Marketing in the context of organisational market resilience
Department of Strategy and Value Based Management, Faculty of Management, University of Lodz, Matejki Street 22/26,
90-237 Lodz, Poland
Robert Kozielski; ORCID: 0000-0002-0200-1504
Evaluating contemporary business changes against the backdrop of the concept of turbulent business environment presented by Ansoff in the ’70s allows us to identify a new way of interpreting Ansoff’s description of turbulence as the key characteristic of the business environment. The new business landscape, described by VUCA (volatility, uncertainty, complexity and ambiguity, BANI (brittle, anxious, nonlinear, incomprehensible) or RUPT (rapid, unpredictable, paradoxical, tangled) acronyms, is complex, illegible and intensified by COVID-19 and the war in Ukraine. It results in shortening the lifecycle of the organisation as well as the importance needing to be attributed to an organisation’s predisposition towards remaining resilient in the face of turbulence. The paper is based on primary research and aims to identify the role of marketing in contemporary business environment and future development in the context of the idea of resilient organisations. The identified business challenges are addressed using the described marketing functions – ‘customer advocacy’, ‘business owner’ and ‘professional manager’.
MINIB, 2023, Vol. 47, Issue 1
Published 31 March 2023
Marketing in the context of organisational market resilience
The COVID-19 pandemic, the war in Ukraine and the current economic instability (inflation, credit lending, energy prices, etc.) in Poland as well as the turbulence in European and global markets have all made the volatility and complexity of the business environment in which modern organisations have to operate extremely apparent. These changes have also brought an unprecedented increase in popularity and research interest in the concept of organisational resilience — understood as the ability to survive in difficult, adverse business circumstances. Organisational resilience is fundamentally related to the market conditions of an organisation’s functioning.
The business environment, defined as VUCA, BANI and sometimes as RUPT, has been considered unpredictable and adverse since the 1960s (Emery & Triest, 1965). This is mainly due to its key characteristic — turbulence (volatility and complexity), as defined by Ansoff (1979). In this situation, one in two companies cannot operate on the market for more than 10 years, one in eight for no more than 30 years and only one in 20 can survive for more than half a century (Fesser, 2011). This means that the average lifespan of an organisation has reduced to around 12 years (Echeverria, 2012). Nevertheless, this does not mean that change causes an organisation to fail. The reasons why companies fail are determined by their inability to cope with change and the resulting loss of competitiveness (Adamson & Steckel, 2018). Some point out that this results from so-called ‘strategic myopia’ (Czakon, 2020).
In this context, the challenge is to build the market resilience of an organisation, understood as the ability to survive and grow in a difficult, adverse business environment. Marketing plays an important role in this process. This role is sometimes referred to as the ‘marketing interface’ (CIM, 2000) and can be considered from the perspective of organisational culture, market strategy and operational activities. The new marketing function addresses the challenge of building an organisation’s market resilience at all these levels. As a result, the purpose of this article which is based on a survey conducted in 2022 among graduates and participants in programmes of the Chartered Institute of Marketing is to identify the role of marketing in the face of the challenges of the contemporary business environment in the context of the requirement for organisations to have market resilience.
The Concept of Market Resilience of Organisations
Effective collision of an organisation with the contemporary business environment depends on the ability to apply various methods of strategic agility, flexibility and adaptability (Holbeche, 2015). Although organisational resilience is directly related to the previously established and developed concepts of the learning organisation (Senge, 1990; Garvin, 1993), flexible and adaptive organisation (Reeves & Deimler, 2011), ambidextrous organisation (Zakrzewska-Bielawska, 2017) and long-lived organisation (De Geus, 2002), the idea of resilience has its origins in the realm of psychotherapy and, as such, has sought answers to questions related to the circumstances of individuals functioning in crisis — questions that would be helpful in ascertaining the degree to which the crisis situation determines the development of our psychophysical capacities, as well as methods that can be deployed to address the limitations observed in such development, vis-a-vis the estimated potential (Rak & Patterson, 1996).
In the management sphere, the idea of resilience emerged in the late 20th and early 21st centuries and describes the organisational, dynamic ability to defend or strengthen the market position in the long term despite an unfavourable, unstable market environment and emerging changes in the business environment. It was developed based on analysis of the sources and causes of organisational failures or setbacks and the occurrence of adverse events leading to them (Sheaffer, Richardson, & Rosenblatt, 1998). This view of organisational resilience highlights its multidimensionality and a high degree of interdisciplinarity. It touches upon the ways in which institutions, teams or individuals behave in situations of crisis or uncertainty (Lee, Vargo, & Seville, 2013).
Market resilience, or organisational resilience, is the ability to recover from a periodic slump or failure, but it additionally encompasses the ability to take adaptive action when signals of change emerge (Hamel & Valikangas, 2003). Organisational resilience is the ability to take swift, creative, situationally appropriate, decisive and transformative actions that minimise the impact of adverse events in the market environment on the organisation (Heifetz, Grashow, & Linsky, 2009). Resilient organisations are able to address significant events that may affect (positively and negatively) the business by having systems in place that enable ‘early warning’ about and anticipation of emerging (internally and externally) opportunities and threats, as well as responding effectively to these events using their resources flexibly and efficiently, at the right time and in the right way. Resilience is, in fact, the ability of an organisation to become independent from the disruptive influence of the business environment in the long term by reading and understanding market changes, thus even anticipating them and continuously reconfiguring resources to achieve and maintain a competitive advantage (Kozielski, 2022).
When adopting this approach and understanding of resilient organisations, several key characteristics of resilient organisations can be identified. These include awareness of market situation and vulnerability management, agile and adaptive capabilities, leadership and organisational culture (McManus, 2008; Vargo & Stephenson, 2010), agile planning, operations, practices (Holbeche, 2015), readiness to change, the agility of operating, management through results and continuous improvement, nurturing collaboration, networking and community (Seville, 2016; Burkett, 2017), and others. When analysing an organisation’s resilience in the market dimension, marketing understood as the organisation’s link to the market becomes a key element.
Market Interface — The New role of Marketing
The ability of an organisation to survive and grow is not dependent on any single department, function or area within the organisation. It results from the interdependent and synergistic cooperation of all spheres of the organisation. Nevertheless, the roles of different areas of the organisation vary. One of the key ones is marketing. The marketing role is comprised of the tasks carried out by the marketing staff, and these pertain to the functions of market analysis, identifying market trends, assessing competitors’ activities or defining the main business opportunities and threats. Therefore, the marketing function constitutes a kind of bridge, link or interface between the organisation and its environment (Kozielski, 2022), to which an overarching role is attributed because of the vastness and deep significance of its contribution towards achieving organisational growth and development (Deloitte, 2007). Obviously, the realisation of this function is conditional on defining the correct place and role of marketing in the organisation. This role should be determined by three dimensions — organisational culture, strategy and operational-tactical activity (Webster, 1992, 2005). Taking this three-dimensional perspective, the role of marketing was defined at the level of organisational culture as ‘customer advocate’, strategy as ‘business owner’ and at the operational-tactical level as
‘professional manager’ (Figure 1).
The role of the customer advocate occupies an essential position in the sphere of organisational culture, operating philosophy or so-called ‘organisational awareness’, which should focus on understanding market processes, market sensitivity and, in particular, the customer and creating ‘win-win’ relationships with them. Customer-centricity is a fairly well-known (Fader, 2020) and accepted concept. At the same time, however, building an organisation that understands the market and the customers and fully implements this approach into its business processes is no longer so common. At the strategy level, marketing is defined as a ‘business owner’, creating solutions (based on a business concept and the corresponding applied model whose commercial viability has been demonstrated) that provide the organisation with a competitive advantage now and in the future. Finally, at the operational-tactical level, marketing should be responsible for professionally executing the market activities related to building and delivering value for customers or, more broadly, stakeholders.
Organisational market resilience is determined by implementing the marketing function as a market interface. This manifests itself in its role at the level of organisational culture, market strategy and operational-tactical activities. The specifics of the market situation and conditions of competing influence the need to address them through the indicated areas of marketing activity. Among other objectives, the present research aimed to identify the challenges faced by organisations on the Polish market and the main sources of their future growth, and then to relate these to the requirements placed on marketing in this context.
The survey was carried out in the form of a CAWI among middleand senior-level marketing managers of organisations that are active on the Polish market. The invitation to participate was extended to 300 graduates and participants in the programmes of the Chartered Institute of Marketing, of whom 89 responded positively. The structure of the sample is presented in Tables 1 and 2.
The survey instrument was an interview questionnaire consisting of a total of 23 questions and seven demographic questions. Scalebased closed questions and semi-open questions were dominant in the questionnaire. The survey was carried out in November 2022. Pilot surveys preceded the actual surveys, and the interview process itself did not cause any major problems for the respondents.
Challenges of the Contemporary Business Environment
The market resilience of an organisation is the ability to survive and grow in a difficult, adverse business environment. Effective marketing as a market interface is of key importance for building market resilience. As a result, the starting point of the research was to identify the key challenges faced by organisations operating on the Polish market and then to identify the dominant sources of future organisational growth in the context of the new role of marketing indicated in Figure 1.
The first sphere was addressed through a question in which respondents were asked to answer the following: ‘Please rate, on a scale from 1 (not at all concerned) to 5 (most concerned), the following factors, indicating which factors you believe will most strongly and negatively affect (limit the growth of) your company/brand’s operations.’ As shown in Table 3, the key challenges that hinder or may hinder an organisation’s operation on the Polish market and, thus, affect its ability to survive and grow are related to economic, legal and socio-political conditions, as well as to customer behaviour, competitor activity, the actions of business intermediaries and internal factors.
The respondents perceive the main threats in the sphere of the emerging economic recession, including, in particular, the rising costs of operation. In addition, companies’ operations are negatively affected by the war in Ukraine, declining buyer incomes, falling demand, changes in customer behaviour and the actions of competitors. All of these factors must raise concerns about the future. As a result, according to research, today one in five companies operating in Poland already fears bankruptcy and insolvency (BIG InfoMonitor, 2022). At the same time, there were twice as many cases of insolvency in the whole of 2022 when compared to 2021. Experts’ estimates indicated that over 250,000 companies would go bankrupt in Poland throughout 2022 (Kamiński, 2022). In this context, questions must arise about potential sources of growth and areas for creating market resilience.
Sources of Growth and Market Resilience of Organisations and the Role of Marketing
Organisational resilience requires addressing the identified disadvantages of the business environment by taking proactive measures — actions directed at not only defending the current market position but also achieving and sustaining growth. The empirical material collected made it possible to identify quite a long list of activities that companies operating in Poland are undertaking or plan to undertake. The respondents were asked to select growth areas from the proposed cafeteria, along with the option to indicate others. Among the responses, opportunities to expand the scale of operations by entering new markets, a strong brand, relationships with business and trade partners, the innovativeness of the company and the benefits stemming from the application of new technologies come to the fore (Table 4).
At the other extreme are those activities identified the least frequently by respondents as effective methods of addressing the business challenges identified. This category includes competing with price, exploiting competitors’ weaknesses, verifying the cost structure and reducing cost levels. In contrast to the activities that the highest percentage of organisations plan to undertake, those with the lowest acceptance rates are more operational and short-term in nature, with immediate rather than sustainable results.
In the final stage, the actions planned to be taken were mapped to the previously indicated levels of tasks given to marketing in the context of building market-resilient organisations. It can be stated with some caution that the respondents demonstrated a high degree of maturity and business awareness. This is because their plans are dominated by strategic considerations (including expanding the scale of operations by entering new markets, establishing a strong brand presence and adopting a sound system of managing relationships with business and commercial partners), or emerge from a level of organisational culture that focusses on innovation (Table 4) rather than on rote adherence to previously formulated schemes and designs.
Stating the volatility and complexity of the contemporary business environment qualifies as a truism (Ploszajski, 2005). Nevertheless, it is important to emphasise that the business environment dynamics and complexity are increasing every year and decade. The concept of an organisation’s market resilience-understood as the ability to survive and grow in an adverse business environment-is a response to the conditions in which contemporary businesses operate. The actions taken or planned to be taken as a response to the identified business challenges, as indicated in Table 4, refer to all the roles attributed to marketing as a market interface (described in Figure 1). They touch upon the sphere of organisational culture as well as market strategy and operational activities. However, the ones that come to the fore are those that have a more long-term nature, providing opportunities for growth and offering chances for generating a more sustainable competitive advantage, thereby strengthening the resilience of the organisation.
The degree up to which an organisation is successful in building its market resilience is determined by the extent of effective use of marketing at all the levels describedThis should be done in a synergistic and balanced manner.
Overemphasising one level at the expense of another results in upsetting this balance and limiting the ability to survive and grow. The findings of the surveys confirm that, in practice, marketing managers understand this relationship and plan to undertake activities taking advantage of the role of ‘customer advocate’, ‘business owner’ and ‘professional manager’. A high degree of awareness of customer-centricity that is not translated into strategy or operational activities will produce the same unsatisfactory results as a certain strategic or operational efficiency that does not include taking into account the customer’s interest and point of view.
The market resilience of an organisation should rest on multiple pillars — the willingness to change, the ability to change and the ability to reconfigure resources (Kozielski, 2022). All of these areas, and their integration, require an approach to marketing (and its role) that differs slightly from the traditional one. In examining the suitability of the traditional understanding of the role of marketing in catering to the needs of enterprises seeking to establish the required level of market resilience in themselves, we encounter several difficulties requiring to be redressed; among these are the lack of a clearly defined objective, low effectiveness, customer appropriation, focus on operational issues, poor internal communication and financial illiteracy. This indicates the need to seek a new approach to marketing. It may not even be a new approach, but rather one that is holistic and based on the internal and external integrity of philosophy, strategy and instruments. On the one hand, of course, marketing and its role in the organisation should not be excessively glorified. On the other hand, it cannot be depreciated or underestimated. However, just as it is accepted that the rules of management are changing and the sustainability of competitive advantage is no longer an unquestioned myth (McGrath, 2013), marketing should keep up with the demands placed on it. The roles of marketing identified in this article are a voice in the discussion on the evolution of marketing and the function it should play in building organisations capable of survival and growth.
The research presented in this article was conducted under the directions of the author and funded by the Accredited Study and Exam Center of The Chartered Institute of Marketing (questus).
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Robert Kozielski — PhD, Professor at the University of Lodz — employee of the University of Lodz, Fulbright Foundation scholar, member of the Committee on Organization and Management Sciences of the Polish Academy of Sciences in 2012–2016. He was awarded the prestigious title of Chartered Marketer issued by The Chartered Institute of Marketing in London. He held the position of Director of the Polish-American Management Center at the University of Lodz and Member of the Advisory Board of Minot State University, USA. He has held academic internships, lectures and research programmes at several universities, including University of Maryland (USA), Lund University (Sweden), The University of Edinburgh (Scotland), Middlesex University London (the UK) and University of Kelanyia (Sri Lanka). He is the author of more than 200 books and articles on market activities, published in Poland and abroad. Books published under his editorship include ‘Marketing Indicators’ and ‘The Future of Marketing’. Books published under his editorship include ‘Marketing Indicators’, ‘The Future of Marketing’, ‘Determinants of Organizational Success’, ‘How to Quickly Write a Professional Marketing Plan’, ‘Organizational Market Success’, ‘Understanding the New Business Paradigm in Eastern Europe — Lessons on Building a Successful Small Business’, ‘Mastering Market Analytics: Business Metrics — Practice and Application’ and others.