In principle, all business functions should interact harmoniously to pursue the firmâ€™s overall objectives. In practice, however, interdepartmental relations are often characterized by deep rivalries and distrust. Some conflict stems from differences of opinion as to what is in the companyâ€™s best interests, some from real trade offs between departmental well-being and company well-being, and some from unfortunate stereotypes and prejudices.
In the typical organization, each business function has a potential impact on customer satisfaction. Under the marketing concept, all departments need to â€œthink customerâ€ and work together to satisfy customer needs and expectations. The marketing department must drive this point home. The marketing Vice President (VP) or CMO has two tasks: (1) to coordinate the companyâ€™s internal marketing activities and (2) to coordinate marketing with finance, operations, and other company functions to serve the customer.
Yet, there is little agreement on how much influence and authority marketing should have over other departments. Typically, the marketing VP must work through persuasion rather than authority. Other departments often resist changing their ways of working to fulfill the customerâ€™s interests. Inevitably, departments define company problems and goals from their viewpoint, so conflicts of interest are unavoidable. Breakdowns in communication further exacerbate the problem. Consider the following potential negative reactions that marketing can receive from different functional groups.
Engineering comes into conflict with marketing executives when the latter want several models produced, often with product features requiring custom components. Engineers often think of marketing people as inept technically, as continually changing priorities and as not fully credible or trustworthy.
Purchasing Executives see marketing executives pushing for several models in a product line, which requires purchasing small quantities of many items rather than large quantities of few items. They think that marketing insists on too high a quality for materials and components. They also dislike marketingâ€™s forecasting inaccuracy, which causes them to place rush orders at unfavorable prices or to carry excessive inventories.
Financial Executives suspect that marketing forecasts are self serving. They think marketers are too quick to slash prices to win orders, instead of pricing to make a profit. They claim that marketers know the value of everything and cost of nothing.
Accountants see marketing people as lax in providing sales reports on time. They dislike the special deals salespeople make with customers because these require special accounting procedures. Credit officers evaluate potential customersâ€™ credit standing and deny or limit credit to the more doubtful ones. They think marketers will sell to anyone including those from whom payment ids doubtful.
Companies need to develop a balanced orientation in which marketing and other functions jointly determine what is in the companyâ€™s best interests. Solutions include joint seminars to understand each othersâ€™ viewpoints, joint committees and liaison personnel, personnel exchange programs, and analytical methods to determine the most profitable course of action.
Perhaps the best solution is for marketing to periodically propose a function-to-function meeting with departments where greater understanding and collaboration is warranted. Even if each function indulges in stereotypical charges and complaints about the other, such a meeting can lead to a clearing of the air and a basis for a more constructive collaboration. Each department needs to understand the operating logic of the other departments. When departments work together toward common goals, marketing is more effective.
A case of Procter & Gamble confirms the collaboration and understanding between departments. With 19 of their 20 largest brands gaining share and a stock price that doubled, Procter & Gamble was clearly on roll during 2002-2004. Organic growth in core business provided much of the impetus. P&Gâ€™s new product hit rate, defined in terms of when returns exceeded the cost of capital, was 70% to 90%. Although this extraordinary performance was due to many factors close interactions between marketing and 7,500 R&D personnel worldwide was critical. To facilitate interaction, problems and solution are posted on an internal Web site and â€œcommunities of practiceâ€ dedicated to particular expertise (e.g. â€œwhitenersâ€) meet frequently. Joint collaboration between different units of P&G has produced such diverse products as Crest White-strips teeth whiteners, lams Dental Defense tartar-fighting pet food, and Olay Daily facials cleansing cloths. Mr. Clean Auto Dry carwash system was designed with input from R&D experts who worked on the water purification and Cascade automatic dishwasher powder brands.