Knowledge that Transforms

Reports of firms' behaviors with regard to corporate social responsibility (CSR) are often contrary to their stated standards of social responsibility. This research examines the effects of communication strategies a firm can use to mitigate the impact of these inconsistencies on consumer perceptions of corporate hypocrisy and subsequent beliefs about the firm's social responsibility and attitudes toward the firm. Study 1 indicates that a proactive communication strategy (when the firm's CSR statements precede conflicting observed behavior) leads to higher levels of perceived hypocrisy than a reactive strategy (when the firm's CSR statements follow observed behavior). The inconsistent information in both scenarios increases perceptions of hypocrisy, such that CSR statements can actually be counterproductive. Study 1 also reveals how perceived hypocrisy damages consumers' attitudes toward firms by negatively affecting CSR beliefs and provides evidence for the mediating role of hypocrisy during information processing. Study 2 finds that varying CSR policy statement abstractness acts to reduce the hidden risk of proactive communication strategies and can improve the effectiveness of a reactive strategy. Study 3 reveals that an inoculation communication strategy reduces perceived hypocrisy and minimizes its negative consequences, regardless of whether the CSR strategy is proactive or reactive.

How do people approach marketing in the face of uncertainty, when the product, the market, and the traditional details involved in market research are unknowable ex ante? The authors use protocol analysis to evaluate how 27 expert entrepreneurs approach such a problem compared with 37 managers with little entrepreneurial expertise (all 64 participants are asked to think aloud as they make marketing decisions in exactly the same unpredictable situation). The hypotheses are drawn from literature in cognitive science on (1) expertise in general and (2) entrepreneurial expertise in particular. The results show significant differences in heuristics used by the two groups. While those without entrepreneurial expertise rely primarily on predictive techniques, expert entrepreneurs tend to invert these. In particular, they use an effectual or nonpredictive logic to tackle uncertain market elements and to coconstruct novel markets with committed stakeholders.

Radical innovation is an important driver of the growth, success, and wealth of firms and nations. Because of its importance, authors across various disciplines have proposed many theories about the drivers of such innovation, including government policy and labor, capital, and culture at the national level. The authors contrast these theories with one based on the corporate culture of the firm. They test their theory using survey and archival data from 759 firms across 17 major economies of the world. The results suggest the following: First, among the factors studied, corporate culture is the strongest driver of radical innovation across nations; culture consists of three attitudes and three practices. Second, the commercialization of radical innovations translates into a firm's financial performance; it is a stronger predictor of financial performance than other popular measures, such as patents. The authors discuss the implications of these findings for research and practice.

Abstract What drives mergers and acquisitions (M&As) in different institutional environments? This article builds on the resource dependence perspective and argues that networks, learning, and institutions represent three building blocks that can enhance our understanding of the drivers behind M&As. Specifically, we consider firms as learning actors embedded in network relations and influenced by institutional development, and compare and contrast firms' acquisition activities across the United States and China. Our findings show that there are indeed important learning and network factors that lead to M&As. More interestingly, the impact of such learning and network factors varies sharply across countries with different market‐based institutions. Copyright © 2009 John Wiley & Sons, Ltd.

Abstract A considerable body of research utilizes large alliance databases (e.g., SDC, MERIT‐CATI, CORE, RECAP, and BIOSCAN) to study interorganizational relationships. Understanding the strengths and limitations of these databases is crucial for informing database selection and research design. In this study I conduct an analysis of five prominent alliance databases. Focusing on technology alliances (those formed for the purposes of joint research or cross‐technology transfer), I examine the databases' consistency of coverage and completeness, and assess whether different databases yield the same patterns in sectoral composition, temporal trends, and geographic patterns in alliance activity. I also replicate three previously published alliance studies to assess the impact of data limitations on research outcomes. The results suggest that the databases only report a fraction of formally announced alliances, which could have detrimental consequences for some types of research. However, the databases exhibit strong symmetries in patterns of sectoral composition, alliance activity over time, and geographic participation. Furthermore, the replications of previous studies yielded results that were highly similar to those obtained in the original studies. This study thus provides some reassurance that even though the databases only capture a sample of alliance activity, they may yield reliable results for many—if not all—research purposes. This information should help researchers make better‐informed decisions about their choice of database and research design. Copyright © 2008 John Wiley & Sons, Ltd.

Although highly relevant for marketing practice, few studies provide conceptual and empirical insights into customer portfolio management. Furthermore, most approaches to analyzing customer portfolios are static. This article discusses three neglected key issues relevant for a dynamic customer portfolio analysis: (1) Does a static versus a dynamic valuation lead to a different prioritization of customer segments in a portfolio? (2) How does offensive or defensive management of segment dynamics affect portfolio value? and (3) Do reliable predictors for dynamics of a customer's position in the portfolio exist? As a tool for customer portfolio analysis, the authors develop a segment-based customer-lifetime-value model. They capture customer dynamics by analyzing how customers switch between segments of different values across time. The authors apply their tool with longitudinal data from four firms with up to 300,000 customers. The results from the empirical analysis and a simulation study provide answers to the three key issues raised. First, compared with a dynamic analysis, a static approach overestimates the value of some customer segments but underestimates others. Second, a defensive versus offensive management of value dynamics is relatively more appropriate for middle-tier segments, whereas the opposite holds true for bottom-tier segments. Third, general customer characteristics and aggregated transaction characteristics indicate future segment dynamics, whereas specific product usage data differentiate customers according to current value.

Using social practice theory, this article reveals the process of collective value creation within brand communities. Moving beyond a single case study, the authors examine previously published research in conjunction with data collected in nine brand communities comprising a variety of product categories, and they identify a common set of value-creating practices. Practices have an “anatomy” consisting of (1) general procedural understandings and rules (explicit, discursive knowledge); (2) skills, abilities, and culturally appropriate consumption projects (tacit, embedded knowledge or how-to); and (3) emotional commitments expressed through actions and representations. The authors find that there are 12 common practices across brand communities, organized by four thematic aggregates, through which consumers realize value beyond that which the firm creates or anticipates. They also find that practices have a physiology, interact with one another, function like apprenticeships, endow participants with cultural capital, produce a repertoire for insider sharing, generate consumption opportunities, evince brand community vitality, and create value. Theoretical and managerial implications are offered with specific suggestions for building and nurturing brand community and enhancing collaborative value creation between and among consumers and firms.

This article describes an investigation of the American Girl brand that provides a more complete and holistic understanding of sociocultural branding. Recent research on emotional branding, together with prior work on brands’ symbolic nature and their role as relationship partners, represents a significant shift in the way marketers think about brands and brand management. However, a full understanding of powerful and emotionally resonant brands has been elusive, in part because sociocultural branding knowledge has accumulated in a piecemeal way and lacks coherence and integrity. In addition, powerful brands are extraordinarily complex and multifaceted, but in general they have been studied from a single perspective in a single setting. On the basis of a qualitative exploration of the American Girl brand that is both deep and broad, the authors posit that an emotionally powerful brand is best understood as the product of a complex system, or gestalt, whose component parts are in continuous interplay and together constitute a whole greater than their sum. Studying American Girl from the perspectives of various stakeholder groups in many of the venues in which the brand is manifest, the authors attempt to close the sociocultural branding research loop and identify implications for brand management.

The firm–customer exchange process consists of three key parts: (1) firm-initiated marketing communications, (2) customer buying behavior, and (3) customer product return behavior. To date, the literature in marketing has largely focused on how marketing communications affect customer buying behavior and, to some extent, how past buying behavior affects a firm's decisions to initiate future marketing communications. However, the literature on product returns is sparse, especially in relation to analyzing individual customer product return behavior. Although the magnitude of the value of product returns is known to be high ($100 billion per year), how it affects customer buying behavior is not known because of a lack of data availability and understanding of the role of product returns in the firm–customer exchange process. Given that product returns are considered a hassle for a firm's supply chain management and a drain on overall profitability, it is important to study product return behavior. Thus, the authors empirically demonstrate the role of product returns in the exchange process by determining the exchange process factors that help explain product return behavior and the consequences of product returns on future customer and firm behavior. In addition, the authors demonstrate that product returns are inevitable but by no means evil.

Despite the growing need, nonprofit organization marketers have not yet fully delineated the most effective ways to position charitable appeals. Across five experiments, the authors test the prediction that other-benefit (self-benefit) appeals generate more favorable donation support than self-benefit (other-benefit) appeals in situations that heighten (versus minimize) public self-image concerns. Public accountability, a manipulation of public self-awareness, and individual differences in public self-consciousness all moderate the effect of appeal type on donor support. In particular, self-benefit appeals are more effective when consumers’ responses are private in nature; in contrast, other-benefit appeals are more effective when consumers are publicly accountable for their responses. This effect is moderated by norm salience and is related to a desire to manage impressions by behaving in a manner consistent with normative expectations. The results have important managerial implications, suggesting that rather than simply relying on one type of marketing appeal across situations, marketers should tailor their marketing message to the situation or differentially activate public self-image concerns to match the appeal type.