Factors that Influence the Presence or Absence of CMOs in Firms
Nath and Mahajan (see the article Chief Marketing Officers: A Study of Their Presence in Firms' Top Management Teams in the January 2008 JM issue) focus attention on an important and unexplored research topic. One measure of the degree of prominence accorded to Marketing within a corporation is whether or not it has a CMO. Arguably, a CMO's presence means more than a place at the corporate decision-making table for Marketing; it is also a tacit acknowledgment by the firm that successful nurturance of customer relationships is critical for its future revenue and profit streams.
This article provides several new insights. The presence or absence of CMOs is influenced by innovation, differentiation, type of branding strategy, diversification, top management's experience in marketing, and whether the CEO is an outsider. I was especially intrigued by their assertion that a firm using the corporate branding approach has a higher likelihood of CMO presence on the top management team.
However, their finding that CMO presence has no tangible impact on firm performance could be driven by the somewhat restrictive set of performance dependent measures available within the COMPUSTAT database. Although this database facilitates computation of finance metrics, such as ROA, ROS, and Tobin's q, it does not offer dollar-metric measures that are closer to the marketing realm, such as customer lifetime value and brand equity. Nevertheless, stewardship of the marketing function often requires CMOs to devote considerable attention to the latter outcomes. Because CMOs are custodians of brand equity, for example, firms with high brand values (e.g., those in InterBrand's list of best global brands) may be more likely to have a CMO than firms with low brand values. I hope such questions will stimulate future study on this very interesting topic. I enthusiastically applaud the authors for initiating this promising line of research inquiry.
I thank JM readers for their contributions to the spirited debate in the blog threads. I again welcome your comments on the research issues raised by Nath and Mahajan in this study. Please take a few moments of your time now to contribute your thoughts.
By Siva K. Balasubramanian, Journal of Marketing Web Site Editor
