Dallas Business Consultant Elijah ClarkDallas Business Consultant Elijah Clark

Taxonomy of Leadership Theories

Taxonomy of Leadership Theories

in my next blogs, I have reviewed and evaluated the nature of leadership styles and their theories. My post summarizes findings from research on authentic leadership, leader-member exchange, servant leadership, and situational leadership. Examples of a servant leader and situational leader were integrated as a framework to show how the different theories can be viewed in a real case scenario.

Researchers have discovered that, by serving and supporting organizational members, leaders can create a positive and productive environment (Cubero, 2007; Avolio, Walumbwa, & Weber, 2009; Liden, Wayne, Liao, & Meuser, 2014). Leadership style plays a role in followers’ perceptions of an organization. The leadership style is often more important that the leaders opinion (Cubero, 2007). By satisfying followers through listening to their needs, adapting to their situation, creating a positive exchange, and building trust, leaders and followers together will have the tools needed to create and innovate within the organization (Hassanzadeh, 2014)

The study of leadership spans more than 100 years McCleskey (2014). Leadership has gained attention of researchers worldwide (Northouse, 2013). Leadership style influences followers, and it is an important component of a leader (Cubero, 2007). Leadership research has conceptualized leadership as being an extraordinary ability of certain individuals (McCleskey, 2014). My post will focus on four concepts of leadership: servant, authentic, situation, and leader-manager exchange. The next blog post begins with authentic leadership.

 

 

Mark Zuckerberg and Facebook Leadership

The purpose of this post was to examine the leadership style of Facebook CEO Mark Zuckerberg. Media sources were extracted as resources for uncovering how Mark Zuckerberg’s leadership style has an effect on the company’s success and employee satisfaction. The blog further examines Facebook employees by including interviews with current and former Facebook employees. As a transformational leader, Mark Zuckerberg has learned from his mistakes, takes risks, and has grown his company as a visionary leader. Through determination, self-awareness, and by the help of mentor’s, Mark Zuckerberg has been placed on the top 10 CEOs list and has built the most popular social network in the world.

Uncovering Leadership Styles

Transactional leaders focus on maintaining normal workflow of operations. These types of leaders will use disciplinary powers, awards, and an array of incentives to motivate employees to perform their best. These leaders are focused on satisfying quotas on a day-to-day basis. Transformational leaders tend to go beyond the normal day-to-day and focus mainly on creating a solid team of employees by promoting team building. Transformational leaders motivate their employees through setting goals, implementing incentives, and providing opportunities for personal and professional growth (Northouse, 2013). Mark Zuckerberg embodies the characteristics of a transformational leader. He is known as being a motivator who inspires his staff of employees with a clear vision of the company’s future. He further defines the steps necessary to achieve such goals needed. His ideas are disruptive, and his confidence, courage, and vigor makes him a transformational leader that employees relish following (Duggan, 2014).

Mark Zuckerberg

Mark Zuckerberg was born in 1984, in White Plains, New York. His father was a dentist, his mother was a psychiatrist, and he has three sisters. During his sophomore year at Harvard University, Zuckerberg dropped out of college to focus on a social network that he created called Facebook. The company setup their first offices in 2004, during which Zuckerberg had turned down major offers from corporations interested in buying his project. Zuckerberg later explained that the reason he did not sell his company was that he was not interested in the money, but motivated by his passion to produce an open information flow for people with his social network. With the guidance of Apple Inc.’s founder, Steve Jobs, Zuckerberg put together a management team that focused on building Facebook into a high quality business. Zuckerberg is known to have a goal-oriented mindset and is fully focused on leading his team to produce the best social media platform in the world. Today, Mark Zuckerberg is the youngest billionaire on earth and Chairman/CEO of the world’s most popular website, Facebook (Woolley, 2014).

Facebook Environment

At its headquarters in MenloPark, California, each Friday Facebook holds a question and answer session for its employees and users. This forum is as open discussion where Zuckerberg is known for sharing his personal thoughts on the company’s direction. Interns at Facebook, typically make $67,000 yearly, which is $25,000 more than the average U.S. citizen. On a yearly basis, the company puts together a birthday bash for its employees where everyone is given a present for their birthday that took place in that year. The café at facebook offers employees gourmet meals within a setting designed by a team that built a four-star hotel in New York. The Facebook work environment also includes an on-site doctor, chiropractor, and physical therapist. It includes vending machines stocked with computer accessories where users can swipe their identification card and get items such as a new computer charger, batter pack, or keyboard. Once a year, Facebook rents a local park and allows their entire office staff to play games such as dodgeball, kickball, and soccer. In the Facebook work environment, employee comfort and happiness is paramount. Facebook believes that if its employees are comfortable and happy, then they will be more productive (Smith, 2013).

According to an employee study done by Glassdoor (2014), Mark Zuckerberg is rated as number 10 on a list of top 50 CEO’s to work for. Glassdoor is a website were employees voluntarily go to post ratings and reviews on their employer’s and companies in which they work for. Based on the question, “Do you approve of the way this person is handling the job of leading this company?” Facebook employees approved of Mark Zuckerberg’s leadership on an average of 93% out of 100%. The results were calculated based on the ratings between the months of February 2013 and January 2014.

 Working for Mark Zuckerberg

The interview process at Facebook is designed to select employees that fit the culture of the company. Once hired, the employees must learn fast and complete intensive training courses on coding, and hacking. Employees, are not assigned projects, but are allowed to choose the projects in which they are most interested. This method of leadership gives the employees power, courage, and freedom to choose their action of success. Zuckerberg believes that great people who work with clear direction can produce positive results. He believes that employees should be hired based on their passion and not their skillset. He explains that, “skills can be taught, passion can’t,” (Walter, ).

According to Yishan Wong, a former employee at Facebook, as a boss, Zuckerberg began as being cutthroat, and sometimes awkward. His leadership style eventually matured through the five years while Wong was employed with the company between 2005 and 2010. Wong explained that Zuckerberg expected debate, wasn’t sentimental, and he pushed people beyond what they thought was possible of themselves. Wong further explained that in working for Facebook, you must be self-motivated, confident, emotionally secure, and willing to accept the challenges (Carlson, 2012).

To help with building his leadership style, Zuckerberg sought-out mentors, who eventually helped him create a clear vision for his company (Samson, 2013). Andrew Bosworth, a current software engineer at facebook, described Zuckerberg’s leadership as fearless, tireless, and challenging, but with good reason. The results of his leadership, expose unthinkable talent within the employees (Bosworth, 2010). As described in Belscher (2012), Zuckerberg’s leadership style can be considered demanding, aggressive, and encouraging to employees.

Conclusion

Zuckerberg’s transformational leadership style continues to move Facebook to a promising future. He has flourished as a leader and he understands and motivates continued growth within his company (Namin-Hedayati, 2014). Mark Zuckerberg is known as an entrepreneur, programmer, and philanthropist. His transformational leadership style can be described as aggressive, demanding, innovative, and encouraging. As a leader who appreciates friendly debates, he grants his employees opportunities to offer product improvements and suggestions for Facebook (AdviseAmerica, 2014). Zuckerberg understands and admits that he has made many mistakes within his company, but as a transformational leader, he strives to turn those mistakes into growth opportunities (Rasing, 2011).

 

Credits

AdviseAmerica. (2014, May 27). Mark Zuckerberg Leadership Style. Retrieved November 6, 2014, from http://www.adviseamerica.com/mark-zuckerberg-leadership-style/

Belscher, B. (2012, December 29). The Management Style of Mark Zuckerberg. Retrieved November 6, 2014, from http://stylemeceo.wordpress.com/2012/12/29/the-management-style-of-mark-zukerberg/

Bosworth, A. (2010, March 4). Working with Zuck. Retrieved November 6, 2014, from facebook.com/note.php?note_id=339013388919

Carlson, N. (2012, January 25). Confessions of a Facebook employee: What It’s Really Like Working For Zuckerberg. Retrieved November 7, 2014, from http://www.businessinsider.com/confessions-of-a-facebook-employee-what-its-really-like-working-for-zuckerberg-2012-1

Duggan, T. (2014, May 23). Transformational Leadership Examples in Business. Retrieved November 6, 2014, from http://yourbusiness.azcentral.com/transformational-leadership-examples-business-4571.html

Glassdoor. (2014, January 1). 50 Highest Rated CEOs. Retrieved November 9, 2014, from http://www.glassdoor.com/50-Highest-Rated-CEOs-LST_KQ0,21.htm

Namin-Hedayati, F. (2014, March 5). Mark Zuckerberg’s Leadership Qualities. Retrieved November 7, 2014, from http://www.centerforworklife.com/mark-zuckerbergs-leadership-qualities/

Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Thousand Oaks, CA: Sage Publications.

Rasing, M. (2011, March 8). Mark Zuckerberg: Transformational Leadership in Action. Retrieved November 6, 2014, from http://ezinearticles.com/?Mark-Zuckerberg:-Transformational-Leadership-in-Action&id=6053695

Samson, N. (2013, November 7). 6 Leadership Lessons from Mark Zuckerberg. Retrieved November 7, 2014, from http://www.mensxp.com/work-life/leadership/21016-6-leadership-lessons-from-mark-zuckerberg.html

Smith, K. (2013, April 18). This Is What Life Is Actually Like Working For Facebook. Retrieved November 5, 2014, from http://www.businessinsider.com/what-its-like-to-work-at-facebook-2013-4

Walter, E. (2014, May 14). How to Lead Like Zuck. Retrieved November 6, 2014, from http://www.inc.com/ekaterina-walter/as-zuckerberg-turns-30-leadership-lessons.html

Wei Xi, S. (2013, July 4). Mark Elliot Zuckerberg. Retrieved November 6, 2014, from http://greatmindgreatleaders.wordpress.com/2013/07/04/mark-zuckerberg/

Woolley, P. (2014, January 1). Why We Desperately Need More CEOs Like Zuckerberg | Leadership Principles. Retrieved November 5, 2014, from http://socialleadershipdevelopment.com/leadership-qualities-1/mark-zuckerberg-ce

Defining a Transaction & Transformational Leader

Transformational and transactional leadership styles are models used by organizations to asses leadership styles. Transformational leadership style is based on social exchange and transactional style is based on economic exchange (Ismail, Mohamad, Mohamed, Rafiuddin, & Zhen, 2010). The style approach is an understanding of how leaders approach and manage their employees and subordinates. Assessing the style will help determine the leaders style of management (Northouse, 2013). The style approach is used as a method to determine how leaders combine the behaviors of task and relationship. Task behavior leaders use goals as a method of motivating group members. Relationship leaders use comfort as a tool to motivate (Northouse, 2013).

In building leadership trust, both transactional and transformational styles are important predictors (Ismail, Mohamad, Mohamed, Rafiuddin, & Zhen, 2010). Studies of leadership assessments have shown that using these leadership styles does have an impact on the leaders as well as the followers or employees. Leadership styles have been proven to be linked to employee performance, behavior, mood, attitude, and organization commitment. (Ismail, Mohamad, Mohamed, Rafiuddin, & Zhen, 2010; Strang, Kuhnert, 2009). If leaders have an understanding of the type of style they are, they will be mindful of their actions and behavior toward others. Assessments can be helpful for leaders to assess their actions and make improvements within their leadership style (Northouse, 2013). Knowing a leaders style can be useful for gaining insight into the challenges and complexities of leadership. Considering the results of the style assessment have been inconclusive across many different studies, the style approach has not produced a solid plan of action that can be used by leaders to produce a positive and thriving workforce (Northouse, 2013).

Both transactional and transformational leadership styles may lead employees to better trust their leaders. In a studied organization, Implementing assessments of leadership styles have been proven to be effective at increasing individual outcomes and trust in leadership. Leaders, trainers, and managers can use the style approach assessment as a way to instruct leaders and managers on how to be effective in the work area (Northouse, 2013). Leaders can use the assessment to create customized plans and development programs. Through the help of the style assessment, leaders can implement ways in which the employees can transfer over what they have learned into the workplace. If done properly, these techniques should foster positive growth within the organization by creating a quality bond between leaders and followers (Ismail, Mohamad, Mohamed, Rafiuddin, & Zhen, 2010)

I believe that the assessment can be just as helpful as a quarterly or weekly meeting with team members. In this sense, I don’t see this assessment any different than a normal question and answer meeting amongst team members and managers. If this assessment inspires and promotes conversation, then it can be deemed a good tool for building relationships within the workforce. However, I don’t believe the assessment is the key to building success of the leaders and followers. The successful relationship is likely due to the conversation, open communication, and self-awareness. If the leaders and followers do not have solid communication skills, then the assessment would not be effective. If they do have a relationship with good communication, then the assessment can produce positive results.

 

Credits

Northouse, P.G. (2013). Leadership: Theory and practice (6th ed.). Thousand Oaks, CA: Sage Publications

Ismail, A., Mohamad, M.H., Mohamed, H.A., Rafiuddin, N.M., & Zhen, K.W.P. (2010). Transformational and transactional leadership styles as a predictor of individual outcomes, Theoretical and Applied Economics, 17(6), 89-104. Retrieved from www.ectap.ro

Strang, S. E., & Kuhnert, K. W. (2009). Personality and leadership developmental levels as predictors of leader performance. Leadership Quarterly, 20(3), 421–433. Retrieved from http://www.sciencedirect.com

How does your website look? Really?

There are many ways to build a website. However, the question is, what is the website for. I have had many customers contact me wanting an estimate on their new website. However, most don’t have a clue as to what they are looking for. While some of them do have a clue of what they want, most just simply want a website with their company name on it. They don’t care how it looks and they don’t care who builds it. As long as they can go to www.blahblahblah.com, they are partial satisfied.

I have come across many websites that are just terrible in design, but the owner is satisfied because it works. They don’t care about what it looks like or how their readers view it, they just love the fact that they can place a website address on their business card.

What’s the issue? The issue is that every website has a purpose. That purpose can be to gain new customers, to satisfy old ones, to provide information or to sell products. The question in making sure that you have a good website is what does your website do for your readers. Forget about what you want and think about the customer. They are the ones that you are trying to connect with. If your customers don’t like it, they wont visit it again or do business with you.

A website is like a resume. If you put your resume together distorted, with old photos and information and it has no structure, there is a guarantee that you aren’t going to land that dream job. However, if your resume is put together professionally and well structured with relevant current information, you have a much greater chance of being looked at for the position. Your resume isn’t about what you want within it, it’s about what the employer wants. Your goal is to satisfy them.

How do you find out what your customers want? You simply ask them. Do some user testing to see what your customers think of your website. Don’t ask your family or friends, but ask a new customer or a potential customer. You could even ask a stranger at the coffee shop. Ask them to be honest and don’t worry about your feelings. If you wanted to, you could even give them a list of questions to answer or let them rank the site.

The results that you receive will be astonishing. Stop thinking that your opinion is the only one that counts. What you may think looks good, your customers may think the contrary. Get opinions and place them far above your own if you want to produce the best results for your website.

Management and Leadership: Defining the Relationship

The functions of management are planning, organizing, leading, and controlling (Lopez, 2014). Management is about coping with complexity. Good management brings a degree of order and consistency. Leadership, by contrast, is about coping with change (Kotter, 2001). Leadership is a behavior that predicts the attitude of the leader when facing a given situation. Leaders are individuals who are visionary and able to influence and motivate others (Lopez, 2014). Exhibiting leadership means not only influencing others but also doing so in a manner that enables the organization to attain its goals (Vroom & Jago, 2007). Managing and leading organizations effectively takes more than meaning well and supporting only popular causes.

Church (2014), ask the question of whether or not leaders can be developed or is their leadership a given natural trait. A traditional organizational development answer to this question might be that everyone has potential and that all employees deserve and need development. According to Kotter (2001), leaders can be developed from current employees with leadership potential. A successful business will understand and recognize employees with leadership abilities and should dedicate current leaders the responsibility of building the future leaders. Through careful selection, nurturing, and encouragement, dozens of people can play important leadership roles in a business organization. Organizational effectiveness is often taken as a strong indication of effective leadership (Vroom & Jago, 2007).

Leadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment (Kotter, 2001). Of course, not everyone can be good at both leading and managing. Some people have the capacity to become excellent managers but not strong leaders. Others have great leadership potential but, for a variety of reasons, have great difficulty becoming strong managers. Not everyone has the potential to be both a leader and manager. Each must have the potential or capacity to influence others and be able to make the right decision and ensuring that they are completed (Vroom & Jago, 2007; Kotter, 2001).

 

Credits

Vroom, V. H., & Jago, A. G. (2007). The role of the situation in leadership. American Psychologist, 62(1), 17–24.

Kotter, J. P. (2001). What leaders really do. Harvard Business Review, 79(11), 85–96.

Church, A. H. (2014). What Do We Know About Developing Leadership Potential?. OD Practitioner, 46(3), 52-61. Retrieved from Walden Library databases.

Lopez, R. (2014). The Relationship between Leadership and Management: Instructional Approaches and its Connections to Organizational Growth. Journal Of Business Studies Quarterly, 6(1), 98-112. Retrieved from Walden Library databases.

Creating a Personal Learning Network

PLN stands for Personal Learning Network. A PLN consist of a few friends you met at college with whom you shared ideas and resources, then after adding in a few of their friends and coworkers, the PLN grows (Digital Learning Team, 2013). Having a PLN is important because it offers up an opportunity to connect with individuals or businesses that could help in developing insight and a difference of professional opinion. A PLN works through sharing experiences and knowledge amongst members within the group. Through a PLN connection, the members can get answers to questions and take advantage of opportunities provided by those within their PLN.

A Personal Learning Network (PLN) reaches its most potential online through social networking platforms, twitter, facebook, LinkedIn and YouTube. Through these networks, professionals within a PLN can share personal and professional experiences through short status updates, blogs, photos, and videos. This information can be used as resources to followers and subscribers who have opted to stay connected with the individual or business (Digital Learning Team, 2013). PLN’s began with building relationships with the people that we meet face-to-face. It has however become most prominent in online social platforms where networks can grow tremendously by following or commenting to a friend or professional. Not having a PLN would mean missing valuable information and resources for career or personal knowledge.

Creating a Personal Learning Network

In creating a PLN, the creator must understand the audience. Once the audience is determined, the individual can decide how to create either a professional or personal brand image. In creating a PLN, it must be determined whether you are promoting yourself or your professional knowledge. In my PLN for personal use, I prefer to mention that I am married with kids, I like certain sports, my education background, what I like to do for fun, and I like to talk about religion and politics. With my professional PLN profile, I include a professional photo, and a history of my career and education. With this network, my conversations focus around my industry experience, trends, technology, and education. Each of my networks presents a friendly and inviting tone. My professional pages include selections from my resume and website. My personal profiles include information on what I like and believe.

A Personal Learning Network is a valuable resource that can be used by anyone from a friend to a stranger. A PLN is not only helpful for gaining information, but it is a great opportunity for individuals and businesses to network and share their professional knowledge and experience with those that are interested. With so many opportunities to develop skills and knowledge, having a PLN is essential to advancing and strengthening one’s understanding and education.

 

Credits

Digital Learning Team. (2013, April 3). What is a PLN? (and why would I want to know?).

Retrieved October 15, 2014, from http://digitallearningteam.org/2013/03/14/what-is-a-pln-and-why-would-i-want-to-know/

 

Disruptive Technology in Business

Disruptive Technology (DT) is a powerful means of broadening and developing new markets and providing new functionality, which, in turn, may disrupt existing market linkages (Christensen, 1997). DT is when a new technology upsets the way that things have been done. The radio replacing the newspaper, or the television replacing the radio as a source of news is DT. DT is not when a single event occurs that disrupts things. It is when a process plays out over time that causes new technology to either replace or reduce the use of an older method.

I believe that DT is beneficial to businesses and individuals because it offers more opportunity to me as a consumer and it causes product innovation at a better value. By not adopting DT, individuals and businesses could be potentially missing opportunities for a financial gain and powerful tools that could make their life or business more productive. The concern I have with DT is that it oftentimes takes me away from having to think for myself. An example would be a calculator replacing the deep analysis of problem solving, digital navigation systems causing its users to not have to remember directions, or a cell phone contact list that makes it so that I don’t have to remember a phone number. With so much dependent upon these technologies that we rely on to help us in our day-to-day, we can become lost without the benefits that DT has created. The benefit for me and why I appreciate DT is because I enjoy looking for new technologies to make my life easier so that I can spend more time on the things that matter to me most.

DT is not always created to remove or replace an older method; it creates an alternative to the way things are done. It creates typically simpler, more convenient, and less expensive ways of doing things (Christensen, Baumann, Ruggles, and Sadtler, 2006). DT is usually a result of the desire to make things easier, faster and convenient. Hence, landline telephones and traditional mail services now have email and cell phones. Not everyone has or will adapt to DT. Just as cell phones have not fully replaced the landline, DT ultimately could have a major impact on an existing market without totally displacing it (Schmidt and Druehl 2008). Not everyone uses the Internet or mobile device in place of reading a book, looking through a map, or earning a degree. Many people still select to drive a car, take a train, or travel by boat to get to their destination. There are however ways in which DT have caused those unwilling to adopt it, to have to have to make sacrifices. Video streaming services Redbox and Netflix have caused brick and mortar businesses such as Blockbuster to close shop because of Blockbusters inability to create or adapt to DT. Digital photography caused film to practically become obsolete. DT introduces threats to existing ways, but also opportunities for new sources of competitive advantage (Markides, 2006). The benefits of DT go to the risk takers. Without being willing to take risk, the individual or business would never accept DT.  Risk taking however, can have negative impacts if it is not executed properly and with a plan. For small businesses, the possible financial loss could be detrimental to the business. In order for DT to be successful, small businesses and individuals must weigh the benefits. Without proper knowledge and training on why DT is needed or how to use it for success, the transition will likely fail and DT will disrupt business.

Credits

Schmidt, G.M. and Druehl, C.T. (2008). When is a disruptive innovation disruptive? Journal of Product Innovation Management, 25, pp. 347–369.

Christensen, C.M. (1997). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA Harvard Business School Press.

Christensen, C. M., Baumann, H., Ruggles, R., & Sadtler, T. M. (2006). Disruptive innovation for social change. Harvard Business Review, 84(12), 94–101.

Markides, C. (2006). Disruptive innovation: In need of a better theory. Product Innovation Management, 23, 19–25.

Good Resources for Innovative Technology in Marketing

Foxman, E. R., & Kilcoyne, P. (1993). Information technology, marketing practice, and consumer privacy: Ethical issues. Journal of Public Policy & Marketing. 12(1), 106-119. doi: 10.1007/s10660-007-9000-y

This article Foxman and Kilcoyne (1993) discussed the privacy and customer behavior in the electronic market. The author explains that there is a growing concern from consumers about their privacy when dealing with state and federal government agencies and businesses. Consumers believe that their personal information is being computerized and sold without permission. They believe that companies should ask for permission before storing and selling their personal information.

Online consumer information, credit cards, billing details, and demographics are being collected, bought, and sold across the marketing industry. Furthermore, many consumers are unaware that their information is passed around. Consumers agree that the ethics behind collecting the information and sharing it is morally wrong. In working to understand how to resolve the privacy concern, there is debate on who owns the consumer information. Businesses feel that they own the information if they collect it or purchase from another business. They see nothing wrong with collecting the information considering the data allows them to produce better marketing services to the community. Consumers feel that the data belongs to them and should only be used with their permission.

A study within this article evaluates experimental situations in how consumer behavior is being influenced by websites and the personal information being requested from the consumer is affected by the message. The study examines to understand whether customers are manipulated into disclosing personal information through online methods. The results conclude that the consumers’ behavior is significantly impacted by their misunderstanding and misinformation. The author believes that in order for the confusion to be resolved, marketers need to make privacy details clear and they must be commitment to maintaining an ethical behavior when dealing with consumer privacy.

Privacy is a great concern within my industry. In marketing, we not only collect user data from potential customers, but we also collect it from current customers so that we can create the best possible marketing approach. Oftentimes, I have done and seen businesses collect user data and use it to their advantage for producing marketing campaigns. Understanding the legality behind consumer information handling is something that marketers must take seriously. This article is informative in explaining the reasons for protecting and clearly stating privacy policies. Consumers are unlikely to trust a company that shares their personal information without their consent.

 

Peattie, K. (2000). The New Marketing Era: Marketing to the Imagination in a Technology-Driven World/Marketing the Unknown: Developing Market Strategies for Technical Innovations. Journal Of Marketing Management16(5), 529-532.  Retrieved from the Walden Library databases

The author explores how technology has no affect on the behavior of the people who buy, use, and interact with the technology. It explains that marketing is not shaped by what the technology can do, but marketing instead centers on what the consumer will accept, understand, and want. Peattie (2000) further examined the changes that marketing is undergoing because of new technology. From the perspective of the author, marketing is psychological and technology will not change society considering it has no real affect on human emotions, drives, and capacities.

The author details that there are three changes that marketing must undergo in order to create successful strategies. The first is to move away from market research and instead look toward being able to interpret information extracted from the consumers through databases of information. The second change is moving away from traditional advertising and placing more attention on social media for communication. The final stage is to stop looking at marketing as a means of mass markets and move toward building a personal relationship with consumers through media outlets.

I enjoy the different perspective that technological tools used by consumers are not as important as whether or not they desire to use them. I find this relevant within the marketing industry particularly because marketing focuses on understanding the consumers’ desires and being able to fulfill them through brand messaging. The author explains that consumers choose products because of their feelings. This information can be valuable for someone within the marketing industry. As for the author’s perspective that technology does not influence emotions and direction, I disagree with this. To say that a television commercial has no effect on consumers’ buying habits, which are generally led by emotions, is to say that advertising has no real purpose.

 

Erragcha, N., & Romdhane, R. (2014). Social Networks as Marketing Tools. Journal Of Internet Banking & Commerce19(1), 1-12. Retrieved from the Walden Library databases

This research examines how the Internet effects people in their daily lives and how it is causing challenges for businesses due to the openness of social media. The author discusses how social media has opened a door for consumers to express their concerns to companies and this method of communication has facilitated interaction between business and consumer. This allows consumers to enjoy having power of opinion and change, but companies are feeling challenged because of the direct open forums of communication.

The author states that users are huge factors in generating brand awareness. This is due to users promoting the brand as well as creating content such as comments, questions and answers on forum boards, and adding to their custom profiles on social media accounts. Because of technology and social media, the consumer has helped enrich and improve company activities as well as add value to the brand image. The author goes further into details of what the five pillars of social media consist of. These pillars are participation, openness, conversation, community, and interconnection. The author believes that there has been a shift from marketing to interactive marketing. Marketing must move away from traditional transactional marketing to facilitator marketing which focuses on businesses sharing knowledge with the consumers and being open to consumers sharing knowledge with the business. The conclusion of this method will give power to the consumer, but will promote positive sales and satisfied customers.

This article holds valuable information to my industry considering marketing is all about the customer. The research explains that marketers should listen to consumers if they want to be successful. Marketers should never ignore the customers concerns and should allow their voice to matter. By doing this, the business can create a strong bond, a lasting relationship, and a brand promoter within the consumer.

 

Lipnická D., Ďaďo J. (2013). Marketing Audit and Factors Influencing Its Use in Practice of Companies (From an Expert Point of View). Journal of Competitiveness, 5 (4), 26-42.  doi: 10.7441/joc.2013.04.02

The study analyzes research conducted through the Delphi method. The research included two rounds of questionnaires obtained by the opinions of sixteen marketing experts. The research was carried out during the months of October and November 2012. The sixteen marketing experts were individually contacted by email and those experts were used to ensure research validity. The evaluation of the research was to determine the main factors and barriers influencing the results of a marketing audit. The results of the study show that marketing audits are a factor in company success.

The author believes that in order to conduct a comprehensive marketing audit, the method should have four major characteristics; comprehensive, independence from decision making managers, systematic, and the audit should be carried our periodically. Audits help companies with reviewing their marketing strategies, which can help improve business performance. A marketing audit can improve marketing management and problems. This is done by assessing and evaluating the company’s marketing ability, effectiveness, threats, and opportunities. The author explains that a marketing audit can be an important tool in discovering potential risks within the company’s activities.

Within the marketing industry, understanding how or why to market is a key component to creating a successful marketing plan. In creating a marketing strategy, marketers do comprehensive research and studying of consumers, and creating a marketing audit would be conducting a similar type of research on the current structure of the businesses and its marketing efficiency.

Managing a Product-Harm Crisis

A crisis management is the method in which a person or business handles an emergency situation. In business, a crisis can be anything from having to recall a defective product or dealing with an economic change that causes a drop in sales and brand trust. Within this article I will attempt to examine a product-harm crisis and how management can affect whether or not the company can recover once a crisis happens.

Having the ability to understand and react promptly when a crisis arises is vital for maintaining a businesses market share, trust, and reputation. Improperly managing a crisis can have the potential to damage carefully developed equity, and spoil consumers’ quality perception (Chen, Ganesan, & Liu, 2009). When dealing with a crisis, all companies need to be involved in the recover and rebuilding process. To properly manage a product crisis, the company must be prepared to do so. Without preparation, time, finances, and consumer trust will likely have negative impacts. In order to sustain reputation, and prevent a major financial loss, the company must react promptly, honestly, and clearly. I will address what a product-harm crisis is and how to manage it effectively.

A Proactive Strategy

Chen, Ganesan, and Liu (2009) explains that a product harm crisis and recalls have the potential to damage a company’s brand, spoil consumer perception, and ruin a company’s reputation along with cause market share losses. During a 12-year study, it was discovered that a proactive product-recall strategy could likely hurt a company financially more than a passive recall strategy. This is because the tools used by financial market and investors will predict a likely fall in value. This differs from research done by Vassilikopoulou (2009), which explains that there is a sensitivity of dealing with recalls. Being proactive, honest, and financially strategic on resolving the recall is paramount for success. Vassilikopoulou (2009) further stated that a product-harm crisis can impact a company’s sustainability. Ranking factors and relative importance do have an influence during a product-harm crisis. Understanding the likelihood of a crisis could also help create a more accurate crisis management plan. The article explains that corporate social responsibility, organizational response, time and external effects are crucial in managing a crisis. While there may be only a small chance of a crisis occurring, all employees and managers should be prepared and ready to effectively respond if needed.

Maintaining Consumer Trust

In the case of the Fitbit Force, a wrist-worn product that tracks fitness activity. After the launch of it’s new product, 1.7% of more than 100 million users began developing skin rashes where the device was being worn. CEO James Park, responded almost immediately to the news, delivering an apology and product recall with a full refund for all of the devices. Later test results showed that users were likely experiencing allergic contact dermatitis, which is when an itchy rash is caused by a substance that comes into contact with your skin (“Contact Dermatitis,”, 2014). The likely cause for the rash was users not properly cleansing the area beneath the all-day worn device and their skin. The Fitbit company could have easily blamed the rash on user error, but instead decided to take full responsibility and issue a recall. Instead of dealing with a consumer backlash because of their lack of responsiveness, the company continues to do well and consumer trust was sustained.

On the other end, there was the Kryptonite bicycle lock crisis in 2004. After an Internet video surfaced of a user hacking the well-respected company’s lock, many more videos and complaints began forming. The videos showed that the lock could be easily unlocked by jamming it with a plastic pen. Krytonite eventually did address the situation weeks later with a product recall and explained that the issue dealt with all types of cylinder locks including those associated with vending machines and some automobile ignitions. Because of the extended time for the company to respond, media and consumers had been staining the company’s brand for days. This eventually led to consumer trust being lost. Beyond the cost of the recall, millions of dollars had been spent in order to rebuild the company’s reputation.

The Consumer Relationships

Yannopoulu, Koronis, and Elliot (2011) examined more than the brands’ reputation and timeliness, they also examined consumers’ trust during a brand crisis. Yannopoulu et al. explained that dealing with a crisis is focused around brand trust and risk. A crisis should be maintained through a direct experience like that of Fitbit where users received an email from the CEO about the recall, versus mass social media. Conducting and analyzing 22 in-depth interviews and content analysis that explored consumers’ experiences throughout a crisis concluded these results. The key finding is that media outlets and third parties can either preserve or damage consumer to brand trust. Relationship and brand trust are essential during a crisis and companies cannot afford to neglect media aspects if they want to retain customers. Cornelia and Mihaela, (2011) agree that relationships are important and marketing strategies should focus on consumers’ proximity to customers, needs, and their interaction. In addition, the company should remain close to the customer, remain adaptive and present a human and friendly language. According to Cornelia and Mihaela (2011), marketing may be just the solution for many companies to get out of the crisis.

Conclusion

Research has indicated that a proactive strategy may have positive consequences on consumer perception if the crisis is responded to with a constant, active, and firm response (Chen, 2009). The business affected should respond quickly to the crisis and should focus their attention on building and strengthening consumer trust. During a crisis, marketing strategies should be analyzed and focus on resonating emotionally with the consumer through a human, friendly language (Cornelia & Mihaela, 2011). Without proactively managing the crisis, the risk of negative impact rises. The challenge of a crisis is how the information is used once the company receives it. If the company chooses to take the lead and get out in front of the negativity or potential negativity, then they can manage some level of control. To successfully manage a business crisis, the company’s voice must become the trusted channel of information.

 

Credits

Chen, Y, Ganesan, S., & Liu, Y. (2009). Does a firm’s product-recall strategy affect its financial value? An examination of strategic alternatives during product-harm crises. Journal of Marketing, 73(6), 214–226.

Vassilikopoulou, A., Lepetsos, A., Siomkos, G., &.Chatzipanagiotou, K. (2009). The importance

of factors influencing product-harm crisis management across different crisis extent levels: A conjoint analysis. Journal of Targeting, Measurement, and Analysis for Marketing, 17(1), 65–74.

Yannopoulu, N., Koronis, E., & Elliot, R. (2011). Media amplification of a brand crisis and its effects on brand trust. Journal of Marketing Management, 27(5/6), 539–546.

Cornelia, M., & Mihaela, B. (2011). About the crisis marketing and the crisis of marketing. Journal Of Academic Research In Economics, 3(3), 311-316.

Contact Dermatitis. (2014, July 16). Retrieved October 7, 2014, from

http://www.mayoclinic.org/diseases-conditions/contact-dermatitis/basics/definition/con-20032048

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