Institutional Environment and Marketing Practices in Emerging and Transitional Economies: Testable Hypotheses

Abstract

This manuscript examines how the perceived institutional environment in emerging and transitional economies (collectively referred to as TE–s) may account for differences among organizations in their institutionalization of marketing practices. An important aim of macro institutional reforms is to foster more efficient markets and a more vibrant and innovative private sector. The results have been mixed; macro level explanations abound but there is a dearth of research on what happens at the organizational level. Notwithstanding the exigencies of globalization, the distinctive nature of TE–s as well as cross-national differences in institutional reforms imply that we cannot assume either that emerging patterns of marketing practice will carbon copy the industrial world or that the same patterns will emerge across TE–s. Unfortunately, research on marketing in TE–s has been particularistic in that it has focused on specific strategies at a point in time rather than on a broad spectrum of organizational responses over time. Moreover, it has focused on the effectiveness of strategic responses rather than on the development and sustained application of organizational capabilities and practices. We focus on macro, organizational level institutionalization of marketing practices, i.e., irreversible and ongoing changes that habitualize and validate new norms and behaviors concerning how organizations relate to their markets (Coviello et al. 2002). We employ the Contemporary Marketing Practices (CMP) perspective because of its concern with the validation, enforcement and habitual use of routines by which the organization relates to its clients (Coviello et al 1997). We adopt the CMP taxonomy of transactional, dbase, interaction, network marketing (Coviello et al. 2002) and e-marketing (Coviello et al. 2001).