Market Knowledge Processing in MCSs. A Study of Car Retailers' Acquisition, Exchange, and Use of Market Knowledge

• This study deals with the integration of management control systems and market knowledge processing, which means increasing organizational learning for the purpose of improving products and services. Competitiveness and profitability reasonably should benefit when knowledge processing is appropriately integrated in the firm-s structures and processes. The important concept of market knowledge is not treated very much in either management control literature nor marketing literature. Reports in the management and business literature indicate an increased interest in the role of knowledge in a firm-s competitiveness (e.g. Blackler, 1995; Menon and Varadarajan, 1992; Sinkula, 1994; Spender, 1996). In the resource-based view (Grant, 1991, 1996), a competence-based view of the firm is linked to its environment. This approach is appealing since it enables treatment of market characteristics as well as internal factors within the same framework. Macdonald (1995) criticizes the existing theories- concentration on structure and control, thus neglecting the importance of information stored in the minds of the individual employees and information acquired from outside the organization. Tsoukas (1996) views the firm as a knowledge system, lacking an overseeing -mind-. A number of studies show that market orientation is positively associated with superior performance (e.g. Day and Nedungadi), contradicting the proposition made by core competence theorists that firms should focus on their core competencies independent of the prevailing market conditions (e.g. Prahalad and Hamel, 1994). Day (1994) argues that the most distinctive features of market-driven organizations are their mastery of the market sensing and customer linking capabilities. This study deals with car retailer-s role in acquiring, exchange, and using market knowledge. The retailer plays an important role in establishing and maintaining long-term customer relationships through its direct interaction with customers. There is reason to assume that the retailer is an important bearer of market knowledge. For the acquired knowledge to be of valuable use, it must be processed, stored and retrieved (Hellefloid and Simonin, 1994). 43 in-depth interviews were conducted at retailers and general agents. Audi, BMW, and Saab are represented. The study indicates that market feedback systems are in many cases slow and non-effective regarding treatment of customer views, preferences, and behavior. This view is supported by Kaplan and Norton (1996), who argue that conventional performance measurement systems are commonly considered lag indicators in that performance measurement and market feedback are slow. Accordingly, it does not constitute a satisfactory basis for decision-making . In this study, it is proposed that knowledge processing and feedback systems should be an essential part of a company-s MCS. A number of specific techniques for integrating knowledge processing and MCSs are proposed. For instance, some retailers participate in committees, which have been established for processing market knowledge, that is to establish bidirectional, vertical communication between the retailer, the general agent, and the car manufacturer. The knowledge processing system has the potential to increase the market knowledge absorption capacity of the management control systems substantially.

Nyckelord

knowledge processing

automotive industry

competitiveness

SOCIAL SCIENCES

SAMHÄLLSVETENSKAP

Publikations- och innehållstyp

ref (ämneskategori)

kon (ämneskategori)