Competing Perspectives in International Marketing Strategy: Contingency and Process Models

Empirical studies investigating the relationship between marketing standardization and performance have generated mixed results. This study investigates the causal ordering between marketing strategy and marketing structure as determinants of subsidiary performance. The authors propose a multiple contingencies approach that tests both the contingency (e.g., Chandler 1962) and the process (e.g., Bower 1970) frameworks in the subsidiary context. Findings based on a two-phase longitudinal study provide initial support for the framework that suggests that marketing structure follows marketing strategy. In response to increased target market similarity, companies in the study opted for more standardized marketing strategies. Furthermore, centralization of structure mediated the relationship between marketing strategy and subsidiary performance. The performance impact of centralization, however, was cross-lagged and negative. Results suggest adapting marketing strategies to local markets as a way of enhancing performance.