Full Length ArticleDeveloping firms' growth approaches as a multidimensional decision to enhance key stakeholders' wellbeing☆
Introduction
“While technology is important, it's what we do with it that truly matters.”
– Muhammad Yunus
These words hold more importance today than ever before. There are three trends that every firm faces in a dynamically - evolving business environment. First, in a world where technology and omnipresent technology-based solutions are rapidly changing the reality that we live in, there is a growing emphasis on maximizing the benefits of technology adoption (e.g., convenience, reduced costs, and enhanced experience). Second, firms are grappling with the resultant influx of big data about their internal equipment, processes, and interactions with supply chain partners, employees, customers, etc., driving them to develop more advanced analytical methods that aid decision-making. Third, stakeholders such as supply chain partners, employees, customers, and communities have access to various platforms to make their voices heard, leading firms to recognize their importance, their needs and expectations, and potential conflicts in their interests. The current trends that can influence a firm's growth approach – the increasing adoption of technology, the growth of big data and analytics, and the increased importance of stakeholders – are discussed next.
While technology such as internet and mobile solutions, scanner panels, etc. have been around for several years, the focus has been shifting toward the use of more advanced technologies of this age, that we refer to as “new-age technologies” in this study. Technologies such as the internet of things (IoT), artificial intelligence (AI) and machine learning (ML), blockchain (BC), robotics, and drones are becoming ubiquitous and promise to usher in a new age of technology-enabled reality. These technologies are predicted to be essential to firms across industries over the next three to five years (PwC, 2020), and are referred to as “focal new-age technologies” in this study. While they have gained attention, their full potential is yet to be understood and achieved. These technologies can disrupt, reimagine, and reinvent industries, while transforming consumer reality (Daugherty & Carrel-Billiard, 2019).
The adoption of these new-age technologies is resulting in economic benefits for firms (PwC, 2019), and engaging experiences for consumers. For instance, firms are using IoT, AI, and ML to conduct predictive maintenance and reduce downtime, using robotics to automate processes (resulting in cost benefits for firms), and using IoT, AI, and ML to offer personalized promotions and help in-store navigation (resulting in convenient and personalized customer experiences). These technologies can help firms meet consumer demands, support employees, redesign business processes, and identify growth opportunities (Daugherty & Carrel-Billiard, 2019).
The increased use of technology, especially new-age technologies, has led to a surge of structured and unstructured data from scanner panels, social media, e-commerce, sensors, devices, video/audio, networks, log files, transactional applications, websites, etc. Big data is typically characterized by volume, velocity, variety, and veracity, and value (e.g., Wedel & Kannan, 2016). Traditional statistical and econometric models fall short in handling big data, leading to a growing number and variety of relevant marketing analytics to support marketing decision-making (Wedel & Kannan, 2016). Marketing analytics are gaining prominence among academicians as well as practitioners, as is evident in the increasing research on marketing analytics and their applications (e.g., Nam & Kannan, 2014; Netzer et al., 2019), and the increased analytics investments by firms. The US analytics market alone was valued at USD 957.17 million in 2019 and is predicted to grow by 12.9% from 2020 to 2025 (Intelligence, 2020).
In this study, we use Wedel and Kannan's (2016) definition of marketing analytics – “the methods for measuring, analyzing, predicting, and managing marketing performance with the purpose of maximizing effectiveness and return on investment”. Relevant marketing analytics include analytics with regard to CRM, retail, advertising, search, online reviews, GPS and mobile, web, social, online review, sentiment, path to purchase, trends, competitive intelligence, attribution, behavioral profiling and targeting, etc.
Although firms have been focusing on their stakeholders for several decades, efforts have typically been little and fragmented. Very few firms have had the ability or drive to focus on all the key stakeholders proposed in this study: the focal firm, its employees, supply chain, shareholders, customers, communities, and regulatory bodies. Here, we use Freeman's (1984) definition of a stakeholder as “any group or individual who can affect or is affected by the achievement of an organization's objectives”. Firms are expanding their stakeholders' focus with the advancement of new-age technologies and analytics, awareness of key stakeholders' needs, and calls to include key stakeholders (Hillebrand et al., 2015; Webster & Lusch, 2013).
In addition to increasing their breadth, firms are increasing their depth of stakeholders' focus through efforts aimed at enhancing stakeholders' engagement and wellbeing. The growing emphasis on stakeholder engagement (e.g., customer engagement (Kumar et al., 2010; Kumar & Pansari, 2016), and employee engagement (Kumar & Pansari, 2015)) has encouraged firms to leverage new-age technologies and relevant analytics to develop personalized and convenient offerings. Furthermore, firms are making overall wellbeing a strategic priority and realizing their roles in shaping interactions of employees, consumers, governments, etc. (Daugherty & Carrel-Billiard, 2019). In this study, we draw on existing literature (e.g., Burroughs & Rindfleisch, 2012; Mick et al., 2012) to present our definition of wellbeing as “a multidimensional concept that describes a state of health and happiness for each stakeholder across physical, emotional, financial, societal, and environmental aspects, as relevant to the stakeholder”.
Firms are applying new-age technologies and relevant analytics with a focus on key stakeholders' well-being in the form of monetary and non-monetary stakeholder benefits. For instance, the use of AI-powered IoT and workplace analytics to monitor and improve physical working conditions and employee safety, the use of intelligent robotics for manufacturing and warehousing processes to offer human workers upskilling and reskilling opportunities, the use of AI, IoT, and relevant analytics to offer consumer wellbeing applications, wearable devices, and personalized real-time recommendations to enhance convenience and customer engagement.
Industries that are powered by or transformed due to new-age technologies are predicted to grow and achieve success due to the benefits accruing from technology adoption (Hecht, 2018). However, corporate leadership is struggling with the question of how to prioritize, manage, and leverage these emerging technologies to ensure growth (Nanney & Beaudion, 2018)?
The 2020 CMO survey (Moorman et al., 2020), predicts a 56% increase in firms' marketing analytics spending over the next three years, coupled with an increase in the number of firms formally evaluating their marketing analytics. However, the decline in the use of marketing analytics in firm decision-making highlights that firms struggle with integrating data into their marketing and decision-making and operations (Hanssens & Pauwels, 2016). The importance of stakeholder alignment to achieve organic growth in firms has increased (Moorman et al., 2020). However, stakeholders' interests create tension due to differences in their backgrounds, norms, and expectations from firms (e.g., Neville & Menguc, 2006). Firms find it difficult to fully understand and balance these varied and conflicting interests. Stakeholder marketing has been proposed as “a more holistic perspective on markets and markets,” (Hillebrand et al., 2015) but firms still struggle with the implementation of stakeholder marketing.
In this environment, growth continues to be the most important KPI for firms to evaluate their marketing performance (Moorman et al., 2020). As firms increasingly move toward following the three trends mentioned in 1.1 Increasing adoption of technology, 1.2 Growth of big data and relevant analytics, 1.3 Increased importance of stakeholders, they seek guidance with regard to the investment of scarce resources across the aforementioned three primary dimensions. The key question facing firms is: How can we invest scarce resources across the three primary dimensions (new-age technology adoption, relevant analytics adoption, and key stakeholders' focus) and overcome their associated challenges to achieve firms' growth?
These three primary dimensions require different levels of resources. Advancing in all three dimensions is challenging (but not impossible) as firms have scarce resources (e.g., financial, human) that need to be allocated across these dimensions based on the prevailing needs. For instance, the adoption of new-age technology requires extensive resource investments, the adoption and application of relevant analytics requires skilled and knowledgeable analysts, and a broader and deeper stakeholders' focus requires firms to rethink their traditional marketing processes and invest in gaining stakeholders' buy-in and trust. At the same time, they enable firms to develop certain capabilities and realize stakeholders' wellbeing outcomes. This study also explores the influence of two moderators – the influence of training and development initiatives on the development of capabilities by firms, and the influence of the type of market on the realization of stakeholders' wellbeing outcomes. This is because (a) training and development programs need to be aligned with firms' growth approaches to develop associated capabilities, and (b) the realization of stakeholders' wellbeing outcomes can differ between developed and emerging markets. Hence, we examine the following research questions:
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What growth approaches can a firm follow based on its multidimensional decision with regard to new-age technology adoption, relevant analytics adoption, and key stakeholders' focus?
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What are the associated capabilities that each of these growth approaches create for the firm?
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How can these capabilities (resulting from growth approaches) offer outcomes that create and enhance wellbeing of the key stakeholders?
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How do the firm's training and development initiatives influence the development of capabilities as a result of each of the growth approaches?
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How do the wellbeing outcomes offered to key stakeholders as a result of each of the growth approaches vary across emerging vs. developed markets?
Since the 1960s, several growth strategies have been introduced at critical times to guide firms toward growth in the face of prevailing trends. For instance, Boston Consulting Group's growth share matrix was presented in the 1970s as a portfolio management framework to help firms prioritize their different businesses based on their relative market shares and market growth rates (BCG, 1970). In the 1980s, Porter's competitive strategy matrix introduced three generic strategies (based on a firm's choice of competitive advantage and the competitive scope) to help the firm gain a competitive advantage in its industry amidst a proliferation of brands (Porter, 1985). However, in recent times no growth strategy has been presented to address managerial concerns around current trends of technology and data. Over the past decade, some studies have examined the impact of new-age technologies and analytics on consumer connectivity, customer experience, and other marketing outcomes (e.g., Hoffman & Novak, 2018; Kumar et al., 2020), and a few studies have identified various aspects of wellbeing as key focus areas (e.g., Chabowski et al., 2011; Kotler, 2011). However, no comparable studies have investigated the impact of new-age technologies and analytics on firm growth or key stakeholders' wellbeing.
Along the lines of major growth strategies that have been introduced over the years, this study aims to contribute to academia and practitioners by presenting a 4E growth strategy matrix comprising four growth strategies (entrenching, empowering, enterprising, enriching) to meet the current needs of firms and managers. This study aims to revive thinking based on growth strategy in the face of current trends (1.1 Increasing adoption of technology, 1.2 Growth of big data and relevant analytics, 1.3 Increased importance of stakeholders). Therefore, we propose that a firm's multidimensional decision with regard to new-age technology adoption, relevant analytics adoption, and key stakeholders' focus can enable the firm to maximize on any one or all the three dimensions. As we discuss in Section 4, the three primary dimensions can be viewed as being orthogonal in a three-dimensional space, and firms can determine their levels on each dimension leading to four different growth strategies. Thus, the four growth approaches are: (a) entrenching (maximizing on new-age technology adoption), (b) empowering (maximizing on relevant analytics adoption), (c) enterprising (maximizing on key stakeholders' focus), and (d) enriching (ideal “nirvana” state of maximizing on all three primary dimensions), to realize key stakeholders' wellbeing outcomes. Each of the growth strategies will result in the development of certain types of firm capabilities, which will then lead to serving the needs and well-being of the key stakeholders. The enriching growth strategy enables the firm to gain the cumulative and synergistic benefits of all three dimensions to enhance key stakeholders' wellbeing.
The study is structured as follows: We describe our triangulation approach (comprising a review of extant literature, marketplace evidence, and managerial interviews) and the resulting insights. Drawing on these insights, we propose an organizing framework that focuses on the different growth approaches available to a firm based on its multidimensional decision with regard to (a) the range of new-age technology adoption, (b) the range of relevant analytics adoption, and (c) the extent of key stakeholders' focus, as well as their associated capabilities and the resulting stakeholders' wellbeing outcomes. We conclude with a brief discussion and identify future research directions.
Section snippets
Triangulation approach
We employ a triangulation approach (Thorpe & Holt, 2007) to better understand the three primary dimensions – new-age technology adoption, relevant analytics adoption, and key stakeholders' focus – from the academic and industry perspectives. By gaining insights from multiple perspectives and sources (extant literature, marketplace evidence, and managerial interviews), the triangulation approach helps in “fixing, positioning, and confining” (Thorpe & Holt, 2007) the proposed organizing
Organizing framework
We propose an organizing framework in Fig. 1, which takes a firm-based view and presents the growth approaches a firm can follow based on the adoption decisions on the three primary dimensions. Each of the proposed growth approaches enables the firm to develop associated capabilities and realize stakeholders' wellbeing outcomes. Three of the four proposed growth approaches – entrenching, empowering, and enterprising – maximize each of the three primary dimensions. They help the firm to develop
Discussion
The proposed organizing framework provides a strategic roadmap for firms, by presenting four growth approaches that a firm can choose to follow (recognizing that it can evolve). A firm that follows an entrenching growth approach can improve its wellbeing by leveraging the interconnectivity of its devices/departments, while a firm that follows an empowering growth approach can improve its wellbeing by deriving actionable insights from available data. A firm that follows an enterprising growth
Agenda for future research
Historically, research has emphasized the importance of firms' growth strategies (e.g., Katsikeas et al., 2016). However, firms need to adapt their growth strategies to manage the three key trends – the increasing new-age technology adoption, the growth of big data and analytics, and the increased focus/importance of key stakeholders. We discuss an extensive research agenda that emanates from the four growth strategies based on the focal firm's multidimensional decision along the three primary
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We thank the Editor-in-Chief, Guest editors, and the anonymous reviewers for their valuable feedback during the revision process. We also thank Bharath Rajan, Peter Verhoef, and the audience at the 2019 Winter AMA Educators' Conference, Austin, TX, for their comments and suggestions. We also thank Renu for copyediting this manuscript.
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All authors contributed equally.