulty may stem from conceptual confusion in specifying the contingency variables [76] or from high correlations between variables. In the latter case, conceptually different models may represent the same phenomena and yield similar predictions[95]. As a case in point, Udell[91], in his study of successful marketing strategies, considered a fifth contingency variable value of typical purchase that was found to be highly intercorrelated with the other four variables and was therefore dropped from further consideration. To deal with this issue, clear conceptualisation of variables and measurement of relationships among contingencies are required. (4) Number of levels in the contingency variable The number of levels for contingency variables can be an arbitrary decision. Many of the early contingency frameworks used simple dichotomies that were difficult to justify: stable vs. changing environments[24], centralised vs. decentralised

The Contingency AoDroach -^

European Journal of Marketing 22,7 56

structure [25], routine vs. non-routine technology[4]. Some critics argue that simple dichotomies yield as much variation within contexts as between contexts. Contingency variables that are differentiated along commonly accepted guidelines are preferable to those that are arbitrarily and simplistically established. Empirical approaches such as the cluster analysis technique used by Hambrick[l] may help in dealing with this issue. (5) Deterministic view of the organisational context Most contingency theories assume that the contexts or environments in which organisations operate are fixed and outside the control of the organisation. This deterministic view of the organisational context has been challenged by theorists [27,96] who claim that variations in performance may be due in part to managerial discretion in changing the contexts. The revised view, called environmental management[27,97] or the strategic choice view[98,99,100], argues that managers have freedom to select and to influence their environments and situations, and need not merely accept them as constraints. This view does not invalidate the contingency frameworks themselves, but suggests that an organisation can move from context to context and need not merely accept its current situation. (6) Outcome models, not process models The contingency approach has been compared to stimulus-response models of the behaviourists in that they both largely ignore the processes by which a given outcome is achieved [28]. Contingency frameworks view the relationships among variables at one point in time; they are static, rather than dynamic models. They can, however, incorporate dynamic models as reasons for choosing contingency variables. Current research examining strategic decision processes has begun to integrate process models and contingency approaches [101]. (7) Post hoc inference A number of classic and current contingency frameworks were empirically derived[24,l,7,6]. Inferences based on empirical work or case analysis led to the development of these frameworks. While some scholars would argue that using data to develop theory is incorrect, Hanrigan[38] encourages multiple "hybrid" technologies for developing and testing contingency approaches. (8) Mechanistic flavour Child[102] criticised the mechanistic flavour of contingency approaches that advocated a single response to a given context. The tendency to under-emphasise or ignore the possibility of more than one feasible organisational response to the same task environmental stimulus characterised many early contingency theories[28]. More recent frameworks acknowledge that different responses may yield similar performance [1] and specify more than one organisational response where appropriate. (9) Issue of strength vs. form Schoonhoven[103] argues that a central issue for contingency theorists is "whether the environment modifies the strength or form of the relationship between strategic variables and performance''. If environment modifies only the strength of the relationship, the role of

contingency approaches would be to identify meaningful sub-environments and the relative strength of strategic variables within and across the subenvironments. On the other hand, if environment modifies the form of the relationship, the role of contingency theory would be to identify key interacting variables and establish their links to performance [13]. Moderating effects of contingency variables have been investigated in the contingency literature by including interaction variables in additive models (to examine the form ofthe relationship), and by estimating parameters of an additive model for sub-groups of the total sample (to examine the strength of the relationship)^. The issue of form vs. strength of the relationship appears to remain unresolved. Based on a review of prior empirical research and analysis of 1,638 PIMS businesses using moderated regression and subgroup analysis, Prescott[13] reports that environment modifies the strength but not the form of the strategy-performance relationship. On the other hand, the market share-profitability implications ofthe new BCG matrix[104] illustrate contingency variables that moderate the form rather than the strength of the relationship between strategy and performance*. In that matrix, the relationship between market share and profitability is viewed as being moderated by the size of the competitive advantage and the number of ways of achieving competitive advantage. (10) Fine-grained, coarse-grained and hybrid methodologies In a recent review of contingency studies focusing on methodological issues, Harrigan[38] contends that the study of contingency approaches to strategy formulation requires the use of hybrid designs, incorporating attributes of both fineand coarse-grained research methodologies. She notes that the salient characteristics of the proposed hybrid methodology the use of the multiple sites, multiple data sources and intricate sample designs compensate for some of the limitations of the fine- and coarse-grained methodologies. Harrigan points out that while coarse-textured studies (such as early PIMS studies) foil satisfactorily to incorporate intra-industry competitive nuances, fine-textured single-site studies (such as case-studies) lack generalisability and statistical rigour.

The Contingency Approach __

Directions for Theory and Research

Although a variety of theory and research issues have been suggested above, several general topics appear most appropriate for immediate enquiry. First, theorists and researchers need to develop and group environmental and organisational contingency variables directly relevant to marketing management and strategy. Because the level of analysis often differs between management and marketing (i.e. the organisation vs. a functional unit), marketing contingency variables may be more specialised. As suggested earlier, the management literature may provide a helpful starting point, but contingency approaches to marketing must be tailored to the specific issue and level of analysis. Second, the relevance of consumer behaviour variables in strategy contexts has not been addressed sufficiently. While this omission is understandable, given the primary focus of researchers in the

European Joumal of Marketing 22,7 58

strategic management area, further research on the contextual relevance of consumer behaviour variables to marketing strategy formulation holds the potential for a major contribution. A logical starting point for such a research endeavour would be to review the extensive body of literature on situational influence paradigms in consumer behaviour and their relevance to marketing strategy (see Leigh and Martin[105] for a review). The contextual relevance of consumer behaviour variables in marketing strategy studies is illustrated by Udell[91]. Third, the contingency approach can be extended to areas of marketing other than strategy.

Conclusion
Contingency approaches to theory building represent an alternative to searching for universal principles, and instead focus on key situational relationships. These approaches reduce the vast array of combinations a researcher must consider by focusing research on key variables and inter-relationships. They also provide important pedagogic usefulness[l] by helping to translate theory and research to practice. Day and Wensley[106] emphasise the dividends obtainable through focusing on these mid-range approaches: Productivity will be further assured by building upon existing conceptual and methodological strengths within marketing, and focusing these strengths on the development of mid-range integrative theories (p. 85). Wind and Robertson[107] urge the development of approaches that change the "isolatory focus of marketing" and call for new linkages between marketing and the other management disciplines. Contingency approaches, such as the ones discussed in this article, offer an opportunity to integrate perspectives from management and marketing, thereby acknowledging the interdependency of the business functions.
Footnotes 1. It should, however, be noted that in recent years, the PIMS database has heen extensively used by strategy researchers for investigating the moderating effects of contextual variables on the strategy-performance linkage, e.g.ft2,108,93,13]; see also, Ramanujam and Venkataraman[109, pp. 141-5] for a summary of findings of several other studies. 2. More realistically, Burke's[51] contingency framework builds on the contributions of researchers in at least three major areas marketing, business policy and strategy, and industrial organisation economics. 3. See Day[49] for a review of studies critical of the PLC concept, as well as an extensive discussion on the strategic relevance of the PLC concept and its potential shortcomings. 4. While Abell's[66] generalised statement appears to befairlycomprehensive (i.e. its reference to response (strategy) and performance variahles, and environmental and oi;ganisational contingencies), a cursory examination of numerous other contingency statements reveals no explicit reference to performance. Nevertheless, implicit in statements that postulate that the appropriateness of alternative strategies is contingent on certain environmental and oi;ganisational variables is the notion that pursuit of appropriate strategies is conducive to superior performance, as opposed to pursuit of inappropriate strategies. 5. See Prescott[13] for a review of literature. See Sharma, Durand and Gur-Arie[110] for a discussion of various types of moderator variahles (homologiser, quasi-moderator and pure moderator) and methods for identifying moderator variahles (sub-group analysis and moderated regression analysis).

6.

See Hax and Majluf[lll] for a graphic exposition of the moderating effects of contextual variables on the form of the relationship between market share and profitability; also, of related interest are thefindingsreported in a recent study by Jacobson and Aaker[85]. Based on an analysis of a sample of PIMS business, the authors found that a large proportion of the market share-ROI relationship is spurious in the sense that both market share and ROI are joint outcomes of some third factors. The direct impact of market share on ROI was found to be much smaller than previous studies indicated them to be. The authors report that the impact of market share on profitability to be greater under certain contingencies: (1) the more fragmented the buyer concentration; (2) the less frequent the purchase; (3) the higher the marketing intensity, or (4) the higher the product quality. The effect of conditions relating to product life cycle, product importance, vertical integration and relative price on the relationship between market share and profitability were found to be insignificant.

The Contingency Approach

59

References 1. Hambrick, D.C., "An Empirical Typology of Mature Industrial-Product Environments", Academy of Management Journal, Vol. 26, June 1983, pp. 213-30. 2. Emery, RE. andTrist, E.L., "The Causal Texture of Organisational Environments",/ft^maw Relations, Vol. 18, February 1965, pp. 21-31. 3. Lawrence, P.R. and Lorsch, J.W., Organisation and Environment, Irwin, Homewood, Illinois, 1967. 4. Perrow, C , "A Framework for the Comparative Analysis of Oiiganisations", American Sociological Review, Vol. 32, April 1967, pp. 194-208. 5. Thompson, J.D., Organisations in Action, McGraw-Hill, New York, 1967. 6. Woodward, J., Industrial Organisation: Theory and Practice, Oxford University Press, London, 1965. 7. Hambrick, D.C., "High Profit Strategies in Mature Industrial-Product Industries: A Contingency Approach", Academy of Management Journal, Vol. 26, December 1983, pp. 687-707. 8. Hofer, C.W., ' Toward a Contingency Theory of Business Strategy", Academy of Management Journal, Vol. 18, December 1975, pp. 784-810. 9. Porter, M., Competitive Strategy, Free Press, New York, 1980. 10. Fiedler, F.E., "A Contingency Model of Leadership Effectiveness", in Berkowitz, L. (Ed.), Advances in Experimental Social Psychology, Vol. 1, Academic Press, New York, 1964, pp. 149-90. 11. House, R., "A Path-Goal Theory of Leadership Effectiveness", Administrative Science Quarterly, Vol. 16, September 1971, pp. 321-39. 12. Vroom V. and Yetton, P., Leadership and Decision aking. University of Pittsburgh Press, Pittsburgh, 1973. 13. Prescott, J.E., "Environment as a Moderator of the Strategy-Performance Relationship'', Academy of Management Journal, Vol. 29, June 1986, pp. 329-46. 14. Zaltman, G., LeMasters, K. and Heffring, M., Theory Construction in Marketing: Some Thoughts on Thinking, Wiley, New York, 1982. 15. Deshpande, R., "Paradigms Lost: On Theory and Method in Research in Marketing", Journal of Marketing, Vol. 47, Fall 1983, pp. 101-10. 16. Boulding,K., "GeneralSystemsTheory The Skeleton of Science", Vol. 2, April 1956, pp. 197-208.

European Joumal of Marketing 22,7

60

17. Katz, D. and Kahn, R.L., The Social Psychology of Organizations, John Wiley and Sons, New York, 1966. 18. Von Bertalanffy, L., "General System Theory: A New Approach to Unity of Science", Hufman Biology, Vol. 23, December 1951, pp. 303-61. 19. Alderson, W., Marketing Behaviour and Executive Action, Irwin, R.D., Homewood, Illinois, 1957. 20. Cyert, R. and March, J., A Behavioural Theory of the Firm, Prentice-Hall, Englewood Cliffs, NJ, 1963. 21 March, J. and Simon, H., Organisations, John Wiley and Sons, New York, 1958. 22. Simon, H., Administrative Behaviour, Macmillan, New York, 1957 23. Nicosia, F.M., "Marketing and Alderson's Functionalism", The Joumal of Business, Vol. 35, October 1962, pp. 403-13. 24. Bums, T. and Stalker, G.M., The Management of Innovation, Tavistock, London, 1961. 25. Chandler, A., Strategy and Structure, Anchor Books, Garden City, NY, 1962. 26. Tosi, H.R. Jr. and Slocum, J.W, "Contingency Theory: Some Suggested Directions", Joumal of Management, Vol. 10, Spring 1984, pp. 9-26. 27. Galbraith, J.R., Organisational Design, Addison-Wesley, Reading, Mass., 1977. 28. Khandwalla, P.N., The Design of Organisations, Harcourt Brace Jovanovich, New York, 1977. 29. Anderson, C. and Paine, R, "Managerial Perceptions and Strategic Behaviours", Academy of Management Joumal, Vol. 15, December 1975, pp. 811-23. 30. Fry, L. and Slocum, J., "Technology, Structure and Workgroup Effectiveness: A Test of a Contingency Model", Academy of Management Joumat, Vol. 27, June 1984, pp. 221-46. 31. Galbraith, J.R., Designing Complex Organisation, Addison-Wesley, Reading, Mass., 1973. 32. Weitz, B. and Anderson, E., "Organising and Controlling the Marketing Function", in Enis, B.M. and Roering, K.J. (Eds.), op.cit., 1981, pp. 134-42. 33. Nonaka, I. and Nicosia, F.M., "Marketing Management, Its Environment and Information Processing: A Problem of Organisational Design", Joumal of Business Research, Vol. 4, December 1979, pp. 277-300. 34. Ruekert, R.W., Walker, O.C. and Roering, K.J., "The Organisation of Marketing Activities: A Contingency Theory of Structure and Performance'', Joumal of Marketing, Vol. 49, Winter 1985, pp. 13-25. 35. Anderson, E. and Weitz, B.A., "Make-or-Buy Decisions: Vertical Integration and Marketing Productivity", Sloan Management Review, Vol. 28, Spring 1986, pp. 3-19. 36. Downey, K., Hellreigel, D. and Slocum, J., "Environmental Uncertainty: The Construct and Its Application", Administrative Science Quarterly, Vol. 20, December 1975, pp. 613-29. 37. Terreberry, S., "The Evaluation of Organisational Environments", Administrative Science Quarterly, Vol. 12, March 1968, pp. 590-613. 38. Harrigan, K.R., "Research Methodologies for Contingency Approaches to Business Strategies", Academy of Management Review, Vol. 8, July 1983, pp. 398-405. 39. Hamermesh, R.G. and Silk, S.B., "How to Compete in Stagnant Industries", Harvard Business Review, Vol. 57, September-October 1979, pp. 161-8. 40. Harrigan, K.R., Strategies for Declining Businesses, Health, Lexington, Mass., 1980. 41. Hall, W.K., ' 'Survival Strategies in a Hostile Environment'', Harvard Business Review, Vol. 58, September-October 1980, pp. 75-85. 42. Anderson, C. and Zeithaml, C.P., "Stage of the Product Life Cycle, Business Strategy and Business Performance", Academy of Management Joumal, Vol. 27, March 1984, pp. 1-24. 43. Kotler, P., Marketing Management: Analysis, Planning and Control, Prentice HaU, Englewood CUffs, NJ, 1984.

44. Bloom. P. and Kotler, P.,' 'Strategies for High Market-Share Companies'', Harvard Business Review, Vol. 53, November-December 1975, pp. 63-72. 45. Hamermesh, R.G., Anderson, J.M. and Harris, J.E., "Strategies for Low Market Share Businesses", Harvard Business Review, Vol. 56, May-June 1978, pp. 95-102. 46. Woo, C. and Cooper, A.C., "Strategies of Effective Low Share Businesses", Strategic Management Joumal, Vol. 2, July-September 1981, pp. 301-18. 47 Woo, CY. and Cooper, A.C., "The Surprising Case for Low Market Share", Harvard Business Review, Vol. 60, November-December 1982, pp. 106-13. 48. Woo, C.Y., "Market-share Leadership-Not Alwajrs So Good", Harvard Business Review, Vol. 62, January-February 1984, pp. 50-4. 49. Day, G.S., Analysis for Strategic Market Decisions, West, St. Paul, Minn., 1986. 50. Wind, Y. and Mahajan, V., ' 'Designing Product and Business Portfolios'', Harvard Business Review, Vol. 59, January-February 1981, pp. 155-65. 51. Burke, M.C., "Strategic Choice and Marketing Managers: An Examination of Business Level Marketing Objectives", Joumal of Marketing Research, Vol. 21, November 1984, pp. 345-59. 52. Fiedler, F.E., A Theory of Leadership Effectiveness, McGraw-Hill, New York, 1967 53. Evans, M.G., "The Effects of Supervisory Behaviour on the Path-Goal Relationship", Organisational Behaviour and Human Performance, May 1970, pp. 277-98. 54. House, R J. and Mitchell, T.R., ' 'Path-Goal Theory of Leadership'', Contemporary Business, Vol. 3, 1974, pp. 81-98. 55. Weitz, B.A., "Effectiveness in Sales Interactions: A Contingency Framework", Joumal of Marketing, Vol. 45, Winter 1981, pp. 85-103. 56. Williams, K.C. and Spiro, R.L., "Communication Style in the Salesperson-Customer Dyad", Joumal of Marketing Research, Vol. 22, November 1985, pp. 434-42. 57 Frazier, L. and Sheth, J.N., "An Attitude-Behaviour Framework for Distribution Channel Management", Joumal of Marketing, Vol. 49, Summer 1985, pp. 38-48. 58. Futrell, C M . and Parasuraman, A., "The Relationship of Satisfaction and Performance to Salesforce Turnover", Joumal of Marketing, Vol. 48, Fall 1984, pp. 33-40. 59. Yoon, E. and Lilien, G.L., "New Industrial Product Performance: The Effects of Market Characteristics and Strategy", Joumal of Product Innovation Management, Vol. 2, September 1985, pp. 134-44. 60. Copeland, M.T.,' 'Relation of Consumers' Buying Habits to Marketing Methods'', Harvard Business Review, Vol. I, April 1923, pp. 282-9. 61. Aspinwall, L.V., "The Characteristics of Good Theory", in Lazer, W. and Kelley, E.J. (Eds.), Managerial Marketing: Perspectives and Viewpoints, Irwin, Homewood, Illinois, 1962, pp. 633-43. 62. Aspinwall, L.V., "The Parallel Systems Theory", in Lazer, W. and KeUy, E.J. (Eds.), ibid., 1962, pp. 644-52. 63. Bucklin, L.P, "Retail Strategy and the Classification of Goods", Joumal of Marketing, Vol. 27, January 1963, pp. 51-6. 64. Miracle, G.E., "Product Characteristics and Marketing Strategy", Joumal of Marketing, Vol. 29, January 1965, pp. 18-24. 65. Dommermuth, W.P. and Cundiff, E.W., "Shopping Goods, Shopping Centres, and Selling Strategies", Joumal of Marketing, Vol. 31, October 1967, pp. 32-6. 66. Abell, D . F , ' 'Alternative Strategies for Strategy Research in Marketing'', Report No. 78-100, Marketing Science Institute, Cambridge, Mass., 1978. 67. Eliashberg, J. and Chatterjee, R., ' 'Analytical Models of Competition with Implications for Marketing: Issues, Findings and Outlook", Joumal of Marketir^Research, Vol. 22, August 1985, pp. 237-61.

The Contingency Approach

61

European Joumal of Marketing 22,7

62

68. Lane, WJ., ' 'Product Differentiation in a Market with Endogenous Sequential Entry'', Bell Joumal of Economics, Vol. 11, Spring 1980, pp. 237-60. 69. Friedman, L., "Game Theory Models in the Allocation of Advertising Expenditures", Operations Research, Vol. 6, September-October 1958, pp. 688-709. 70. Leone, R.P. and Schultz, R.L., "A Study of Marketing Generalisations", Joumal of Marketing, Vol. 44, Winter 1980, pp. 10-8. 71. Gupta, S.K. and Krishnan, K.S., "Mathematical Models in Marketing", Operations Research, Vol. 15, November-December 1967, pp. 1040-50. 72. Thompson, G.L. and Teng, J.T.,' 'Optimal Pricing and Advertising Policies for New Product Oligopoly Models," Marketing Science, Vol. 3, February 1984, pp. 148-68. 73. Deal, K.R., "Optimising Advertising Expenditures in a Dynamic Duopoly", Operations Research, Vol. 27, July-August 1979, pp. 682-92. 74. Hauser, J.R. and Shugan, S.M., "Defensive Marketing Strategies", Marketing Science, Vol. 2, FaU 1983, pp. 319-60. 75. Ferrell, O.C. and Gresham, L.G., "A Contingency Framework for Understanding Ethical Decision Making in Marketing", Joumal of Marketing, Vol. 49, Summer 1985, pp. 87-96. 76. Pennings, J., "The Relevance of the Structural-Contingency Model for Organisational Effectiveness", Administrative Science Quarterly, Vol. 20, September 1975, pp. 393-410. 77. Steers, R., "Problems in Measurement of Organisational Effectiveness", Administrative Science Quarterly, Vol. 20, December 1975, pp. 546-58. 78. Mohr, L.B., "Organisational Technology and Organisational Structure", Administrative Science Quarterly, Vol. 16, December 1971, pp. 444-59. 79. Kotler, P., "The Major Tasks of Marketing Management", Joumal of Marketing, Vol. 37, October 1973, pp. 42-9. 80. Levitt, T., "Exploit the Product Life Cycle", Harvard Business Review, Vol. 43, NovemberDecember 1965, pp. 81-94. 81. Doyle, P., ' 'Tbe Realities of the Product Life Cycle'', Quarterly Review ofMarketing, Summer 1978, pp. 1-6. 82. Weber, J.A., "Planning Corporate Growth with Inverted Product Life Cycles", Long Range Planning, Vol. 9, October 1976, pp. 12-29. 83. Wasson, C.R., "How Predictable are Fashion and other Product Life Cycles?", Joumal of Marketing, Vol. 32, July 1968, pp. 36-43. 84. Swan, J.E. and Rink, D.R., "Fitting Market Strategy to Varying Product Life Cycles", Business Horizons, Vol. 25, January-February 1982, pp. 72-6. 85. Jacobson, R. and Aaker, D.A., "Is Market Share All that it's Cracked up to Be?", Joumal of Marketing, Vol. 49, Fall 1985, pp. 11-22. 86. Kotrba, R.W., "The Strategy Selection Chart", Joumal of Marketing, Vol. 30, July 1966, pp. 22-5. 87. Resnick, AJ., Tumey, P.B.B. and Mason, J.B., "Marketers Turn to Counter Segmentation", Harvard Business Review, Vol. 57, September-October 1979, pp. 105-6. 88. Bishop, W.S., Graham, J.L. and Jones M.J., "Volatility of Derived Demand in Industrial Markets and its Management Implications", Joumal o} Marketing, Vol. 48, Fall 1984, pp. 95-103. 89. Urban, G.L. and Hauser, J.R., Design and Marketing of New Products, Prentice-Hall, Englewood Cliffs, NJ, 1980. 90. Robinson, B. and Lakhani, C , "Dynamic Price Models for New Product Planning", Management Science, Vol. 21, June 1985, pp. 1113-22. 91. Udell, J.G., Sttccessfid Marketing Strategies in American Industry, Mimir, Madison, Wisconsin, 1972.

92. Stem, L.W. and Reve, T., "Distribution Channels as Political Economies: A Framework for Comparative Analysis", Joumal of Marketing, Vol. 44, Summer 1980, pp. 52-64. 93. Hambrick, D.C. and Lei, D., "Toward an Empirical Prioritisation of Contingency Variables for Business Strategy", Academy of Management Joumal, December 1985, pp. 763-88. 94. Achrol, R.S., Reve, T. and Stem, L.W., "The Environment of Marketing Channel Dyads: A Framework for Comparative Analysis", Joumal of Marketing, Vol. 47, Fall 1983, pp. 55-67. 95. Ford, J.D. and Slocum, J.W., "Size, Technology, Environment and the Structure of , Organisations", Academy of Management Review, Vol. 2, October 1976, pp. 561-75. 96. Pfeffer, J. and Salancik, G., The External Control of Organisations, Harper and Row, New York, 1978. 97. Zeithaml, CP. and Zeithaml, V.A., "Environmental Management: Revising the Marketing Perspective", Joumal of Marketing, Vol. 48, Spring 1984, pp. 46-53. 98. Van de Ven, A.H. and Astley, W.G., "Mapping the Field to Create a Dynamic Perspective on Organisation Design and Behaviour", in Joyce, W.F. (Ed.), Wiley, New York, 1981, pp. 249-98. 99. Astley, W.G. and Van de Ven, A.H., "Central Perspectives and Debates in Organisation Theory", Administrative Science Quarterly, Vol. 28, June 1983, pp. 245-73. 100. Walker, O.C, Ruekert, R.W. and Roering, K., "How Marketing Decisions are Made and Implemented: Some Altemative Perspectives on Oi;ganisational Behaviour", unpublished working paper. University of Minnesota, Minneapolis, 1984. 101. Fredrickson, J.W., "Effects of Decision Motive and Organisational Performance Level on Strategic Decision Processes", Academy of Management Joumal, Vol. 28, December 1985, pp. 821-43. 102. Child, J., "Organisation Stmcture, Environment and Performance: The Role of Strategic Choice", Sociology, Vol. 6, 1972, pp. 1-22. 103. Schoonhoven, C , "Problems with Contingency Theory: Testing Assumptions Hidden within the Language of Contingency", Administrative Science Quarterly, Vol. 26, September 1981, pp. 349-77. 104. Lochridge, R.K., "Strategies in the Eighties", Annual Perspective, Boston Consulting Group, Boston, 1981. 105. Leigh, J.H. and Martin, CR. Jnr., "A Review of Situational Influence Paradigms and Research", in Enis, B.M. and Roering, K.J. (Eds.), Review of Marketing 1981, American Marketing Association, Chicago, 1981, pp. 57-74. 106. Day, G.S. and Wensley, R., "Marketing Theory with a Strategic Orientation", Joumal of Marketing, Vol. 47, Fall 1983, pp. 79-89. 107. Wind, Y. and Robertson, T.S., "Marketing Strategy: New Directions for Theory and Research", Joumal of Marketing, Vol. 47, Spring 1983, pp. 12-25. 108. Zeithaml, CP. and Fry, L.W, "Contextual and Strategic Differences among Mature Businesses in Four Dynamic Performance Situations", Academy of Management Joumal, Vol. 27, December 1984, pp. 841-60. 109. Ramanujam, V. and Venkataraman, N., "An Inventory and Critique of Strategy Research Using the PIMS Database", Academy of Management Review, Vol. 9, January 1984, pp. 138-51. 110. Sharma, S., Durand, R.M. and Gur-Arie, 0., "Identification and Analysis of Moderator Variables", Joumal of Marketing Research, Vol. 18, August 1981, pp. 291-300. 111. Hax, A.C and Majluf, N.S., Strategic Management: An Integrated Perspective, Prentice-Hall, Englewood Cliffs, NJ, 1984, p. 152.

The Contingency Approach

63

European Journal of Marketing nn n '

Further Reading Boston Consulting Group, Perspectives on Experience, Boston Consulting Group, Boston, 1972. Ginsberg, A. and Venkataraman, A., "Contingency Perspectives of Organisational Strategy: A Critical Review of the Empirical Research'', Academy of Management Review, Vol. 10, July 1985, pp. 421-34. Hambrick, D.C, "Taxonomic Approaches to Studying Strategy: Some Conceptual and Methodological Issues", Journal of Management, Vol. 10, Spring 1984, pp. 27-41. MacMillan, I., Hambrick, D. and Day, D., "The Product Portfolio and Profitability - A PIMS~^~^^^^^ based Analysis of Industrial Product Businesses", Academy of Management Journal, Vol. 25, December 1982, pp. 733-55. Schneider, B. and Bowen, D., "New Services Design, Development and Implementation and the Employee", paper presented at the Symposium on Developing New Services, Philadelphia, 1983.