Most students of management find themselves faced with the question: which management discipline should I specialize in? Marketing, finance, HR or something else? Clearly, the answer to this question depends on which functional area is most crucial to the success of a business organization, or, to put in another way, managers from which functional area are most valuable to any business and, therefore, have the best chance of making it to the top to become business leaders and heads of organizations – Presidents, Managing Directors, CEOs and the like. This article tries to look at the various aspects of this issue, including information on what the latest research seems to indicate. The information provided here may prove useful to both management students as well as practicing professionals.
The main question as to which management function area is currently being considered as most valuable by most companies or is likely to be considered as most valuable in the days to come is the key question that needs to be answered if we are to arrive at any meaningful conclusion regarding which career option to chose among the various management disciplines.
Interestingly, one of the ways to find an answer to this question is to reframe it a little and ask: in the current and emerging business environment, which management functional area holds the key to a company’s success? It is possible there is some functional area which is so vital that it is THE functional area that is the key to all businesses now, in the past and will be in the future. To know whether this is so, we have to start by looking back a little – not much, we need not start looking at corporate history say from the beginning of the century, but perhaps, just two or three decades back to get a proper perspective.
In other words, what we are really dealing with is not a career question but a far more fundamental one: what is the perception of owners, entrepreneurs and top managements (who decide on hiring and promotion issues) regarding which kind of management skills, in their view, is critical to the success of their businesses and is there a pattern in the answer to this question?
Researchers specializing in various management disciplines have been asking such questions and seeking answers through interaction with business leaders in a bid to find out the nature of these perceptions and whether there exists any pattern in such perceptions. A reputed academic and researcher from the marketing discipline has recently published the findings of a survey that provides interesting insights.
In a recent paper in the “Irish Journal of Management,”:http://www.iamireland.com/Irishjournalofmanagement.htm Prof John Egan of the Middlesex University Business School has explored this question with special reference to the perceived sidelining of marketing, and in particular Relationship Marketing, within the contemporary organization.
While space does not permit a detailed report on the research findings, let me offer a summarized version here. Based on in-depth interviews with eleven top European marketing practitioners, the research found out the following:
* In the seventies the focus was on marketing. For example, the President of the American Express Bank had told one of the interviewees covered in the research that â€˜if you ever want to make it to senior levels in American Express then you should go into Marketingâ€™. There is evidence to suggest that in the Seventies, not only in the banking and finance sector but in other areas as well the focus was on marketing. At that time the predominant approach was the traditional marketing-mix approach which focused on the 4 or 5 Ps of marketing and people skilled in working out the best marketing-mix usually rose to the top.
* By the end of the eighties, the finance function had pushed the marketers out of center stage and by the the early 1990s, experts and academics from the marketing discipline had begun to lament that â€˜the marketing profession appears to lack influenceâ€™ and the call had gone out to bring marketing back to the center stage by ditching the marketing mix in favor of the relational paradigm.
* As a result, Relationship Marketing (RM) was the hot topic of the marketing discipline in the 1990s. By the end of the last millennium it had almost become synonymous with marketing and as such it was difficult to conceive a marketing problem or issue that did not have the notion of building, maintaining or dissolving relationships at its core.
* Despite the rise of relationship marketing, perceptions did not change much and as marketing entered the last years of the twentieth century its reputation became decidedly tarnished. Many organizations began to marginalize the marketing function and even marketing pioneers such as Proctor & Gamble and Unilever abolished the post of Marketing Director. Companies began to question large expenditure on marketing without a measurable return on investment (ROI) and accountants started looking to reduce costs and increase rates of return. Brand-building exercises with largely immeasurable outcomes were no longer seen as justifiable. Marketing was openly criticized for lack of innovation in the face of hostile markets and for adopting defensive strategies to cope.
* As a symptom of this demise marketers effectively lost control of relational strategy as Relationship Marketing transformed, in many cases, into general-management dominated and -controlled Customer Relationship Management (CRM).
* Today, marketers seem to have lost the battle for board supremacy completely despite the fact that CRM initially proved to be a failure 70-80% of the time forcing managements to fall back on relationship marketing in all its dimensions. Today, despite CRM systems incorporating some of the multi-dimensional aspects of relationship marketing and thereby, regaining the confidence of managements, it is finance which rules the roost.
* The major reason for this decline of marketing as a function, the paper finds, is the perception that marketers take too much risks, that they are too creative and therefore, often unrealistic from a strictly commercial point of view and that they are often unable to show any measurable return on investment from their expensive marketing strategies.
* The study concludes that if marketers have to regain some of their influence it is unlikely to come from further development of the CRM tool. Instead marketers, the research suggests, should fall back on the latest developments in relationship marketing to start showing that there are large measurable returns on investment from an emphasis on marketing as functional discipline.
In conclusion, we need to consider what present trends seem to indicate for the management profession. With businesses increasingly becoming knowledge intensive, a veritable war going on for acquisition and retention of talent and increasing recognition that in the ultimate analysis it is “people” and human resources which hold the key to business success, the focus may shift from the dialectic between marketing and finance to talent management as the single most important determinant of business success.
Who knows in the days to come HR management may once again come to the fore and regain some of the importance it used to enjoy when companies bothered most about good management of industrial relations in their pursuit of success in business.