Introduction
Many researchers
and consultants recommend that the various functions of a business,
particularly manufacturing and marketing, be on equal footing in the
strategy development process. However, research evidence suggests that
this is not necessarily true in practice. Typically, there has been
limited co-operation between the marketing and manufacturing functions.
Some researchers have found manufacturing in many firms to be reactive
to marketing, which may be detrimental to the business.
Under a
marketing-led unbalanced business strategy, manufacturing strategy may
drift into obscurity and may actually become a drag on the company.
One possible consequence is that manufacturing priorities and strategies
may become rudderless and not support business or marketing strategies.
By definition,
strategy content refers to priorities and pattern of decisions in the
pursuit of competitive advantage. The content of corporate strategy
for multi-business corporation may dwell on attaining and maintaining
a competitive portfolio of businesses. The content of a business strategy
may dwell on issues of product line, differentiation, cost, and other
factors that provide sustained competitiveness to the business. Each
business unit within a corporation usually has its own unique business
strategy spawning several functional strategies such as marketing and
manufacturing strategy that ensure the success of the business strategy.
The process
by which strategy is formulated and implemented addresses how strategic
goals and decisions are reached in an organizational setting. A lopsided
strategy development process can contribute to goal incongruence among
functions. Goal incongruence refers to different functions of the same
business pursuing incongruent goals; an example would be the marketing
function pursuing strategic goals of product variety, which manufacturing
is not capable of delivering. Where strategic goal congruence between
marketing and manufacturing decreases, the potential for conflict between
the two functions increases, which leads to poor business performance.
Participating
companies and data collection
The companies
described in this study are a total of three manufacturers in the U.S.
and U.K.; one in the U.S. and two in the U.K. Table 1 summarizes the
companies. We visited the factories included in this study, and one
of the authors made a live presentation for about 30 minutes to manufacturing
and marketing managers before they were asked to complete a questionnaire.
The purpose
of the study was to find answers to the questions - what is the nature
and extent of strategic goal congruence between marketing and manufacturing
managersand, are marketing and manufacturing equally involved in all
the various steps of strategy development.
We used
Figure 1 as the basis for describing the strategy development process
to managers from manufacturing and marketing. The five-step process
in Figure 1 proposed and tested by Mills and othersi has undergone development
over a number of years and has been successfully applied in a range
of companies. An adapted version of the five steps is:
Step
1: Identify product groups.
The company’s
products are divided into groups. Products within a group share a similar
market or competitive environment.
Step
2: Assess the objectives of the business and its functions.
This stage
generates a set of objectives that are rooted in the business strategy.
Step
3: Assess the current strategy.
Identify
current strategy; use a strategy development tool if necessary.
Step
4: Assess if current strategy could deliver the business objectives.
This stage
identifies gaps in current and planned strategic actions. It can assess
the fit between company strategy and its functional (marketing, manufacturing,
and other) capabilities.
|
|
| Figure
I: Outline of the Strategy Process Presented (Adapted from Mills,
et al., 1996) |
Step
5: Assess how you would navigate towards business objectives.
This stage
is the actual strategy formulation process.
After the
presentation, the managers were given a short three-page questionnaire
to gather information about the process of strategy development in their
company. Some of the questions asked the managers to rate the extent
of use of the various steps in Figure 1 in their plant.
Findings
