See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/295398196

Power dynamics of the international marketing within firms and how they
shape international performance

Article  in  Industrial Marketing Management · February 2016

DOI: 10.1016/j.indmarman.2016.01.007

CITATIONS READS

9 260

1 author:

Itzhak Gnizy
Ono Academic College
27 PUBLICATIONS   206 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Itzhak Gnizy on 10 February 2018.

The user has requested enhancement of the downloaded file.

 Power Dynamics of the International Marketing within Firms and How They Shape
International Performance

Itzhak Gnizy
Faculty of Business Administration, Ono Academic College, Kiryat Ono 55000, Israel,
Phone/Fax: +972-3-5311888, E-mail: itzikgn@gmail.com

Abstract
The status of marketing within the firm and its cross-functional interactions continue to draw
academics and practitioners' attention. Using power, rather than influence, and power
asymmetry concepts in an industrial international marketing (IM) context for the first time,
the study examines the interface between IM and non-IM functions and investigates whether
powerful IM functions benefit international performance. Findings show that IMs are
powerful and enhance performance, however to some extent. Power asymmetry between IM
and non-marketing functions is related negatively with performance while power asymmetry
between IM and non-international marketing function is not related to performance.
However, in the presence of international market orientation (IMO) the negative effect of
differences between IM and non-marketing functions powers on performance is weaker.
Thus, a strategic decision to adopt an IMO, perceived as a power mechanism, potentially has
a reviving effect on the IM function, and IMO and the power distribution activity should not
be isolated domains of managerial decision-making. The study accounts simultaneously for
IM as a distinct function and as an activity-based process and allows refined observation into
the marketing functions' interaction.

Keywords: International marketing function, International marketing power, Power

asymmetry, International market orientation, International performance

 2

1. Introduction

The status and importance of marketing within the firm continue to draw attention.

Practitioners and academics address the role and contribution of the marketing area and

voice continued concerns regarding the marketing function's influence (Auh & Merlo, 2012;

Verhoef & Leeflang, 2009; Webster et al., 2005). Marketing has been declared as powerless

(Schultz, 2005) and some scholars state that strong marketing functions are disappearing

(Merlo, 2011). Furthermore, marketing's position and existence as a distinct capability

within the firm is pondered (O'Sullivan & Abela, 2007; Rust et al., 2004). Recently,

Homburg et al. (2015) found that the marketing department has lost significant influence

within the past two decades.

These concerns notwithstanding, empirical evidence on the relationship between

powerful, rather than influential, marketing functions and firm performance is limited and

contradictory. Some scholars find that marketing functions contribute directly to

performance (Auh & Merlo, 2012; Homburg et al., 2015; Moorman & Rust, 1999) while

others do not approve a direct link (Verhoef & Leeflang, 2009). These inconclusive findings

do not illuminate whether powerful marketing functions are needed especially where there is

an ongoing organization-wide adoption of the marketing concept and responsibilities (Auh

&Merlo, 2012; Verhoef & Leeflang, 2009). Notably, influential marketing units still make

the greatest contribution to performance (Homburg et al., 2015). Furthermore, such extant

studies address the non-international marketing (NIM; i.e., local marketing) functions'

influence leaving the international marketing’s (IM) power and its impact on international

performance under-researched. Particularly, the power of IM as a distinct function in the

firm has not been researched. In light of the essentiality of internationalization to firms that

may increase the importance of IMs' relative functional power, scholars call on to study the

relationship between IM functions and performance (Cadogan et al., 2005; Gnizy &

Shoham, 2014). Power is a central aspect of organizational life that affects organizational
 3

processes, strategies and outcomes (Fleming & Spicer, 2014). Notably, the power of

organizational functions plays a role in the creation of effective cross-functional

relationships (Dawes & Massey, 2006a). Hence, the first objective of this study is to

examine whether powerful IM functions contribute to performance in an industrial

marketing context. In B2B firms, functional power frequently resides in functions other than

marketing, which may unjustifiably undermine marketing's contribution (Griffin et al.,

2013).

Even though there may be solid justifications why international firms should increase

the power of IM functions, two questions remain unanswered. The first is what happens

when IMs possess too much power. Excessive power of an organizational function may

result in dysfunctional outcomes (Atuahene-Gima et al., 2005, 2008). Thus, there may be an

optimal level of power, which implies the investigation of a non-linear relationship between

IMs' power and performance. Such a more complex relationship can provide perspectives

that managers can cope with but has not been addressed in prior research, and is therefore

the second key objective of this study.

The second unanswered question is what happens when IMs have very low or very

high relative power. Unequal intra-firm relationships and power differences may undermine

the quality of the cross-functional dialogue and affect firms' outcomes. This implies the

investigation of the consequences of power asymmetry between IMs and other functions.

While power asymmetry is an ongoing reality and exists in the vast majority of relationships

(Kumar, 1996), its effects on performance in international context has not received attention

and is therefore the third key objective of this study.

Matters at the interface of marketing with other functions are among the essential

ones that managers are concerned with (Kotler et al., 2006). Such interface can be viewed

along two dimensions in which marketing can exercise power: marketing as a distinct

functional group or as an activity-based organization-wide culture, i.e., market orientation

 4

(Merlo & Auh, 2009). The interplay between these dimensions exposes a facet of

marketing's position. Although few studies include both dimensions and report conflicting

consequences regarding the contribution of a strong marketing function to performance

beyond that of a market orientation (Auh & Merlo, 2012; Verhoef & Leeflang, 2009), their

simultaneous impact is neglected (Merlo & Auh, 2009). Notably, strategy affects the

distribution of power among functions (Walker & Ruekert, 1987) and thus affects the power

asymmetry-performance link. Thus, international market orientation (IMO) can drive the

power of IM and play a role in the link amid power asymmetry between IM and other

functions. Prior literature on power has not addressed this phenomenon in IM context.

Hence, the fourth objective of this study is to examine whether IMO facilitates the effect of

power asymmetry between IM and other functions on performance.

This study draws on power theory to address its four objectives and contributes in

several ways. First, not only is the concept of power applied limitedly on marketing within

the firm (Auh & Merlo, 2012; Hingley et al., 2015a) but also restricted to studies on NIMs.

In addition, we lack knowledge of the operation of power in asymmetry (Hingley et al.,

2015a). Our study extends the power domain into an international context. Although IM

may be perceived merely as “one of the business functions” it is a crucial one because of its

unique roles and skills. The IM function extends throughout internal (e.g., new products for

the international markets, adaptation/ standardization levels) and external (e.g., connecting

the organization to other entities in the supply chain) issues. The growth of international

economies and the increase in IM activities in many industrial firms bring to surface the

importance of IM issues. Second, this study highlights the need to study IM in a different

stream than NIM functions. While scholars send warning signals concerning the existence of

marketing "as a distinct capability within the firm" (Auh & Merlo, 2012, p. 861), research on

IM as a distinct unit is limited. Distinctive aspects of IM must be understood since

asymmetry may exist across firms’ international and domestic operations and functions
 5

(Howard, 2003). Thus, our study is conducted on firms with a clear distinction between IMs

and NIMs. Furthermore, we examine the interactions between IM and non-marketing (NM)

functions. Prior research investigates the influence of the marketing function in isolation and

does not account for the distribution of power among functions (Homburg et al., 2015). To

the best of our knowledge, no prior research has focused simultaneously on the power of IM,

NIM and NM functions. Such setting assists in better understanding how IM functions are

nested within the firm. Third, the decline in marketing departments' influence, attributed to

marketers' inability to communicate their influence on outcomes, ultimately leads to

decreased performance and is thus worrisome (Homburg et al., 2015). Hence, current

understanding of IMs' power dynamics and their consequences is important for international

managers' conducting. Furthermore, this study focuses on power rather than influence. The

distinction between the two constructs provides another perspective on marketing's position.

We proceed with a theory and hypotheses development. We describe the

methodology, present the study's findings and discuss them. We conclude with implications,

limitations, and further research suggestions.

2. Theory Development and Hypotheses

2.1 The Power of IM

Power and Influence. The relationship between power and influence is widely

recognized though in many cases the two terms are used interchangeably. This study focuses

on relative functional power and distinguishes power from influence. While power in

general is the ability to change others' behaviors, whether this ability is used or not,

influence is the use of power (Homburg et al., 1999). Therefore, power is a potential

influence and influence is a subtle manifestation of power. On one hand, the more an

organizational entity possesses power, the more potential influence it may have (Krush et al.,

2015). On the other hand, influential entities may have little power and powerful entities are

sometimes not influential. For instance, the IM function can advise the NIM function on the
 6

conduct of a common communication strategy in both foreign and local markets. IM may

have influence if the NIM function follows this advice. However, in many firms, especially

those with independent IM from NIM functions, IM may have no power over the NIM

function. IM can persuade but not necessarily compel. The NIM function may have power

over its resources and can impose its will upon a separate communication strategy. Hence,

power and influence are not distributed equally and reflect different aspects of behavior.

Merlo (2011), for example, used power as a determinant of marketing's influence in the firm.

While prior research has uncovered the influence of the marketing functions (Gnizy &

Shoham, [2014] in IM context, Engelen, [2011] in NIM context), this study examines their

relative power and thus supplements views and findings from prior research, and provides a

more nuanced understanding of IMs' position and how they are nested in the firm.

Functional Power. Organizational power is a multidimensional concept that touches

on a wide variety of different phenomena with numerous perspectives (Fleming & Spicer,

2014). When one function is dependent on another, a power relationship emerges (Daft,

2010). Specifically, interdependence affects marketing’s interactions with other functions.

This view is consistent with a resource-based view of the firm (Dawes and Massey, 2006b).

However, concerns regarding the decline of the marketing functions in recent years induced

scholars to explore the relative power of marketing and focus on lateral power relationships.

Notably, managers simply understand the relative functional power concept and can easily

apply it to their firms (Harris & Ogbonna, 2003).

Functional power originates form different sources such as the function's centrality,

substitutability, uncertainty coping, expertise, and access to resources (Krush et al., 2015).

While the term power is widely used to designate the potential or ability to change others'

actions and beliefs, following the above discussion and this study's context, we

conceptualize power as the relative importance of a unit to the firm (Dawes & Massey,

2006b). This definition is consistent with other scholars' definition of marketing power (e.g.,
 7

Atuahene-Gima & Evangelista, 2000; Homburg et al., 1999). Specifically, IM's power is a

reflection of its strength within the firm. Auh and Merlo's (2012) operationalization of

marketing power was based on the critical contingencies perspective but they called on to

use other direct views of power in future research.

2.2 International Performance

Business performance is the extent of the business unit’s financial success (Krush et

al., 2015). Numerous studies underline financial performances such as profits and revenues

to measure firms' success (Carneiro et al., 2011). Hence, we conceptualize the international

performance dimension as based on financial outcomes.

2.3 IM Power and International Performance

Several arguments propose a positive relationship between the power of the IM

functions and international performance. First, in NIM context, strong marketing functions

can accelerate organizational processes such as new product development (NPD), which

drive performance (Homburg et al., 2015). Moreover, powerful marketing functions enhance

directly performance (Auh & Merlo, 2012). By implication, powerful IM functions should

affect international performance positively. Second, in IM context, empirical research shows

that strong IMs provide firms with competencies and can use their strength to foster

organizational orientations (e.g., IMO), which enhance performance (Gnizy & Shoham,

2014). Third, powerful exporting functions can acquire the collaboration and teamwork of

other functions to optimize the offerings to foreign markets and thus benefit performance

(Vyas & Souchon, 2003). Powerful IMs can exert cross-functional coordination, which also

enhance customer value and market orientation and again drive performance (Homburg et

al., 2015). Furthermore, the strength of IMs directly and positively affects performance

(Gnizy & Shoham, 2014). Finally, characteristics of the exporting unit such as the degree of

autonomy of its managers and activities, level of priority given to and attitude towards

export (Bijmolt & Zwart, 1994) and the existence of an export department and its
 8

independency enhance export performance (Beamish et al., 1999; Carneiro et al., 2011; Das,

1994). Notably, these characteristics reflect the relative power of IMs and the structural

determinants (i.e., existence and independency) are consistent with our design to study

separate and distinct IM functions. Hence, the greater the IM's power, the more it is able to

influence its position and the actions of other functions and thus enhance performance.

The preceding discussion focused on the positive relationship between IM power and

performance. Though the tendency of managers is to build up their power base and there

may be solid arguments for empowering marketing, too much power may be harmful (Auh

& Merlo, 2012). Thus, there should be an optimal level of IM's power, which implies a non-

linear relationship between the IM power and performance. We discuss the negative effects

of IM power below.

Different organizational functions represent different thought worlds. When one

function (e.g., IM) possesses too much power, risky conditions may evolve in which one

direction, without other points of view or diversity of perspectives, dominates the

organization. This may lead to an organizational myopia. Worse, in such conditions, the

more powerful party may dictate its own ideas and in response, the less powerful parties may

become reluctant to communicate and become alienated (Atuahene-Gima & De Luca, 2008).

This may harm the interactions between business functions and their coordinated efforts to

benefit performance.

With regard to marketing, different excessive power scenarios may be attributed to

this function. For example, Kohli and Jaworski (1990) hypothesized a political problem

behind the transition to market orientation (Lamberti & Noci, 2009) with a possible

emergence of excessive power. While IM functions are expected to manage relationships

with customers, understand the market and competitors (Song et al., 2007), high power of

IMs may result in over-attention to current customers' needs leaving their new and emergent

needs under-attended, which may unwittingly lead the firm into a competency or familiarity
 9

trap (Atuahene-Gima et al., 2005). In the same vein, in situations where IMs are very

powerful, they may be in a position to employ their preferred plans and activities through

over-dominance rather than through collaboration with other functions, which may

jeopardize a successful implementation of IM activities. IMs may acquire more and more

control over the firm processes at the expense of other functions. In the extreme, excessive

power may create an environment conducive to dysfunctional conflicts, which impair

performance.

In sum, while at certain lower levels of IM's power, it may be advantageous and

contributes to performance, beyond this optimal level, excessive IM power may be

disadvantageous and carry the risk of inhibiting performance. Considered in tandem with

IMs' power positive effects, these potential negative effects suggest there is an inverted U-

shaped relationship. Thus, we hypothesize:

H1: There is an inverted U-shape relationship between the power of IM function and

international performance where IM power is positively related to performance to a point,

after which it becomes negative.

2.4 Power Asymmetry and International Performance

IMs manage interactions with other functions that exert power as well. Homburg et

al. (2015) found that while the marketing function has lost power in recent years, other

functions gained it. Such dynamics reflect power differences, i.e., power asymmetry,

between functions. While the general notion is that power asymmetry is dysfunctional

(Marcos-Cuevas et al., 2015), it would be beneficial to provide empirical evidence and

understand how power differences between IMs and other functions affect performance.

Notably, power asymmetry elaborates on the hypothesized inverted U-shape relationship

above (H1). Following Auh and Merlo (2012), we define power asymmetry as the difference

between two parties' levels of power.

The coexistence of various functions with asymmetric different cultures, discourses

 10

and identities lead to numerous power asymmetry scenarios. For example, functions such as

marketing and manufacturing represent line (as opposed to staff) functions that contribute to

core value-added processes and have more power than other functions. Marketing is often

seen as more powerful because of its boundary-spanning role (Papke-Shields & Malhotra,

2008). In B2B firms, functional power structures keep marketing from exerting control over

innovation and NPD decisions (Griffin et al., 2013). In hi-tech firms, marketing-R&D

interdependence is asymmetrical with marketing having relatively lower power in the NPD

process (Atuahene-Gima & De Luca, 2008). Asymmetric power relations are less beneficial

than symmetric (Auh & Merlo, 2012) since under conditions of power imbalance,

frequencies of exchange and information flow among actors are reduced and hinder

successful relationships (Casciaro et al., 2005). Power imbalance among functions may have

other dysfunctional outcomes such as reduced cohesiveness and communication, and

increased opportunism and politics behaviors resulting in organizational failure (Atuahene-

Gima & Evangelista, 2000). The bilateral deterrence theory indicates that power asymmetry

negatively affects performance since it is associated with high levels of conflict. When

asymmetry is high, the parties are engaged in self-serving behaviors at the expense of the

firm's interests (Auh & Merlo, 2012). Additionally, according to the sociopolitical

perspective asymmetrical power relationships between units engender struggles for influence

and countervailing power behaviors (Atuahene-Gima & De Luca, 2008) at the expense of

firms' outcomes. In IM context, firms' export functions operate in political environments in

which other functions jockey for power and in many cases, firms' export operations

asymmetrical dependence on other functions' coordinated activities and goodwill places it in

a vulnerable position to opportunistic behaviors (Cadogan et al., 2005).

Though this discussion holds for the IM-other functions power asymmetry, including

NIMs, we elaborate on the IM-NIM power asymmetry. IM and NIM functions are both

marketing that operate in similar domains, share objectives, have closely related tasks and
 11

skills, and more frequently exchange resources, which increase their interdependence

(Dawes & Massey, 2006b). While all functions compete on organizational resources, IMs

and NIMs compete on the same marketing resources. Particularly, export firms have internal

environments that are often geared toward serving the domestic market. As a result, export

marketing and non-export functions compete for resources, which increase conflict between

them (Cadogan et al., 2005) and affect coordinated efforts to attain organizational objectives.

In sum, when power asymmetry between IM and other functions is high,

performance is affected negatively because of dysfunctional outcomes. Conversely, when

power asymmetry is low, all functions may believe that conflict could compromise their

relationships and effectiveness, and may choose to cooperate and avoid opportunism

behaviors, which should enhance performance as a whole (Auh & Merlo, 2012). Thus, we

hypothesize:

H2: The larger the difference between IMs' power and (a) NIMs' power, and (b) NM

functions' power, the lower the international performance.

2.5 IMO Effect on Power Asymmetry

IM-other functions power asymmetry may negatively affect performance (H2).

However, a question rises whether there are circumstances, which attenuate this negative

effect. An organizational strategy affects the amount of resources allocated to marketing

activities and the power distribution among functions. Specifically, strategy affects the

performance-power asymmetry link (Auh & Merlo, 2012). Auh and Merlo (2012) studied

differentiation and cost leadership strategies, and called for future research to examine this

link under other strategies. Such examination of how the marketing-other functions

interactions can improve performance may provide managers with insight for effective

resource allocation decisions (Auh & Merlo, 2012). Since functional power reflects on how

the influence over market-related activities is allocated between units (Homburg et al., 1999)

and given the increasing need for cross-functional collaboration in today's business, we
 12

propose IMO as such a strategy. IMO is central to the IM thought and practice as a predictor

of international performance (Gnizy & Shoham, 2014). Its employment assists in diffusing

marketing insights’ into strategic decision-making. We argue that the negative effect of IM-

other functions power asymmetry is decreased through its interaction with IMO.

IMO provides mechanisms for information and resource sharing and mutual

responsiveness to market needs (Kohli & Jaworski, 1990). Shared market knowledge is the

crux of market orientation and is unlikely to engender significant information asymmetries

and diversity of perspectives among functions (Atuahene-Gima et al., 2005). Hence, through

its components, which are more likely to rely equally on the competencies and power of

multiple functions, IMO can enhance consensus with respect to IM activities. Such

consensus creates a common working framework (e.g., analysis of customer needs and

market trends) for employees and may hinder the negative outcomes of power asymmetry

such as conflicts and political behaviors, and thus decrease their negative effects on

performance. Alternatively, IMO involves the efforts of virtually all functions and can serve

as a power-balancing tool among them. Power balance across functions is fundamental to

institutionalize properly inter-functional coordination (Kohli & Jaworski, 1990), an

important element of market orientation. More coordination creates further dispersion of

IMs' responsibilities and may lead to loss of autonomy in IM decisions, resulting in

decreased marketing power (Verhoef & Leeflang, 2009). Conversely, increased IM-other

functions power asymmetry decreases the frequency and effectiveness of exchanges between

functions (Casciaro et al., 2005), and increases coordination uncertainty and thus harm

mutual objectives in attaining the IM goals. Hence, IMO captures the degree to which IM

interacts with other functions with respect to different aspects of IM activities and therefore

encompasses the power asymmetry in their interactions. IMO's components serve as power

sources to the involved functions. We advance that IMO provides a backdrop for the use of

(positive) power sources (see Atuahene-Gima & De Luca, 2008). Thus, we hypothesize:
 13

H3: The negative effect of differences between IMs' power and the power of (a) NIM,

and (b) NM functions on international performance is weaker when IMO is stronger.

3. Research Methodology
Sampling and Data Collection. Data were collected by employing a self-

administered survey questionnaire distributed by mail. Following a random sampling

procedure on Dun & Bradstreet database, 800 Israeli international firms were selected.

Target respondents were one key senior executive per firm that had perspectives on the

operations and interactions of IM with other functions and insights on the functions'

performance (e.g., executives who oversaw IM or had ties with IM). Since target firms were

those with both international and domestic operations and have separate function/personnel

managing IM independently from NIM, we eliminated all surveys that did not indicate such

independence. We also eliminated surveys with less than two employees in either marketing

functions to ensure we were measuring power on functional rather than on personal basis.

After excluding respondents who indicated confidence or familiarity levels below 3.75 (out

of 5), non-respondents and incomplete surveys, a total of 137 respondents from different

firms provided useable questionnaires matching the study's setting, for an effective response

rate of 17.1%. The sample size exhibits sufficient statistical fit (Hair et al., 2010) and the

response rate is consistent with prior research that studied related topics (e.g., Auh and

Merlo, 2012; Homburg et al., 2015). To control for limitations of a self-administered survey

we sent a reminder a week after the initial contact. We also used a short questionnaire and

employed a pre-test. We enclosed a short explanation to the questionnaire explaining the

study's purpose and context. Finally, we validated the respondents' confidence and

familiarity levels (see below).

Measurement. To measure the relative power of organizational functions we used a

five-item scale of departmental power (Kohli, 1989). Executives easily understand and apply

the concept of relative functional power (Harris & Ogbonna, 2003). We asked respondents
 14

to relate independently to the power of IM, NIM and NM functions. In line with Auh and

Merlo (2012), power asymmetry was measured by squaring the difference between IM's and

NIM's power, and similarly between IM's and NM's power. The greater the difference, the

greater the power asymmetry between IM and certain functions regardless of which function

is more powerful. It is important to note that this measurement does not imply that IM has

less or more power in comparison to other function but that power imbalance occurs

between them. To measure IMO we used Pelham and Wilson's (1996) nine items adjusted to

international context (Gnizy & Shoham, 2014). Finally, we captured international

performance through three subjective items measuring the volume of sales, growth, and

firms' profitability. Subjective performance measures are highly consistent with objective

ones and are even preferred (Blesa & Ripolles, 2008).

All items were measured using 5-point Likert scales (Appendix) with minor

adaptations to the study's context. All measures developed in English were translated into

Hebrew for use with Israeli respondents and were back translated to achieve linguistic

equivalency. Some of the scales used were translated in previous research. For face validity,

one IM academic and two executives commented on the appropriateness of the scales and on

clarity and wording of the survey items. In addition, the questionnaire was pre-tested with 20

managers.

A number of controls known to be related to performance and account for some

observed effects were included in the model (Auh & Merlo, 2012). Controls included firm

size (number of employees), IM function size (number of employees), firm international

experience (years), IM intensity (ratio of IM sales of total sales), and industry type (a dummy

variable: hi-tech or not). Because more experienced respondents may overstate the power of

IM, we include respondents' personal international experience (years). IMs do not operate in

an organizational void, thus we control for the level of NIM and NM functions' power.

Finally, an item was included in the questionnaire asking respondents to indicate whether a
 15

formal distinct and independent IM function exists, in addition to a local/ domestic

department. Another item asked to indicate the scope of international operation (i.e., to

which geographical regions your firm mostly exports).

Sample Profile. Firms (41.8% large [with >250 employees], 45.8% medium [<250

employees] and 12.4% small [<50 employees]) represented a variety of industries such as

computers and telecommunication, pharmaceutical, chemical, microelectronics, and food.

These industries represent well Israeli industrial firms that are involved in international

operations (Israel Export and International Cooperation Institute in 2014). In addition, the

sample was evaluated on firms' international scope where 51 firms marketed mainly to North

America; 47 mainly to Europe; 17 mainly to Asia; and 21 to other countries. This

geographical spread is consistent with statistics reported by Israel Export and International

Cooperation Institute in 2014. Hence, the sample was deemed to be an accurate

representation of the studied population. Firms were also of diverse IM function size (number

of IM employees averaged 25.9), international experience (averaged 21.5 years), and IM

intensity (averaged 63.6%). Such diversity and representativeness obtained a more complete

picture of marketing power, ensured data richness and strengthened the results generalizability.

Notably, in all firms there was a distinction between the IM and NIM functions. Respondents

(69.9% vice presidents, 15.9% general managers/directors, 8.8% CEOs, and 5.3% others)

were all well positioned to provide insights on IMs' and other functions' power. Notably, they

were from a uniform managerial level. Their international experience varied (3-41 years;

mean=17.12). A one-way analysis of variance (ANOVA) indicated no significant differences

between these categories of respondents regarding the study's constructs.

Data and Measure Validation. Comparing early with late respondents (Armstrong &

Overton, 1977) showed no differences on the study’s scales and comparing respondents and

non-included-respondents indicated no significant differences on demographics. To reduce

potential key informant response bias, confidence and familiarity items were included in the
 16

questionnaire asking respondents to assess the extent to which they believed their familiarity

with addressing the topic studied had allowed them to complete the survey confidently,

resulting in high means (confidence = 4.48/5, familiarity = 4.53/5). Notably, key informants

have been used in marketing research that has reinforced their responses validity on

performance-based outcomes (Krush et al., 2015).

Several steps were undertaken to ensure the scales' validity and reliability. First, we

used previously validated and reliable scales. Second, our scales' alphas exceeded .78

(>0.70). Third, exploratory factor analysis with principal component extraction and varimax

rotation was used to further examine the scales structure, which revealed that the measures

were unidimensional. All items were cleanly loaded onto their respective factors with high

item loadings (≥.57; Hair et al., 2010) except of one IMO item (Appendix), which was

excluded. Fourth, no evidence of common method bias was found and several ex-ante and

ex-post steps have been undertaken (Chang et al., 2010). Ex-ante procedures included using

senior informants with high levels of confidence and knowledge and assuring them of

anonymity, assuring unambiguous items and employing a mix of different measurement

formats in the questionnaire. In addition, the specified relationships in our model are not

overly simple (i.e., moderation). Ex-post procedures included marker variable and Harman

tests. An included item in the questionnaire ("I usually read business journals"), unrelated

theoretically to the model's latent variables, was not correlated with any of the model's

constructs. In addition, a Harman’s one-factor test where all the items were entered into a

single factor analysis produced five factors and accounted for 73% of the variance. No a

single factor emerged and no one factor accounted for more than 50% of the variance

emerged (Podsakoff et al., 2003). Furthermore, we demonstrate below the discriminant

validity of all constructs. Fifth, in support of convergent validity, all factor loadings were

statistically significant (Auh & Merlo, 2012) and values of average variances extracted

(AVE) for all constructs exceeded .50. Finally, in support of discriminant validity, we
 17

contrasted the squared correlation of each construct pair with the AVE of each construct and

found in each case the AVE exceeded the squared correlation (Fornell & Larcker, 1981).

Table 1 reports descriptive statistics of the constructs.

Table 1 - Descriptive Data and Correlation Matrix of Constructs

Construct Mean SD 1 2 3 4 5 6 7 8 9 10 11

1. Firm size (# 410 778 1.00

emply.)
2. IM size (# emply.) 25.98 82.91 .58 1.00
3. Firm Int. expe. 21.47 14.37 .08a .24 1.00
4. Personal Int. exp. 17.12 7.61 -.02 a -.07 a .07a 1.00
5. IM intensity 63.62 30.18 -.02 a .18a .20 -.24 1.00
6. Industry type n/a n/a .09 .07 .08a . 03a .07 1.00
7. IM power 3.97 .89 .15a .04a .13a -.26 .62 .17 1.00
8. NIM power 3.32 1.0 .12a -.18 a .02a .12a -.39 .09a -.12a 1.00
9. NM power 2.81 .81 .09a -.07 a .06a .05a -.06 a .05a -.15a -.04 a 1.00
10. IMO 3.92 .86 -.14 a -.02 a .00a -.18 a .37 .06 .55 -.17 a .06 a 1.00
11. Int. performance 3.79 .97 -.09 a .06a .05a -.17 a .42 .05 .47 -.20 -.09 a .39 1.00

Average variance extracted (AVE)

AVE n/a n/a n/a n/a n/a n/a .62 .73 .63 .55 .66
Square root AVE .78 .85 .79 .74 .81

a Not significant at the 0.01 alpha level (2-tailed)

n/a Single item measure

4. Analyses and Findings

4.1 Hypotheses Testing

Multiple regressions including moderated multiple regressions that are statistical

tests typically employed in moderation analyses (Andersson et al., 2014), were used to test

the hypotheses. In all tests, an initial regression was run with the control variables only. The

inter-scale correlations were lower than recommended (.90) and variance inflation factors (≤

2) were below the acceptable threshold of 10 (Hair et al., 2010), thus multicollinearity was

not a concern. To further minimize and check for the presence of multicollinearity, mean-

centered variables were used in the interaction termsa. All models were significant (p≤.01)

with at least medium levels (>0.09) of explained variances (R2) (Pedhazur et al., 1991).

Notably, the adjusted R2 values revealed no significant loss in predictive power compared to

a
When examining (inverted) U-shaped relationships, mean-centering the independent variable is unfortunate,
unneeded, shifts the results and complicates the computation of the turning point (Haans et al., 2015)
 18

the R2 values indicating results are generalizable (Hair et al., 2010).

Table 2 reports the unstandardized regression coefficients for the main effects of IM

power on international performance. Model 2 represents the linear relationship whereas

Model 3 the non-linear relationship. IM intensity was the only control that was related

positively with performance, consistent with the view that the larger firms' international

operations, the stronger the international performance. Industry type had marginal effects.

Notably, the power of NIM or NM functions did not affect performance. The ΔR2 (.063)

from the model with only controls (Model 1) to the model with the independent variable

(Model 2) was statistically significant.

Table 2 - Effects of IM Power on International Performance

Model 1 Model 2 Model 3

Control Variables
Firm size (# employees) .010 .001 .000
IM size (# employees) .001 .001 .001
Firm Int. experience -.001 -.002 -.003
Personal Int. experience -.009 -.003 -.003
IM intensity .112*** .105** .105*
Industry type .170 .063* .010*
NIM power -.056 -.089 -.092
NM power -.052 -.013 .011

Independent Variables
IM power .364** 1. 414**
IM power squared -.167**

R2 .201 .264 .336

R2 Adjusted .139 .199 .240
Δ R2 .063 .072
Sig. of Δ R2 p ≤ .0 p ≤ .0

* p≤ .10, ** p≤ .05, *** p≤ .01, One-tailed test is used because the hypotheses are directional.

In support of H1, there is evidence of an inverted U-shaped relationship between IM

power and international performance. First, the significant addition of the quadratic term to

the linear model increased R2 by 7% (p≤.0), which indicates that the non-linear model fits

the data better than the linear. Second, the coefficient for the IM power quadratic term was

negative and significant (β=-.167, p≤.05; Model 3). To ensure the correct interpretation of
 19

the results, we further explored the regression non-linear equation: International

performance = -0.167*(IM power)2 + 1.414*(IM power) and followed Lind and Mehlum's

(2010) procedure. First, not only is the IM power quadratic term significant and of the

expected negative sign, but also the linear direct effect of IM power on performance is

significant (β=.364, p≤.05; Model 2). Second, the slopes at both low and high ends of the

data range (1.08 > 0 [p≤.0]; -0.256 < 0 [p≤.1], respectively) are steep (Haans et al., 2015).

Finally, taking the first derivative of the non-linear equation and setting it to zero yields the

turning point at (-1.414)/2*(-0.167) = 4.2 < 5. Hence, the turning point is located within the

data range. In other words, in the range of interest, this function reaches its maximum when

IM power = 4.2 suggesting that for values below the maximum there is a positive

relationship between IM power and international performance. However, beyond that, the

relationship turns negative. As a follow-up, we report that 68.2% of the firms have IM power

below the turning point.

Table 3 reports the effects power asymmetry (Model 2) and moderation (Model 3) on

international performance. The effect of IM-NIM power asymmetry is insignificant (β=.037,

p>.10), however the IM-NM effect was negative and significant (β=-.31, p≤.05). Thus, H2b

is supported and H2a is not supported. Again, IM intensity was the only control that was

related positively with performance. H3 tested the interaction between power asymmetry and

IMO and predicted that the negative effect of differences between IMs' power and the power

of NIMs (H3a), and NM functions (H3b) on performance is weaker when IMO is stronger.

Table 3 Model 3 reports the results. The interaction of IM-NM power asymmetry and IMO

on performance was positive and significant (β=.161, p≤.01) in support of H3b. Notably,

IMO is positively related to performance in both models 2 and 3 however the IMO

coefficient is higher in the model where IMO interacts with IM-NM power asymmetry. This

indicates that international market-oriented behavior can reduce the negative effect of IM-

NM power asymmetry. In other words, while IMO directly enhances international

 20

performance, its interaction with power asymmetry may lead to an organizational climate in

which performance can flourish due to convergence of the partners’ interests. The effect of

the interaction of the IM-NIM power asymmetry and IMO on performance (H3a) was not

supported (β=-.059, p>.10). This may indicate that the power relationship between IMs and

NIMs is not affected by IMO. Finally, results in Table 3 model 3 also show that the

significant addition of the interaction terms to the main effects model increases R2 by 4%

(p≤.05).

Table 3 - Effects of Power Asymmetry and Moderators on International Performance

Model 1 Model 2 Model 3

Control Variables
Firm size (# employees) .010 .010 -.001
IM size (# employees) .001 .001 .001
Firm Int. experience -.002 -.001 -.003
Personal Int. experience -.009 -.006 .005
IM intensity .113*** .099*** .090***
Industry type .138 .091* .062

Main Effects
IM-NIM power asymmetry .037 .029
IM-NM power asymmetry -.31** -.031
IMO .316*** .370***

Moderation Effects
IM-NIM power asym. x IMO -.059
IM-NM power asym. x IMO .161***

R2 .196 .261 .302

R2 Adjusted .151 .195 .225
Δ R2 .064 .041
Sig. of Δ R2 p ≤ .01 p ≤ .05

* p≤ .10, ** p≤ .05, *** p≤ .01, One-tailed test is used because the hypotheses are directional.

4.2 Post Hoc Analyses and Robustness Checks

We conducted several robustness tests to assess the stability of our findings and to

gain further insights. First, we ran our main models without the controls to see if our basic

hypotheses are grounded statistically and we received similar results. The significance levels

of the included variables do not change substantially and the signs of the coefficients remain

stable. Thus, our hypotheses are actually grounded statistically.

 21

Second, to elaborate on the finding that IM-NIM power asymmetry did not affect

performance we ran additional models. The organizational context can play a role in

determining the outcomes of power asymmetry thus whether a firm's operation is domestic

or international driven may determine the effect of IM-NIM power asymmetry on

performance. Domestic driven firms may benefit from disproportionally powerful NIMs

whereas international driven firms may benefit from disproportionally powerful IMs. Thus,

we split the sample into 2 sub samples with less and more than 50% IM intensity. Although

the significance levels decrease because of the smaller sample sizes, the results were stable

and paralleled those of the main models (Table 3).

Third, we operationalized power asymmetry without distinguishing which function

has more or less power. To gain further understanding on situations in which IMs posses

very high power, we tested for additional models parallel those reported in Table 3. In the

operationalization of power asymmetry, we manipulated the power of IM to be very high by

imposing the powers of NIM and NM functions to equal zero. It might be argued that NIM

and NM powers may affect the tested relationships, thus we included them as controls. The

results were similar to the main models (Table 3) with two exceptions. First, IMO had a

positive and significant relationship with performance in the main and current models;

however, in the current model the magnitude of the IMO coefficient was lower. Second and

more essentially, power asymmetry related significantly and negatively with performance.

Notably, the inclusion of the interaction term (with IMO as a moderator) resulted in

significant and negative coefficient. Hence, where IM is very powerful, IMO deteriorated

the negative effect of IM-other functions power asymmetry on performance.

5. Discussion
This research aims to study whether powerful IM functions benefit international

performance in an industrial marketing context. It also examines the consequences and

moderators of power differences between IM and other functions. The simultaneous

 22

examination of various functions allows observation into the interactions of IM with other

subunits. Moreover, it allows refining the observation into the marketing functions, that is,

the interaction between IMs and NIMs. Our results indicate that IMs are powerful and IMs'

power has a non-linear relationship with performance. IM-NM power asymmetry is related

negatively with performance. However, in the presence of IMO this negative effect is

weaker. IM-NIM power asymmetry is not related to performance. In the subsequent

sections, we discuss these findings.

IM Functions' Power. The means of the power of IM, NIM and NM functions were

3.97, 3.32 and 2.81 respectively with moderate SDs (Table 1). The means were invariant

across firm size and industry. This is consistent with the view that strong marketing

functions are not necessarily associated with big departments (Webster et al., 2005). This

may also initially imply for an organizational shift in power from non-marketing functions in

industrial firms to marketing. A key contribution of our study is that IM functions enjoy a

relative "first-class" status. Obviously, IMs appear to be the most powerful functions. NM

functions have the lowest power mean and NIMs stay relatively in the middle. The most

critical function tends to be the most powerful and marketing is often seen as more powerful

because of its boundary-spanning role, which affects its relative power (Papke-Shields &

Malhotra, 2008). While in recent years commentators have been questioning whether the

NIM functions are undervalued or losing power, IMs appear to be powerful. Homburg et al.

(2015) demonstrate that the marketing departments have lost significant influence in the last

decades, however they do not account for marketing's power and power asymmetry, and not

for IM functions in B2B context.

Our results also reflect differences in power among functions, which relate to our

power asymmetry construct. Interestingly, though its operationalization does not determine

what function has less or more power in comparison to other, we observed that for 13.3% of

the firms in the sample the term (IM power - NIM Power) is negative. Namely, in 86.7% of
 23

the firms, the IM function is perceived as more powerful than the NIM function. Similarly,

for 7.1% of the firms the term (IM power - NM Power) is negative, namely, in 92.9% of the

firms, the IM function is perceived as more powerful than NM functions. These reinforce the

finding that IMs are powerful and reflect again power asymmetry among functions.

IM Functions and International Performance. Our findings suggest that powerful

IMs contribute to international performance and that IM power has the strongest effect on

performance (Table 2). These findings parallel Auh and Merlo's (2012) findings in NIM

context and supplement Gnizy and Shoham's (2014) findings in IM context who find that

influential, rather than powerful, IMs contribute directly to performance. Homburg et al.

(2015) find that the marketing's influence is the utmost among all functions and none of the

NM functions' influence, except of sales, enhances performance. Their key implication is

that firms should seek to empower their marketing departments. However, they do not

indicate to what extent. In addition, they do not account for international performance. Our

findings support an inverted U-shaped relationship between IMs' power and performance,

which has not been shown in prior research. This implies that while there are positive returns

to IMs' power, beyond a certain level it impairs performance. Hence, IMs should not have

full power. As the IMs' power rises from low to higher levels, its advantages come into play

because IMs can use their power to recruit others to execute IM actions, which creates

synergy in attaining IM objectives and thus enhances performance. However, beyond this

level of power, IMs might use their excessive power to impose their concepts on others,

which may result in other functions' antagonism and lead to less and ineffective

collaboration in successful implementation of IM operations. Given that a firm is a

constellation of various functional groups and no function is self-sufficient, other functions

should also retain some level of power with relation to IMs' power.

IM-NIM Power Asymmetry. Our results indicate that power asymmetry between IMs

and NIMs is not related to performance. The post hoc tests supported this finding. These
 24

results are interesting and can be explained by several arguments. First, we looked for firms

with independent IMs and NIMs. Thus, a priori these functions are less dependent on each

other and therefore less affects each other's power. In addition, IMs rather than NIMs are

held accountable for the direct outcomes of international operations. These imply that power

asymmetry between them does not affect international performance. Second, IM functions

in international firms appear to be so important that their power asymmetry with NIMs does

not affect international performance, which underscores IMs' position. In other words, IMs

do not need to rely on NIMs' power to enhance performance. IMs are less dependent on

inputs from NIMs, which is also supported by our finding on the role of IMO in its effect of

IM-NIM power asymmetry on performance (see below). This argument reinforces our

assumption that IMs are developing into a different functional business field, underlines the

need to distinguish between IMs and NIMs, and supports our decision to study them as two

distinct functional groups. Third, IMs and NIMs are both marketing, "sister" functions that

share similarities, i.e., the marketing concept, which should increase the effectiveness of

their exchanges. This closeness provokes mutual sympathy and appreciation of the other

group’s work. Though there may be some conflicting interests between these neighboring

functions, due to their similarities they are able to jointly negotiate and obtain required

internal resources or share them. If resource sharing takes place, their difference in power is

less likely to affect performance. Conversely, one can argue that since IMs and NIMs

compete on the same resources, one function's power is a hindrance to the other. However,

given their different markets, customers, etc., the power of one function needs not affect the

other. This raises the possibility of symmetrical power with relation to performance. Finally,

these findings must be interpreted in light of the finding discussed ahead regarding the

interaction of IM-NIM power asymmetry and IMO.

IM-NM Power Asymmetry. Our results indicate that power asymmetry between IM

and NM functions is negatively related to performance. This can be explained by somehow

 25

contrasting views. Marketing may exercise influence “by concentration”, i.e., when the

marketing department is powerful, or “by diffusion”, i.e., when the firm is strongly market

oriented (Auh & Merlo, 2012). When the IM function is concentrated, it is less dispersed in

the firm and may be perceived as a silo, which may increase its perceived power and

therefore its power difference with other functions. In this situation, IM may become a

monologue and disconnected from the firm's people. IM-NM power asymmetry may lead to

conflicts and political behaviors and impede coordinated efforts to achieve IM goals, which

harm performance. On the other hand, when IM is diffused, it is more dispersed and may

lose power in comparison to other functions, which again may result in power asymmetry

between the functions. However, dispersion affects performance negatively (Engelen, 2011).

In this situation, it is conceivable that IM-NM power asymmetry impairs performance.

The Role of IMs. Studying the IM function and IMO domains simultaneously

provides insights on IMs' role in industrial firms. Interestingly, the interaction of IM-NIM

power asymmetry and IMO did not affect performance. This finding may indicate the un-

relatedness of the NIM functions to IMO or to an inadequate adoption of the international

market orientation by the non-international marketing function. While IMO is a concept that

affects the whole organization, we speculate that NIMs are less related to IMO. It would

appear that IMs' high involvement in IMO due to their strong position enable them to

manipulate the IMO processes to enhance their impact on performance without or with little

involvement of NIMs. The lack of correlation between NIM power and IMO (r=-.17,

p>0.05) supports this view. Since the organizational context plays a role in determining the

consequences of power asymmetry (Atuahene-Gima & Evangelista, 2000) and although we

did not include domestic market orientation in our model, a possible explanation may be that

firms may have different levels of market orientation across different business operations,

export and domestic, and these orientations differ (Cadogan et al., 2003).

With regard to the second interaction interplay in our model, IMO attenuated the
 26

negative effect of IM-NM power asymmetry on performance, which indicates a contingent

perspective whereby the effect of power asymmetry on performance is not universal, but

rather depends on the level of intervening IMO. IMO is beneficial in these conditions

because it reduces the uncertainty associated with the IM processes given their divergence

from firms' domestic markets and operations. Prior research suggests that differences in the

roles and power of the marketing functions result from differences in the implementation of

the marketing concept (Kohli & Jaworski, 1990). Thus, IMO may rely on a disproportionally

powerful IM function to establish meaningful points of difference. For IMs, such points

could be their unique knowledge on international markets. For NM, this could be their

ability and inclination to work out IMs' concepts and plans. In addition, goal alignment can

build trust and moderate asymmetry (Marcos-Cuevas et al., 2015) and asymmetry can be

viewed as a mean of effective coordination, integration, and goal attainment (Hingley et al.,

2015a). If IMO is used to align goals, share information and increase coordination, then trust

and consensus among units are increased which should decrease negative effects of power

asymmetry. Additionally, when several functions share the implementation of IMO through

responsiveness to market intelligence, they are more likely to be highly committed to the

execution and results that increases the likelihood of successful implementation of IM

activities and again decreases the negative effects of power differences between the involved

functions.

Our results indicate that IMO had a direct positive effect on international

performance (Table 3, Models 2 and 3). Verhoef and Leeflang (2009) did not find support

for a direct relationship between marketing influence and performance and attributed it to an

increase in market orientation at the expense of marketing's influence. This study shows that

powerful IMs are associated with enhanced performance beyond the contribution of a market

orientation. These findings parallel Auh and Merlo's (2012) findings for NIM functions and

Gnizy and Shoham's (2014) findings for influential IMs that contributed directly and
 27

indirectly to international performance. A strategic decision to adopt an IMO potentially has

a reviving effect on the IM function, since IM is the boundary-spanning function that serves

as a fundamental interface with the external environments (Homburg et al., 1999; Merlo,

2011). IM provides the firm with necessary resources to compete internationally. This study

regenerates the power of the IM function as a boundary-spanning responsibility. It can be

argued that the IM function's boundary-spanning capabilities might be even more critical in

an international setting. A domestic B2B firm may be dominated by the local culture since

the employees and targeted customers have the same cultural profile. The more international

a firm becomes, the more important marketing becomes and it is the IM function that brings

in key and unique knowledge on foreign markets (e.g., on cultural and legal environments)

and is responsible for coordinating external relationships (e.g., customers with different

cultures), which are critical in the success of international operations. The IM function has

also inputs on important issues (e.g., has a domestic product international potential or a new

product is required? What components of the marketing mix need to be adapted, if any) that

assists the firm to overcome obstacles in internationalization. These may place a powerful

IM function rather than the NIM function in a preferred position.

6. Managerial Implications and Conclusions

IM managers and top management should recognize circumstances where functional

power and power asymmetry affect performance and how to use them productively and

wisely. Power is a property of the social relation and not an entity's attribute and thus can be

managed. The achievement of desired outcomes is the basis of the power concept. Hence,

power must be seen as a tool managers can get something done with. While “power is to

organization as oxygen is to breathing” (Fleming & Spicer, 2014; p. 2), excessive power of

or power differences among functions can detriment performance. The management of IMs'

power may be of high importance for international companies because it ultimately affects

(positively and negatively) international performance. From a tactical point of view, the
 28

IMO process and the power distribution activity should not be isolated domains of

managerial decision-making because their interaction has performance implications.

How IM managers exercise power shapes their relationships with other functions and

affects IM outcomes. Establishing a link between IMs' power and performance is only part

of the challenge since too low or too high levels of IMs' power may hinder performance. IM

managers should keep from the temptation to use their full power to overemphasize attention

to IM operations but should gain sufficient levels of power. They hold on the power parity

that contributes optimally to performance though such parity is not trivial to determine.

Managers should initially rely on intuition to set the level of power to achieve best

outcomes. They can use soft power techniques that require collaborative, cooperative, and

trust-based behaviors without resorting to head-on conflicts (Hingley et al., 2015a). IM

managers also need to persuade other organizational members of the advantages of

maintaining IMs' power. They can take actions to be proactive in balancing their power with

other functions. A way to achieve this could be the promotion of IMO, which is beneficial in

many organizational conditions and certainly reduces negative effects of IM-NM power

asymmetry. IM managers must implement conditions, probably different from that of

organizational domestic operations, likely to enhance the outcomes of their operations. They

can promote carefully activities that infuse their concepts and processes by promoting

information exchanges (an IMO's element) on foreign markets among units. Information can

be used to shift power or reduce power imbalance (Brown, 1994) because it increases

partaking and longer-lasting persuasion, and decreases the likelihood of intra-firm conflicts.

Information sharing can be also used to shape other employees' view of IM's importance.

Through IMO's dissemination and responsiveness elements, other units can be invited to

participate in the IM processes. IMs can formulate a general IM strategic direction but

devolve power to other functions to implement IM activities. IM mangers can also rely on

informal mechanisms of trust and coordination designed to sanction a more balanced power
 29

among functions that can enhance the power of the involved functions. Where no formal

power bases exist, IM managers can use their influence over other functions to gain a power

base. IMO, usually the responsibility of the IM function, can be used as an influence tactic.

For top management wanting to improve international performance, the IM

functions, their relative power, and IMO are useful means. They should realize that although

power has often-negative connotations in intra-organizational relationships, without power, a

fundamental part of organizational life, firms would be unable to function. Top management

is responsible for managing power structures and deploying power among functions.

However, acceptance of asymmetry might lead to workable co-creation even in imbalanced

situations (Hingley et al., 2015a). Top management should assess the current level of IMs'

power and conclude whether it should be altered and balanced. Mismanagement of IM

power due to inertia or bounded rationality may lead to decline in performance. Though

empowering IM functions in international firms is conceivable, excessive power of IMs

should be prevented. We can envision scenarios where top management charges IM to

reduce its power on behalf of improved performance. On the other hand, disempowering

other functions at the expense of IM can create insurgency that erodes the power of their

leadership (Gebhardt et al., 2006). Thus, top management should look for ways to

"symmetrize" power to be more equally distributed such that it leads to more stability and

little need to be dependent on one certain function to achieve enhanced performance. Thus,

top management can strive to position formally and properly IM within the firm,

communicate IMs' value to other functions, as well as their relevance and potential scope of

actions. Importantly, distribution of power among functions is contingent upon IMO. Top

management should place pressure on all functions to embrace the international marketing

concept, which ensures effective exchanges, reciprocal involvement in, and constructive

adoption of IM activities, resulting in improved performance.

IM functions and IM processes can coexist within the firm, not one at the expense of
 30

the other. IMs have important roles both as a function and as an orientation strengthening the

view that IM is not merely a set of organizational processes that every employee can

implement but also a distinct group of professional international marketers (Auh & Merlo,

2012). Thus, IM functions and IMO should be empowered simultaneously because they

benefit performance.

Finally, this research contributes to the long-lasting discussions within industrial

marketing research about the consequences of power and asymmetrical power. Power should

not be perceived as an end but be managed with appropriate levels and combined with

organizational processes. IM functions may continue to gain power in firms since nowadays

managers in all industries are under increasing pressure to internationalize their firms. While

this growth may be imperative, international firms need to realize what the best ways are for

nesting distinct IM functions and processes within the firm.

7. Limitations and Directions for Further Research

This study is subject to several limitations and draws attention to potentially future

research areas. First, we studied IMs' power rather than IMs' influence. Future research can

study influence asymmetry among functions, a phenomenon scarcely tackled in the

literature. Furthermore, power and influence of IMs can be studied simultaneously to

provide a more comprehensive view of these two related constructs. Second, our study

focused on the power dynamics of the IM functions. Research that lies outside the scope of

this study may raise additional interesting insights and allows more generalization in the

context of the NIM functions (e.g., NIM-NM power asymmetry). Furthermore, a replication

of the study in firms that do not have separate IMs from NIMs would prove insightful. Third,

we examined industrial firms but did not focus on particular business sector (e.g., retailing

and food supply). Future research may provide more fine-grained insights in a certain

business sector. Fourth, we measured the functions' relative power and not one certain

function compared to another specific function (e.g., IM's power compared to NIM's power).
 31

Future research can explore the effects of these refined dyadic measures. Fifth, this study

identified a negative relationship between power asymmetry and performance, however not

why and how such a relationship evolved. Such understanding can provide insights that are

more complete. Sixth, we operationalized power asymmetry without a distinction which

function is more powerful. Such a distinction can allow addressing the directionality of

power and understanding better power inequality consequences. Moreover, key concepts

surrounding power asymmetry such as trust and commitment (Hingley et al., 2015a) can be

included in future models. Seventh, we studied IMO as a firm strategy. Other

orientations/strategies and potential moderators can be studied (e.g., entrepreneurial

orientation to study more specifically IM-R&D power asymmetry). Furthermore, our

findings did not indicate a role for IMO in the IM-NIM power asymmetry. Further research

can elaborate on this issue. An interesting direction for future research would be the

inclusion of both IMO and domestic market orientations. Eight, though our respondents

provided a more complete picture of power distribution in firms, adding respondents from

different disciplines in the firm could provide additional perspectives. The viewpoint of

respondents on both power sides (i.e., the strong and weak parties) may suggest potential

new insights on power. Finally, recently the dispersion of the marketing function and

activities is subjected to increasing attention. Krush et al. (2015, p. 36, 46) point out that

"intra-organizational dispersion shifts the power dynamic within the organization…

Dispersion of marketing is often a non-structural dimension of the marketing function’s

design". Similarly, the marketing function's power can be approached as a non-structural

phenomenon and power asymmetry may reflect such power dynamics. Thus, a dispersed

configuration may take shape in power asymmetry. Our conceptualization of power

asymmetry offers another perspective of dispersion and may advance research on the

dispersion of the marketing function.

 32

References

Andersson, U., Cuervo-Cazurra, A., & Nielsen, B.B. (2014). From the editors: explaining
iInteraction effects within and across levels of analysis. Journal of International
Business Studies, 45, 1063–1071.
Armstrong, S.J., & Overton, T.S. (1977). Estimating nonresponse bias in mail surveys.
Journal of Marketing Research, 14(3), 396–402.
Atuahene-Gima, K., & De Luca, L.M. (2008). Marketing's lateral influence strategies and
new product team comprehension in high-tech companies: A cross-national
investigation. Industrial Marketing Management, 37(6), 664-676.
Atuahene-Gima, K., Slater, S.F. & Olson, E.M. (2005). "The contingent value of responsive
and proactive market orientations for new product program performance. Product
Innovation Management, 22, 464-482.
Atuahene-Gima, K. & Evangelista, F. (2000). "Cross-functional influences in new product
development: An exploratory study of marketing and R&D perspectives.
Management Science, 46(October), 1269–1284.
Auh, S., & Merlo, O. (2012). "The power of marketing within the firm: It's contribution to
business performance and the effect of power aAsymmetry. Industrial Marketing
Management, 41, 861–873.
Beamish, P., Karavis, L., Goerzen, A., & Lane, C. (1999). "The relationship between
organizational structure and export performance. Management International Review,
39(1), 37-45.
Bijmolt, T., & Zwart, P. (1994). The impact of internal factors on the export success of
Dutch small and medium-sized firms. Journal of Small Business Management, 32(2),
69-82.
Blesa, A., & Ripolle, M. (2008). The influence of marketing capabilities on economic
international performance. International Marketing Review, 25(6), 651-673.
Brown, A.D. (1994). Politics, symbolic action and myth making in pursuit of legitimacy.
Organization Studies, 15(6), 861.
Cadogan, J.W., Sundqvist, S., Salminen, R.T. & Puumalainen, K. (2005). Export marketing,
interfunctional interactions, and performance consequences. Journal of the Academy
of Marketing Science, 33(4), 520-535.
Cadogan, J.W., Charles, C.C., & Yeung Li, E.K. (2003). Export market-oriented behavior
and export performance. The moderating roles of competitive intensity and
technological turbulence. International Marketing Review, 20(5), 493-513.
 33

Carneiro, J., da Rocha, A., & da Silva, J.F. (2011). Determinants of Export Performance: A
Study of Large Brazilian Manufacturing Firms. Brazilian Administration
Review, 8(2), 107-132.
Chang Sea-Jin, van Witteloostuijn, A, & Eden, L. (2010). From the Editors: Common
Method Variance in International Business Research. Journal of International
Business Studies, 41, 178–184.
Casciaro, T. & Mikolaj Jan Piskorski (2005). Power Imbalance, Mutual Dependence, and
Constraint Absorption: A Closer Look at Resource Dependence
Theory. Administrative science quarterly, 50(2), 167-199.
Daft R.L. (2010). Organizational theory and design. Tenth Edition, South-Western Cengage
Learning USA.
Das, M. (1994). Successful and Unsuccessful Exporters from Developing Countries: Some
Preliminary Findings. European Journal of Marketing, 28(12), 19-33.
Dawes P.L., & Massey, G.R. (2006a). The Effects of Influence Tactics, Manifest Influence
and Interpersonal Trust on Working Relationships Between Marketing Managers and
Sales Managers. Working Paper Series 2006.
Dawes P.L., & Massey, G.R. (2006b). A Study of Relationship Effectiveness between
Marketing and Sales Managers in Business Markets.
Engelen, A. (2011). Which Department Should Have More Influence on Organization-level
Decisions? A Strategy-dependent Analysis. Journal of Strategic Marketing, 19(3),
229–254.
Fleming, P., & Spicer, A. (2014). Organizational Power in Management and Organization
Science. The Academy of Management Annals, Published online: 02 Jan 2014,
http://dx.doi.org/10.1080/19416520.2014.875671.
Fornell, C. & Larcker, D. (1981). Evaluating Structural Equation Models with Unobservable
Variables and Measurement Error. Journal of Marketing Research, 18 (February),
39–50.
Gnizy, I., & Shoham, A. (2014). Uncovering the Influence of the International Marketing
Function in International Firms. International Marketing Review, 31(1), 51-78.
Gebhardt, G.F., Carpenter, G.S., & John F. Sherry Jr. (2006). Creating a Market Orientation:
A Longitudinal, Multifirm, Grounded Analysis of Cultural Transformation. Journal
of Marketing, 70(4), 37-55.
 34

Griffin, A., Josephson, B. W., Lilien, G., Wiersema, F., Bayus, B., Chandy, R., ... & Spanjol,
J. (2013). Marketing’s roles in innovation in business-to-business firms: Status,
issues, and research agenda. Marketing Letters, 24(4), 323-337.
Hair, F. Joseph Jr., William, C. Black, Barry J. Babin, and Rolph E. Anderson (2010).
Multivariate Data Analysis. Seventh edition, Prentice Hall, Upper Saddle River, NJ
07458.
Haans, RFJ., Pieters, C., & He, Zi-Lin (2015). Thinking about U: Theorizing and Testing U-
and inverted U-shaped Relationships in Strategy Research. Strategic Management
Journal, forthcoming.
Harris, L.C., Ogbonna, E. (2003). The Organization of Marketing: A Study of Decentralized,
Devolved and Dispersed Marketing Activity. Journal of Management Studies, 40(2),
483-512.
Hickson, David J., C. R. Hinings; C. A. Lee, R. E. Schneck; J. M. Pennings (1971). A
strategic contingency theory of intraorganizational power. Administrative Science
Quarterly, 16(2), 216-229.
Hingley, M., Angell, R. & Campelo, A. (2015). Introduction to the Special Issue on Power
in business, customer, and market relationships. Industrial Marketing Management,
48, 101-102.
Hingley, M., Angell, R. & Lindgreen, A. (2015). The current situation and future
conceptualization of power in industrial markets. Industrial Marketing Management,
48, 226-230.
Homburg, C. Arnd Vomberg, Enke, M., & Grimm, P.H. (2015). The loss of the marketing
department’s influence: is it really happening? And why worry? Journal of the
Academy Marketing Science, 43, 1-13.
Homburg, C., Workman, J., & Krohmer, H. (1999). Marketing’s influence within the firm.
Journal of Marketing, 63(2), 1–17.
Howard C.A. (2003). The Internationalization of The Marketing Discipline Leadership in
International Business Education and Research, Research in Global Strategic
Management, 8, 89-106.
Kohli, A., & Jaworski, B.J. (1990). Market orientation: The construct, research propositions
and managerial implications. Journal of Marketing, 54(2), 1–18.
Kohli, A.K, (1989). Determinants of influence in organization buying: a contingency
approach. Journal of Marketing, 53, 50-56.
 35

Kotler, P., Rackham, N. &Krishnaswamy, S. (2006). Ending the war between sales and
marketing. Harvard Business Review, 84 (7), 68-78.
Krush, M.T., Sohi, R.S., & Saini, A. (2015). Dispersion of Marketing Capabilities: Impact
on Marketing's Influence and Business Unit Outcomes. Journal of the Academy
Marketing Science, 43, 32-51.
Kumar, N.(1996). The Power of Trust in Manufacturer-Retailer Relationships. Harvard
Business Review, (November- December), 92-106.
Lamberti, L., & Noci, G. (2009). Marketing power and CMO power: could market
orientation break the link? An exploratory case study. Journal of Strategic
Marketing, 17(5), 327–343.
Lind, JT, Mehlum, H. (2010). With or without U? The appropriate test for a U-shaped
relationship. Oxford Bulletin of Economics and Statistics, 72(1), 109-118.
Marcos, C., Javier Saara Julkunen, & Gabrielsson, M. (2015). Power symmetry and the
development of trust in interdependent relationships: The mediating role of goal
congruence. Industrial Marketing Management, 48, 149–159.
Merlo, O. (2011). The Influence of Marketing from a Power Perspective. European Journal
of Marketing, 45 (7/8), 1152-1171.
Merlo, O., & Auh, S. (2009). The Effects of Entrepreneurship, Market Orientation, and
Marketing Subunit Influence on Firm Performance. Marketing Letters, 20 (3), 295-
311.
Moorman, C., & Rust, R.T. (1999). The Role of Marketing. Journal of Marketing, 63 (4),
180-97.
O'Sullivan, D., & Abela, A. V. (2007). Marketing performance measurement ability and firm
performance. Journal of Marketing, 71(Aprill), 79-93.
Papke-Shields, K., & Malhotra, M.K. (2008). Manufacturing Managers’ Perceptions of
Functional Power in Mmanufacturing Organizations. International Journal of
Operations and Production Management, 28(9), 858-874.
Pedhazur, E.J., & Schmelkin, Liora Pedhazur (1991). Measurement, Design, and Analysis:
An Integrated Approach. Hillsdale, NJ: Erlbaum.
Pelham, A.M., & Wilson, D.T. (1996). A Longitudinal Study of the Impact of Market
Structure, Firm Structure, Strategy, and Market Orientation Culture on Dimensions
of Small-Firm Performance. Journal of the Academy of Marketing Science, 24(1),
27-43.
 36

Podsakoff, P., MacKenzie, S., Lee, Jeong-Yeon, & Podsakoff, N. (2003). Common Method
Biases in Behavioral Research: A Critical Review of the Literature and
Recommended Remedies. Journal of Applied Psychology, 88(5), 879-903.
Rust, R. T., Ambler, Tim, Carpenter, Gregory S., Kumar, V., & Srivastava, Rajendra K.
(2004). Measuring marketing productivity: Current knowledge and future directions.
Journal of Marketing, 68, 76–89.
Schultz, D.E. (2005). MR Deserves Blame for Marketing’s Decline. Marketing News,
(February 15), Vol. 7.
Song, M., Di Benedetto, C.A., & Nason, R.W. (2007). Capabilities and financial
performance: The moderating effect of strategic type. Journal of the Academy of
Marketing Science, 35(1), 18–34.
Verhoef, P.C., & Leeflang, Peter S.H. (2009). Understanding the Marketing Department's
Influence within the Firm. Journal of Marketing, 73(2), 14-37.
Vyas, R., & Souchon, A. L., (2003). Symbolic use of export information: A
multidisciplinary approach to conceptual development and key consequences.
International Marketing Review, 20(1), 67-94.
Walker, O.C., Jr., & Ruekert, R. (1987). Marketing's role in the implementation of business
strategies: A critical review and conceptual framework. Journal of Marketing,
51(July), 15–34.
Webster Jr, F. E., Malter, A. J., & Ganesan, S. (2005). The decline and dispersion of

marketing competence. MIT Sloan Management Review, 46(4), 35–43.

View publication stats

Appendix - Scales and Reliability Details

Construct Items Reliability

(Source) (α)
Functional (1=strongly disagree; 5=strongly agree) .81 (IM)
Power (of IM, .88 (NIM)
(1) The functions performed by this function (unit) are generally considered
NIM and NM to be more critical than others
.78 (NM)
Functions) (2) Top management considers this function to be more important than others
(3) It is easier to recruit employees for this function as compared to others'
(Kohli, 1989) (4) This function tends to dominate others in the affairs of the organization
(5) This function is generally regarded as being more powerful than others
IMO (1=very uncommon; 5=very common) .86
(1) All our functions are responsive to and integrated in serving international
(Pelham and target markets
Wilson, 1996) (2) Our firm's strategy for competitive advantage is based on our thorough
understanding of our cross border customer needs
(3) All our managers understand how the entire business can contribute to
creating cross border customers value
(4) Our firm responds quickly to negative cross border customer satisfaction
information throughout the organization (excluded)
(5) Our firm's market strategies are to a great extent driven by our
understanding of possibilities for creating value for cross border customers
(6) Information on customers, marketing success, and marketing failures
abroad is communicated across functions in the firm
(7) Top managers discuss competitive strengths and weaknesses in
international markets very frequently
(8) Our firm takes advantage of targeted opportunities to take advantage of
foreign competitors' weaknesses very frequently
(9) If a major foreign competitor were to launch an intensive campaign
targeted at our customers, we would implement a response immediately
International (1=strongly disagree; 5=strongly agree). .84
Performance
Over the past years, our firm's international operation:
(1) Resulted in a high volume of sales
(2) Accomplished rapid growth
(3) Was Profitable