Cultural differences and postmerger problems: Misconceptions and cognitive simplifications.

Researchers and practitioners have increasingly explained post-merger organizational problems with cultural differences, especially in the context of cross-border mergers and acquisitions. It is suggested here that cultural differences have great explanatory power in the context of post-merger change processes. There are, however, problems with a number of superficial cultural conceptions that are common in research in this area and in managerial rhetoric. This critical article provocatively delineates misconceptions widely held by researchers and practitioners in this field, which not only disregard cultural differentiation, fragmentation, inconsistencies and ambiguities, but further, illustrate a lack of understanding of cultural permeability and embeddedness in the environment, an overemphasis on abstract values and lack of attention to organizational practices, an overemphasis on initial structural differences and lack of attention to the new cultural layer, a lack of recognition of the political dimensions and a failure to recognize cultural differences as sources of value and learning. In this article, the theoretical problems associated with these misconceptions are examined and new conceptual perspectives suggested. The risks at stake for decision makers are also discussed.

Does relationship marketing improve customer relationship satisfaction and loyalty?

Purpose - This study investigates the relationship marketing (RM) strategy of a retail bank and examines whether - after its implementation - customer relationships were strengthened through perceived improvements in the banking relationship and consequent loyalty towards the bank. Design/methodology/approach - A survey was conducted on two profitability segments, of which the more profitable segment had been directly exposed to a customer oriented RM strategy, whereas the less profitable segment had been subjected to more sales oriented marketing communications. Findings - No significant differences were found between the segments on customers’ evaluations of the service relationship or their loyalty toward the bank. Furthermore regression analysis revealed that relationship satisfaction was less important as a determinant of loyalty in the more profitable segment. Research limitations/implications - This study was conducted as a case study of one specific branch of a bank group in Finland, which limits the external validity of its results. It was not possible to ascertain if, or to what extent, customers of the more profitable segment had received the intended RM treatment. Other limitations are also discussed. Practical implications - Customer orientation is desirable within retail banking and more studies are needed on the differential drivers of loyalty across customer profitability segments. By identifying the aspects of a banking relationship that are more highly valued among more profitable customers than among less profitable customers, bank managers would be able to more effectively devise appropriate strategies for different segments. Originality/value - The study contributes to the RM literature and marketing of financial services by providing empirical evidence of the effects of RM activities on customer relationship perceptions in different profitability segments.

Organizing (with) Thirdness. A Dialogic Understanding of Bicultural Interactions in Organizations

This conceptual paper examines bicultural interactions in organizations as they are experienced by the involved individuals. Notions from Bakhtinian dialogism are used in order to conceptualize the sensemaking opportunities provided by the encounter with a cultural otherness. It is argued that in such bicultural situations, because of the lack of intimate understanding of the other culture, the third element in the dialogic relation - ‘thirdness’, i.e. the relation itself, without which there would be no sensemaking potential - may be lacking as a result of the distorting combination of projected similarity and stereotyping, added to certain counterproductive organizational dynamics. Therefore, it is suggested that, to make the bicultural work interaction the rewarding relation it could be, thirdness should be coordinated by management in a way that can transcend the spontaneous negative dynamics of the confrontational situation. If management was to fail to organize (with) thirdness appropriately, bringing in a third party could be a possible alternative in order to initiate the necessary mutual understanding that should eventually lead to a fruitful work interaction.

The Impact of Cultural Factors on Post-Acquisition Integration: Domestic and Foreign Acquisitions of Finnish Companies in 1993-2004

Acquisitions are a central component of corporate strategy. They contribute to competitive advantage by offering possibilities for both cost reductions and for revenue enhancements. However, many acquisition benefits cannot be realized without a successful integration of the acquiring and the acquired firms. Previous research shows that national and organizational culture can play a major role in determining the integration outcomes. Therefore, the overall aim of the thesis is to map out and illustrate the impact mechanisms of cultural factors in post-acquisition integration in order to explain the cultural aspects of acquisitions. This study has three main contributions. First, the study shows that international and domestic acquisitions differ concerning both strategic and cultural fit. Second, the findings highlight the importance of acculturation and cultural integration in determining post-acquisition outcomes. Finally, the study uncovers several impact mechanisms that shed light to the contradictory results related to cultural differences in previous research.

The Impact of Readily Detected- and Underlying Attributes on Social Integration in Cross-Cultural Settings

The benefits and drawbacks of homogeneity and heterogeneity have been debated at length. Whereas some researchers assert that heterogeneity is beneficial for groups that are engaged in complex problem solving, the other researchers emphasize the potential costs associated with diversity. The inconsistency is a result of the incomplete measurement of diversity and focus one or two types of diversity. Most research concentrates on the readily detected/visible characteristics, making the assumption that such characteristics are related to underlying attributes (e.g., attitudes and values). In many cases, the demographic characteristics do not covary perfectly with the psychological attributes. Thus both types of attributes need to be utilized to fully understand the impact of diversity. The present research with four essays takes into account both types of attributes and tests their impact on social integration in cross-cultural settings. The results indicate that: (1) readily detectable- and underlying attributes are not related; (2) diversity has overall a negative impact on social integration; (3) socio-cultural context potentially influences the salience of diversity; and (4) diversity and social integration influences the formation of social cognition in form of transactive memory directories. The limits of research and managerial implications are discussed.

The Nature of Learning about Customers in a Customer Service Setting - A Study of Frontline Contact Persons

The starting point of this thesis is the notion that in order for organisations to understand what customers value and how customers experience service, they need to learn about customers. The first and perhaps most important link in an organisation-wide learning process directed at customers is the frontline contact person. Service- and sales organisations can only learn about customers if the individual frontline contact persons learn about customers. Even though it is commonly recognised that learning about customers is the basis for an organisation’s success, few contributions within marketing investigate the fundamental nature of the phenomenon as it occurs in everyday customer service. Thus, what learning about customers is and how it takes place in a customer-service setting is an issue that is neglected in marketing research. In order to explore these questions, this thesis presents a socio-cultural approach to understanding learning about customers. Hence, instead of considering learning equal to cognitive processes in the mind of the frontline contact person or learning as equal to organisational information processing, the interactive, communication-based, socio-cultural aspect of learning about customers is brought to the fore. Consequently, the theoretical basis of the study can be found both in socio-cultural and practice-oriented lines of reasoning, as well as in the fields of service- and relationship marketing. As it is argued that learning about customers is an integrated part of everyday practices, it is also clear that it should be studied in a naturalistic and holistic way as it occurs in a customer-service setting. This calls for an ethnographic research approach, which involves direct, first-hand experience of the research setting during an extended period of time. Hence, the empirical study employs participant observations, informal discussions and interviews among car salespersons and service advisors at a car retailing company. Finally, as a synthesis of theoretically and empirically gained understanding, a set of concepts are developed and they are integrated into a socio-cultural model of learning about customers.

A Relationship Mediated Theory of Internal Marketing (summary section only)

This report presents a new theory of internal marketing. The thesis has developed as a case study in retrospective action research. This began with the personal involvement of the author in an action research project for customer service improvement at a large Australian retail bank. In other words, much of the theory generating ‘research’ took place after the original project ‘action’ had wound down. The key theoretical proposition is that internal marketing is a relationship development strategy for the purpose of knowledge renewal. In the banking case, exchanges of value between employee participants emerged as the basis for relationship development, with synergistic benefits for customers, employees and the bank. Relationship development turned out to be the mediating variable between the learning activity of employee participants at the project level and success in knowledge renewal at the organisational level. Relationship development was also a pivotal factor in the motivation and customer consciousness of employees. The conclusion reached is that the strength of relationship-mediated internal marketing is in combining a market focused commitment and employee freedom in project work to achieve knowledge renewal. The forgotten truth is that organisational knowledge can be renewed through dialogue and learning, through being trustworthy, and by gaining the trust of employees in return.

Multidimensionality of Actors in Business Networks: The Influence of Social Action in Pharmacy Networks in Finland

In the markets-as-networks approach business networks are conceived as dynamic actor structures, giving focus to exchange relationships and actors’ capabilities to control and co-ordinate activities and resources. Researchers have shared an understanding that actors’ actions are crucial for the development of business networks and for network dynamics. However, researchers have mainly studied firms as business actors and excluded individuals, although both firms and individuals can be seen as business actors. This focus on firms as business actors has resulted in a paucity of research on human action and the exchange of intangible resources in business networks, e.g. social exchange between individuals in social networks. Consequently, the current conception of business networks fails to appreciate the richness of business actors, the human character of business action and the import of social action in business networks. The central assumption in this study is that business actors are multidimensional and that their specific constitution in any given situation is determined by human interaction in social networks. Multidimensionality is presented as a concept for exploring how business actors act in different situations and how actors simultaneously manage multiple identities: individual, organisational, professional, business and network identities. The study presents a model that describes the multidimensionality of actors in business networks and conceptualises the connection between social exchange and human action in business networks. Empirically the study explores the change that has taken place in pharmaceutical retailing in Finland during recent years. The phenomenon of emerging pharmacy networks is highly contemporary in the Nordic countries, where the traditional license-based pharmacy business is changing. The study analyses the development of two Finnish pharmacy chains, one integrated and one voluntary chain, and the network structures and dynamics in them. Social Network Analysis is applied to explore the social structures within the pharmacy networks. The study shows that emerging pharmacy networks are multifaceted phenomena where political, economic, social, cultural, and historical elements together contribute to the observed changes. Individuals have always been strongly present in the pharmacy business and the development of pharmacy networks provides an interesting example of human actors’ influence in the development of business networks. The dynamics or forces driving the network development can be linked to actors’ own economic and social motives for developing the business. The study highlights the central role of individuals and social networks in the development of the two studied pharmacy networks. The relation between individuals and social networks is reciprocal. The social context of every individual enables multidimensional business actors. The mix of various identities, both individual and collective identities, is an important part of network dynamics. Social networks in pharmacy networks create a platform for exchange and social action, and social networks enable and support business network development.

Sensemaking in the Third Space - Essays on French-Finnish Bicultural Experiences in Organizations and Their Narratives (summary section only)

Research on cross-cultural and intercultural aspects in organizations has been traditionally conducted from an objectivist, functionalist perspective, with culture treated as an independent variable, and often the key explanatory factor. In order to do justice to the ontological relativity of the phenomena studied, more subjectivist research on intercultural interactions, and especially on their relationships with the dynamics of cultural identity construction, is needed. The present research seeks to address this gap by focusing on bicultural interactions in organizations, as they are experienced by the involved individuals. It is argued that such bicultural situations see the emergence of a space of hybridity, which is here called a ‘third space’, and which can be understood as providing ‘occasions for sensemaking’: it is this individual sensemaking that is of particular interest in the empirical narrative study. A first overall aim of the study is to reach an understanding of the dynamics of bicultural interactions in organizations; an understanding not only of the potential for learning and emancipatory sensemaking, but also of the possibility of conflict and alienatory ordering (this is mainly addressed in the theoretical essays 1 and 2). Further, a second overall aim of the study is to analyze the reflexive identity construction of four young French expatriates involved in such bicultural interactions in organizations in Finland, in order to examine the extent to which their expatriation experiences have allowed for an emancipatory opportunity in their cases (in essays 3 and 4). The primary theoretical contribution in this study lies in its new articulation of the dynamics of bicultural interactions in organizations. The ways in which the empirical material is analyzed bring about methodological contributions: since the expatriates’ accounts are bound to be some kind of construction, the analysis is made from angles that point to how the self-narratives construct reality. There are two such angles here: a ‘performative’ one and a ‘spatial’ one. The most important empirical contributions lie in the analysis of, on the one hand, the alternative uses that the young expatriates made of the notion of ‘national culture’ in their self-narratives, and, on the other hand, their ‘narrative practices of the third space’: their politics of escape or stabilization, their exploration of space or search for place, their emancipation from their origin or return to home as only horizon.

Interpretation of Services Marketing Concepts

Scholarly research has produced conceptual knowledge that is based on real-life marketing phenomena. An initial aim of past research has been to produce marketing knowledge as a base for efficient business operation and for the improvement of productivity. Thus, an assumption has been that the knowledge would be applied by organisations. This study focuses on understanding the use of marketing knowledge within the field of service marketing. Hence, even if marketing knowledge about service-oriented principles and marketing of services is based on empirical research, there is a lack of knowledge on how this marketing knowledge is in fact applied by businesses. The study focuses on four essential concepts of services marketing knowledge, namely service quality, servicescape, internal marketing, and augmented service offering. The research involves four case companies. Data is based on in depth interviews and questionnaire-based surveys conducted with managers, employees, and customers of these companies. All organisations were currently developing in a service-oriented and customer-oriented direction. However, we found limitations, gaps, and barriers for the implementation of service-oriented and customer-oriented principles. Hence, we argue that the organisations involved in the study exploited conceptual knowledge symbolically and conceptually, but the instrumental use of knowledge was limited. Due to the shortcomings found, we also argue that the implementation of the various practices and processes that are related to becoming service-oriented and customer-oriented has not been fully successful. Further, we have come to the conclusion that the shortcomings detected were at least in some respect related to the fact that the understanding and utilisation of conceptual knowledge of service-oriented principles and marketing of services were somewhat limited.

Silent Communication - A Challenge to Established Marketing Communication Practice

Purpose The paper examines the concept of silent communication and its implications in marketing communication. It defines silent communication and proposes an analytic framework enabling an expanded view of marketing communication. Design/methodology/approach By explicitly adopting a customer-oriented perspective, combined with insights from service marketing and relationship communication, the paper extends current models of marketing communication. Findings The paper identifies different types of silent communication and presents new perspectives on marketing communication. The authors outline a framework for understanding how the company can/cannot control different forms of marketing communication and discuss the implications of this. Research implications/limitations The paper concentrates on a conceptual analysis, offering a number of empirical illustrations. The conceptual development creates new research issues that should lead to a deeper understanding of customers’ meaning creation, actions and reactions. Practical implications Silent communication constitutes a managerial challenge as it is often invisible to the management. The paper points to the need to develop methods to reveal the effects of silent communication as well as create guidelines for managerially handling silent communication. Originality/value The customer-based perspective and the focus on silent communication provide a completely new approach to analysing and understanding marketing communication. The paper contributes to service marketing and marketing communication research by introducing conceptualisations of silent communication that have an interest for both academic research and practitioners.

Exploring Marketing in Micro Firms

Purpose - The purpose of the paper is to explore the practice of marketing in micro firms. Which are the challenges micro firms encounter and how do they handle them? Methodology - The research methodology is based on the theory-in-use approach (Zaltman, Heffring & LeMasters 1982) in order to inductively explore the practice of marketing in micro firms. The empirical findings rest on ten case studies, where data has been generated through repeated interactions with each case. Findings - The empirical findings show that micro firms handle their marketing challenges in a distinctive manner, by creatively using available resources and network relations. Marketing in micro firms is largely about a long-term, gradual development of a position on the market. This process we label germinal marketing. Two key dimensions of germinal marketing were identified: “earning your position” and “being your brand”. Research limitations and implications - The findings rest on an explorative study consisting of ten cases and the general applicability of the results need to be validated by further studies. These cases are however sufficient to illuminate the need for further research into the area. Value of the paper - The value of the paper is twofold. First, it expands the theory-in-use approach, and presents a research method for successful inductive empirical studies of small firm phenomena. Secondly, the paper widens our understanding of the marketing reality and practice of micro firms, identifying new dimensions of marketing and revealing the strategic implications of ordinary business activities.

What Can A Service Logic Offer Marketing Theory

The goods-dominated marketing model has major shortcomings as a guiding marketing theory. Its marketing mix approach is mainly geared towards buying and does not include consumption as an integral part of marketing theory. Although it is during the process of consuming goods and services that value is generated for customers and the foundation for repeat purchasing and customer relationships are laid, this process is left outside the scope of marketing. The focus in service marketing is not on a product but on interactions in service encounters. Consumption has become an integral part of a holistic marketing model. Other than standardized goods-based value propositions can be better understood when taking a servicebased approach. It is concluded that marketing based on a goods logic is but a special case of marketing based on a service logic and applicable only in certain contexts with standardized products.