There is a terrific article in today's Observer (UK) by Simon Caulkin. He picks up on many of the themes articulated by the Beyond Branding authors concerning the breakdown in effectiveness of overly rational and economic managerial practice and its gradual 'reformation' into more relational, humanist and altruistic forms. I quote:
Everything a firm does, from the way it decides strategy or manages people to its structure and board constitution reflects some management theory. .. In turn, those theories are founded on some fundamental assumption of human nature. And the most fundamental assumption in management is that human beings are members of the race Homo Economicus, rational maximisers of self-interest.
As is often said, one particularly potent manifestation of "Homo Economicus"-based management theory is present day marketing. With a growing emphasis on scientific, data-derived, deductive and segmentation based approaches to predicting consumer behaviour, the success of a lot of marketing depends on people behaving rationally to a given set of firm-created influences - price, function, benefit, convenience and so on.
Simon Caulkin is spot on however when he identifies that:
Homo economicus has been softened a bit round the edges over the years. Since people plainly aren't omniscient, rationality is acknowledged to be bounded rather than complete.... (But) what is perfectly obvious to everyone except economists and management theorists is that homo economicus is a caricature that exists only in the world of theory. Homo Economicus would not tip taxi-drivers he'll never see again, offer expensive Xmas presents to people who may not reciprocate, or indulge in any spontaneous acts that brighten every day...The truth is that in real people, self-interest co-exists with other more generous behaviours and impulses, such as integrity, trust and altruism.... After all, an organisation based on a single dimension of human complexity (rationalism) is likely to be as much of a travesty as the original assumption. It would be narrow, undersocialised and undernourishing to the spirit at best, at worst brutal and driven to destruction.
If we examine rational marketing theory and its overriding goal to maximise individual consumption to the benefit of the firm, we can connect Simon's article to the failure of recent relational developments to release marketing theory from its rationalist ball and chain. Despite the fact that over the last decade, there has been widespread awareness and acceptance of how an authentic relational market orientation can create superior customer and brand value, relationship marketing has been described as being “undermined (even lost) by an unreflective and narrow instrumental adoption”. Zuboff and Maxmin in The Support Economy argue that the widespread adoption of relationship marketing is now having a growing, negative impact on customer perception and experience of brands, even though it claims to resolve many of the limitations of transactional, mass marketing. They suggest that despite the valid discovery of the individual in relational marketing thinking and brand values, in practice many organisations use the approach to pursue transaction cost-efficiencies rather than fundamentally reinvent the means to create and deliver customer value. Tim Kitchin, A Beyond Branding author, makes the same point more dramatically, “The offer remains the same; delivery is not improved. What happens instead is that the transaction is wrapped in a layer of humanity, while the corporation struggles to force its corporate or parental behaviour to catch up”.
Such criticisms are grounded by empirical research into contemporary marketing practice. A study by Coviello (2002) and his colleagues for example, found that most marketing within individual firms is characterised by a hybrid approach, partly transactional and partly relationship building. Although Coviello et. al. were able to conceptualise the pluralistic nature of modern marketing, they acknowledge that their research does not explain why marketing managers choose to implement a hybrid or even a predominantly transactional approach. I regard this pluralistic pattern of marketing practice as illuminating in its own right for three reasons. First, it suggests that many marketers are engaged in a sophisticated form of competitive leapfrogging, where the focus is on the incremental, trial and error improvement of 4Ps marketing mix practice rather than the achievement of a fundamental breakthrough in the role and value of marketing and branding itself. Second, it confirms that marketers use the relationship marketing philosophy, language, techniques and managerial practices to pursue tactical, promotion-intensive, selling goals. Third, the findings demonstrate that marketing management has an identity problem, which underlines why the above writers continue to question and critique its content, emphasis, boundaries and even its very essence.
Without doubt, marketing managers are under growing pressure to adapt to the changing values and behaviour of all stakeholders – whether individual customers, consumers, employees, business partners, institutions or people and society in general. As postmodernist authors Firat, Dholakia and Venkatesh suggest, there is a pressing need for them to find new ways to close the growing gap between marketing and branding practice on the one hand and stakeholder relevance, values and value on the other. In short, they can help to address Simon Caulkin's call for managers to co-create what Warren Bennis, quoted by Lynda Gratton in her new book The Democratic Enterprise: Liberating your Business with Freedom, Flexibility and Commitment , calls "delightful organisations". As Simon Caulkin explains:
(These companies) can be something more than strictly economic units, and that's because they are based on a more balanced and realistic view of human nature than the one-eyed assumptions that currently prevail.
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