Two recent Journal of Marketing articles provide new insights into marketing and societal issues
From consumers to investors to employees, a recent survey reports that every stakeholder group expects businesses to help find solutions to issues including economic inequality, gender bias, and climate change. With these expectations only growing, there may be a need to develop new measures in marketing to investigate questions at the intersection of marketing and society. Using such measures has the potential to inform policymakers, which may ultimately improve outcomes on some of the most critical issues facing society today. Two recent Journal of Marketing articles provide nuance to previously used measures to consider marketing’s impact on societal outcomes.
The Positive Influence of Female Executives in the C-Suite
Despite significant strides during the 20th century, gender equality remains a pressing societal issue. In business, women continue to face inequality leading most notably to lower pay, with even starker consequences for women of color. However, recent findings suggest that women in top management reap not only personal benefits but also financial performance benefits for their firms. The Journal of Marketing article, “Customer Orientation and Financial Performance: Women in Top Management Teams Matter” by Chandra Srivastava, Saim Kashmiri, and Vijay Mahajan, shows that women executives influence the financial performance of firms by centering and focusing on customers.
The authors introduce female influence in the top management team (FITMT) as a measure of female executives’ leverage on decision making within the entire management team (TMT). FITMT differs from traditional demographic standards that focus on female representation in the TMT, thus allowing the authors to tease out these important findings. As Srivastava notes, “By expanding access to leadership among women, we get better marketing for the firm, and we get a more equal society.”
Rethinking Financial Vulnerability
The Journal of Marketing article “Beyond Income: Dynamic Consumer Financial Vulnerability” by Linda Court Salisbury, Gergana Y. Nenkov, Simon J. Blanchard, Ronald Paul Hill, Alexander L. Brown, and Kelly D. Martin addresses another critical societal issue: consumer financial vulnerability (CFV). The authors suggest that addressing CFV requires broadening CFV to account for individuals’ risk of experiencing harm, not just those currently experiencing harm. Given the current measures of CFV, Salisbury provides a powerful example explaining why we typically underestimate the number of vulnerable people in the marketplace: “An uninsured person may delay medical treatment, preventive treatment because they can’t afford it. That could lead to a medical crisis, which then could lead to short-term disability and loss of work. It becomes a kind of domino effect of harm. So, we wanted to try to make it clear that vulnerability is a risk of harm…You don’t have to be experiencing harm to still be vulnerable to it.” The researchers also show that by analyzing customer financial data, marketers can help to offset consumer financial vulnerability.
In addition to the managerial insights and policy implications, these articles shed light on the need for new tools and measures to address issues at the intersection of marketing and society appropriately. Referring to FITMT, Srivastava explains that companies “can look at it and say, ‘Well, we have an equal number of women to men, but the women don’t hold any of the top leadership positions. They’re all at the lower ranks.’ And so, this would enable them to really see how much influence they’re giving diverse bodies outside of what’s the norm.” Discussing the logic behind expanding CFV, Salisbury adds that “in other domains, firms might start to think of considering measurement, which would allow us to identify the risk of certain types of harms that consumers might experience, rather than waiting for the harms to occur. I think that could really benefit, both consumers and firms alike.”
Stakeholders increasingly expect firms to address societal issues. Thus, as marketing academics and practitioners consider marketing’s impact on societal outcomes, new ways of measuring this impact may become necessary. While the stakes are high, given the challenges of the moment, the rewards could mean a more equitable and just society for all.
Advice for Firms Addressing Societal Issues
- Growth and profit maximization prioritizes one group of stakeholders, owners/investors, often at the expense of other stakeholders. Firms should prioritize the needs of all their stakeholders (e.g., employees, customers, communities), focusing on long and longer-term performance.
- Firms should recognize that some of the measures that have been used in the past may be insufficient to analyze and assess the issues of the moment.
- Financial performance measures are no longer enough. Firms should begin measuring their social impact as well.
- Figuring out the best metrics may require investing time, financial, and personnel resources.
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