Dealing with Market Dynamism

ReseaRch aRticle

Abstract: 0 Following a dynamic capabilities approach, this study offers a contingency view of global

account management in a highly dynamic market.0 Specifically, the paper proposes that among the three processes of global accountmanage-

ment—i.e., intelligenceacquisition,global integration, and reconfiguration—reconfigurationplays a central role for supplier firms in achieving global account competitiveness whenmarket dynamism is high.

0 Based on survey data collected from global account executives in a diverse set of indus-tries,thefindingssupporttheabovepropositionandfurthersuggestthatintelligenceacquisi-tionandglobalintegrationcanfacilitateafirm’sreconfigurationprocessesinglobalaccountmanagement.

Keywords: Global account management · Global market dynamism · Dynamic capabilities approach · Global marketing strategy

Manag int Rev (2011) 51:635–663DOi 10.1007/s11575-011-0090-3

Dealing with Market DynamismThe Role of Reconfiguration in Global Account Management

Linda H. Shi · Fang Wu

Received: 06.03.2009 / Revised: 31.01.2010 / Accepted: 14.02.2011 / Published online: 16.09.2011© Gabler-Verlag 2011

the authors are listed alphabetically. Both authors contribute equally to this paper.

Dr. l. h. shiUniversity of Victoria, Victoria, canada

Dr. F. Wu ()school of Management, University of texas at Dallas, Richardson, Usae-mail: [email protected]

636 l. h. shi and F. Wu

Introduction

Globalization of the world marketplace is fundamentally transforming the ways in which companies manage their customer-supplier relationships. One noticeable change among multinational corporations is the establishment of global accounts to centrally coordinate activities with their demanding global customers in offering standardized pricing, logis-tics, and customer service (Yip and Bink 2007). Global account management (GaM) refers to the organizational forms and processes of a multinational supplier by which specialized personnel or teams centrally coordinate worldwide selling activities to serve these global customer accounts (Montgomery and Yip 2000). GaM is considered to be one kind of key account management (KaM) approach whereby a supplier serves glo-bal customers that have presences in multiple countries rather than in the same country (homburg et al. 2002). as multinationals strive to globally integrate and coordinate their organizational strategies and processes, they often face increasing challenges brought forthbythedifficultiesofimplementingtheirglobalaccountsandtheuncertaintiesrelatedto the rewards of this new organizational form (homburg et al. 2002).

Despite the importance and the challengesofGAM,ourknowledge in thisfield israther limited. Most of the existing literature centers on several issues, including the driv-ers and performance implications of GaM strategies (e.g., Montgomery and Yip 2000; shi et al. 2010), the selection of global account customers (e.g., arnold et al. 2001a; toulan et al. 2002) , the design and implementation of global account programs (e.g., Birkinshaw et al. 2001; harvey et al. 2003; homburg et al. 2002; Yip and Bink 2007), and the role of global account managers (Wilson and Millman 2003). While such research offers interesting insights for multinationals to better manage their global accounts, sev-eral issues remain to be resolved. First, although previous studies on the design of global accountshaveclassifiedthedifferentformsofGAMandofferedpracticalroadmapsonhow to implement those accounts (e.g., homburg et al. 2002; Yip and Bink 2007), few have been devoted to delineating the processes necessary for a supplier to manage its global accounts effectively (Millman and Wilson 1996). this can be problematic consid-ering that global account programs require special interorganizational processes for key global customers that are not available to other customers (homburg et al. 2002; shi et al. 2004; shi et al. 2005). second, the literature lacks the sound theoretical framework and empirical support to explain the relationship between the capabilities embedded within asupplier’sGAMprocessesandthesupplier’sGAMprogrameffectiveness.Third,eventhough establishing global accounts is well recognized as an organizational response to the heightened competitive intensity and globalization of the market environment (hom-burg et al. 2002; Montgomery and Yip 2000; Yip and Madsen 1996), the literature has largelyignoredhowchangesintheglobalmarketinfluencetheperformanceoutcomesof global accounts. as noted by homburg et al. (2002), the internal design and formation ofkeyaccounts,suchasglobalaccounts,arestronglyinfluencedbythecharacteristicsofthe external market environment. therefore, it is important to verify whether the perform-ance consequences of global accounts still hold in a highly dynamic market.

Tofilltheaboveresearchgaps,thispaperaimstocontributetotheliteratureinthreeways. First, building on a dynamic capabilities approach (teece et al. 1997), it concep-tualizes GaM as consisting of three key processes—intelligence acquisition, global

637Dealing with Market Dynamism

integration,andreconfiguration—andfocusesoninvestigatingtheseprocessesfromtheperspectives of global supplier organizations. such conceptualization of GaM provides a theoretical framework to examine how to improve GaM program effectiveness using firm-specificprocesses.Second,thestudyaimstoempiricallyvalidatetheaboveconcep-tualization using cross-country and cross-industry survey data. Previous GaM studies are either qualitative in nature or provide limited empirical support for a GaM program (homburg et al. 2002; Birkinshaw et al. 2001). to the best of our knowledge, this study isoneofthefirstlarge-scaleempiricalstudiesinthisfield.Third,andmostimportant,thestudy offers a contingency view of GaM by examining the contingency effect of global marketdynamismontherelationshipbetweenreconfigurationandGAMperformance.Thisapproachverifieswhether reconfiguration is indeedcrucial toGAMcompetitive-nesswhenmarketconditionschange.ThefindingshereindicatethatofthosethreeGAMprocesses,reconfigurationplaysacentralroleforsupplierfirmsinaddressingahighlydynamic market. Finally, this study examines the interplay of the three processes in a GaM program. Findings suggest that intelligence acquisition and global integration will facilitateafirm’sreconfigurationprocessesinmanagingglobalaccounts.

Theoretical Background

Brief literature Review

Therearethreemajorstrategicperspectivesinresearchingsuppliers’GAMperformance:the global marketing strategy perspective (Montgomery and Yip 2000); the relation-ship marketing perspective (Birkinshaw et al. 2001; schultz and evans 2002); and the resource-based view, or RBV (homburg et al. 2002; Zupancic 2008).

in the GaM literature, most studies have adopted the global marketing strategy per-spectivetoviewasupplier’sGAMstrategy,globalizationdrivers,andcustomerdemandas the primary determinants of GaM performance (shi et al. 2010). the fundamental propositionofglobalmarketingstrategyisthatafirmwillenjoysuperiorperformancewhen it can successfully develop and implement GaM strategies to address the exter-nal environment. the relationship marketing perspective has applied either the power dependency framework (Birkinshaw et al. 2001) or the trust and commitment framework (Morgan and hunt 1994)toexplainorganizations’behaviors.Thebasicrationaleofthisperspective is that the characteristics of the GaM relationship, such as power dependency (Birkinshaw et al. 2001), conflict (Wengler et al.2006), and trust (schultz and evans 2002),caninfluencethesupplier’sdecisionmakingandrelationalbehaviors,whichinturninfluencetherelationaloutcome.Followingtheresource-basedview,recentGAMresearchsuggeststhatthefirmshouldbeviewednotinlightofitsstrategiesandrelation-ships but as a bundle of tangible and intangible resources/capabilities embedded within the GaM processes (homburg et al. 2002; Zupancic 2008). it is argued that success-fulconfigurationsofresourcesandcapabilitiesinkeyaccountmanagementcanprovidecompetitiveadvantageforafirm(Homburgetal.2002). Please refer to table 1 for the key empirical studies of GaM.


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Our study extends the resource-based view of GaM research into the dynamic global markets, where heightened competition often results in fast and unpredictable changes in theglobalmarket.SomeresearchershavechallengedRBVtoexplainhowafirmremainscompetitive in a rapidly changing environment where the competitive advantage of a particularfirm-specificresourceisquicklyeroding(EisenhardtandMartin2000; teece et al. 1997).Asaresult,theyhaveattributedafirm’sdynamiccapabilities,whichrefertoafirm’sabilityto“integrate,buildandreconfigureinternalandexternalcompetencesto address rapidly changing environments” (teece et al. 1997, p. 516), to become its source of sustained competitive advantage (eisenhardt and Martin 2000). Following the dynamiccapabilitiesapproach(DCA),ourstudydelineatesthefirm-specificprocessesinGAMthatmayallowthefirmtoachievesustainablecompetitiveadvantageinahighlydynamic market. in addition, consistent with global marketing perspective, our study emphasizestheroleoftheglobalmarketenvironmentasanimportantfactorininfluenc-ing GaM performance. as such, we examine the contingency effect of market dynamism on the relationship between GaM processes and global account competitiveness. Below, we will explain our theoretical foundation in more details.

Dynamic capabilities approach and Global account Management

OneimportantaspectoftheDCAapproachistheidentificationofafirm’sdynamiccapa-bilitiesembeddedinthespecificorganizationalprocesses,whichthefirmusestoacquireandintegrateresourcesandachievenewresourceandroutineconfigurationswhenmarketconditions change.These kinds of firm-specific processes can “create value for firmswithin dynamic markets by manipulating resources into new value-creating strategies” (eisenhardt and Martin 2000, p. 1106). as such, developing dynamic capabilities in the global market is an active and iterative organizational process that requires the crea-tion, combination, and renewal of differential knowledge and resources to address rapid changes ahead of the competition (eisenhardt and Martin 2000; Grant 1996; Kogut and Zander 1992).

In linewithDCAapproach, this studyviews reconfiguration as thekeyprocessofdynamiccapability,sinceitreflectsafirm’sabilitytoachievenewresourceandroutineconfigurationstomeetrapidenvironmentalchanges(GibsonandBirkinshaw2004). We propose that the GaM programs that can acquire, integrate, and recombine the necessary resources(i.e.,knowledge,financialresources,andhumanintelligence)aremorelikelyto succeed in retaining and growing business with global account customers. in addition, the global market is a highly dynamic market in which unpredictable changes such as financialcrisesorpolicychangeshappenfrequentlyaroundtheworld.Insuchamarket,it becomes a necessity to identify and verify the organizational processes that can create competitive advantage when the market evolves rapidly.

this study adopts the emerging view of dynamic capabilities into the global account setting, with an emphasis on the role of organizational processes that collectively con-stituteafirm’sdynamiccapabilitiesinGAM.WebelievetheDCAcanprovideagoodtheoretical underpinning for managing global accounts for three reasons. First, the devel-opment of dynamic capability is intertwined with the knowledge evolution process (Zollo and Winter 2002), in which the organization needs to go through experience accumula-


tion,knowledgearticulation,andknowledgecodificationinorder tobuild itsdynamiccapabilities. in the context of GaM, global account executives, who serve as boundary spanners (aldrich and herker 1977) between customers and suppliers, are responsible for acquiring, disseminating, and interpreting information (cohen and levinthal 1990). as such, global account executives take the lead in the dynamic capability development process. second, the Dca is based on the assumption of market dynamism (teece 2007; teece et al. 1997), which means that the high-velocity in the market makes it crucial to developdynamiccapabilitiesinorderforthefirmtoenjoysustainedcompetitiveadvan-tage (eisenhardt and Martin 2000). the adoption of global accounts makes suppliers more vulnerable to rapid changes and the intense competitive battles around the world (Montgomery and Yip 2000). as a result, they must become agile in their resource and routineconfigurations inorder tobecomecompetitive in theirGAMprograms.Third,asmentioned above, the dynamic capabilities are identifiable, firm-specific processesthatcancreatevalueforthefirmwithinhighlydynamicmarkets(EisenhardtandMartin2000).Theuniquenessofglobalaccountprogramsofferssupplierfirmstheopportunitytodevelopthosefirm-specificprocessessuchthattheyaredifficultforotherfirmstoimi-tate due to the complex nature of GaM (shi et al. 2005) and have the potential to become a source of competitive advantage for the global suppliers. For these reasons, we believe GaM offers a fertile context for the application of the Dca.

Our research perspective is different from a market orientation perspective in stud-ying GaM. On one hand, market orientation focuses on organizational culture and is moreabstract,whiletheDCAfocusesonidentifyingfirm-specificorganizationalproc-esses. second, market orientation treats all customers equally and as a whole, while the approach here differentiates between global account customers and average customers, sincetherearespecificorganizationalprocessesthatareofferedonlytoglobalaccountcustomers (homburg et al. 2002). Below, we identify the three organizational processes in GaM and discuss them in detail.

Organizational Processes in GAM

Following the dynamic capabilities perspective, this study emphasizes the role of organ-izational processes that collectively constitute a firm’s dynamic capabilities inGAM.teece et al. (1997)havedelineated three rolesoforganizationalprocessesas“coordi-nation/integration; learning; and reconfiguration” (p.518). Similarly, Eisenhardt andMartin (2000)haveidentifiedspecificorganizationalprocessesasdynamiccapabilitiesthatareabletogain/release,integrate,andreconfigureresourceswithinandacrossfirmboundaries.Subsequently, thisstudyidentifiesthreeorganizationalprocessesinGAM:information acquisition, global integration, and reconfiguration. they are by no means exhaustive of all the processes involved in GaM; rather, they are consistent with the DCA,whichholdsthatcompetitiveadvantageinGAMliesinthespecificorganizationalprocessesthatallowittoacquire,integrate,andreconfigureinformation/resourcesfromtheexternalmarket(D’Aveni1994; shi et al. 2005; teece et al. 1997).ThisidentificationhasalsobeenverifiedthroughaseriesofqualitativeinterviewsconductedearlierbyShiet al. (2005). each of the three processes is discussed below.


information acquisition

the information acquisition processes in GaM refer to the organizational processes a global supplier uses to gather market information from global account customers and monitor the changes in the competitive business environment (arnold et al. 2001b; shi et al. 2005). this practice is rooted deeply in the literature on market orientation and organi-zational learning (e.g., Jaworski and Kohli 1993; sinkula 1994), which has established that acquiring information from the market environment is a major component of the information processing function. Global account executives, who serve as information gatekeepers between the external global environment and internal organizational units, areinchargeofacquiringandfilteringtheinformationfromtheglobalmarket.Moreo-ver,afirm’sabilityto“recognizethevalueofnewinformation,assimilateandapplyitto commercial ends” (cohen and levinthal 1990, p. 128), also known as its absorptive capacity, is a function of its prior related knowledge. in the context of GaM, global accountexecutives’priorexperienceindealingwiththecomplexityoftheglobalenviron-mentcanincreaseafirm’sabsorptivecapacitytobetterunderstandandevaluateavarietyof external signals, such as technological advancements, customer preference changes, andcompetitors’campaigns.Thiswilldeterminethestrengthandscopeofnewmarketinformationthefirmisabletoacquirefromtheenvironment,whichtheglobalaccountexecutives can then use to create better solutions to deal with global market uncertainties (cohen and levinthal 1990; Zahra and George 2002).

in the context of GaM, information acquisition centers on two major sources: global customers and global competitors. customer information acquisition refers to the proc-ess of ascertaining and understanding the explicit and latent needs of the global account customers, whereas competitor information acquisition refers to the process of learning andunderstandingcompetitors’ strengthsandweaknesses (Arnoldetal.2001b; shi et al. 2005).Customer information acquisition can allow afirm to continuously explorecustomers’expressedandlatentneeds(Hanetal.1998). With such an understanding, the firmcanbettermanageitsGAMrelationshipsbymaintainingabondwitheachglobalaccount and receiving timely feedback from them (slater and Narver 1995). By actively collectinginformationfromcompetitors,afirmcanbetterevaluatetheirstrategiesandpositions as well as its own strengths and weaknesses, which could assist global account executives inmakingmore accurate decisions to reconfigure organizational resourcesand routines as needed ahead of the competition. in short, both processes allow suppliers to gain access to new information from the global environment, which can lead to the creation of new organizational solutions to better address the needs of the global account customers. it is therefore essential in the operations of GaM.

Global integration

Global integration processes in GaM are the organizational processes a global supplier uses to centrally coordinate and integrate its worldwide activities across different country markets aimed at serving global account customers. this includes the integration of fund-ing, personnel expertise, and market/technological information across different markets, whichallowsforthefreeflowoftheseresourcesacrosscountryborders.Italsoentails


participating in all major markets where global account customers conduct business, integrating promotional campaigns on a global basis to better counterattack competi-tive moves worldwide, and coordinating strategic planning and manufacturing operations across country markets (Birkinshaw et al. 1995; Krobin 1991; Zou and cavusgil 2002). according to Zou and cavusgil (2002), global integration is a major component of global marketing strategy. a higher degree of global integration helps multinational suppliers better serve their global account customers by coordinating resources and activities in multiple country locations and overcoming challenges in GaM such as complex report-ing lines, different reward structures, and cultural environments. in addition, global account executives’ prior experience in different countrymarkets can facilitate globalintegrationprocessesbecausetheyhavetheabilitytofindthecommongroundessentialfor streamlining the global integration processes and coordinating the worldwide activi-ties seamlessly.

Reconfiguration

AglobalsupplierusesreconfigurationprocessesinGAMtoachievenewresourcesandroutinecombinationsinordertoaddressthechangesinglobalaccountcustomers’needsahead of the competition. these include reallocating organizational resources and person-nelacrossdifferentcountrymarkets,reconfiguringtheresourcecompositionofparticularmarkets,andredefiningorganizationalstructureandprocessesbasedonchangingmarketdemand.Inglobalmarketsthatareoftencharacterizedbyhighvelocity,reconfigurationisconsideredespeciallycriticalforrealizingafirm’sdynamiccapabilitiesincreatingvalueand dealing effectively with rapid changes (eisenhardt and Martin 2000). although rep-licationbasedonexistingknowledgecanhelpfirmsdealwithmoderatelydynamicmar-kets,reconfigurationmattersmoreinmarketswithahighrateofchange(March1991; teece et al. 1997).

in the dynamic global market, global account executives within supplier organizations take the lead in the reconfigurationprocesses.Theymust constantlymonitor environ-mental changes, reallocate resources, and realign business processes to better serve their globalaccountcustomers.ReconfigurationhasbeenidentifiedasacrucialaspectofGAM(shi et al. 2005).Achievingresourceandroutinereconfiguration,however,isalearnedorganizationalskillthatisdifficulttoachievewithinalimitedtimeframe(Teeceetal.1997). its development requires frequent practice over time. in the GaM context, the glo-bal account executives are required to repeatedly reorganize routines and procedures with an emphasis on exploring new opportunities and threats. the processes of accumulating suchfirm-specificexperiencecanlowerthelearninginvestmentandallowtheexecutives

Fig. 1: the conceptual model


to engage in experience-based information processing to deal with the fuzzy signals in the highly uncertain market (Zollo and Winter 2002). this leads to more timely and accurate decision-making amid rapid global environment changes.

Below we will present our conceptual model (see Fig. 1) and the hypotheses.

Hypotheses

ReconfigurationandGlobalAccountCompetitiveness

IntheGAMcontext,reconfigurationprocessesincludeachievingnewresourcecombina-tions across the global market (Kogut and Zander 1992), transferring necessary resources andkeypersonnel to themarket inneed, redefiningorganizational structurebasedonchanging market opportunities (eisenhardt and Martin 2000), and adopting best prac-ticesaroundtheworldtoachievehigherefficiency(Teeceetal.1997). having effective reconfigurationprocessesinGAMcanhelpmultinationalsuppliersachieveglobalcom-petitiveness when market conditions change.

First,theDCAindicatesthatcompetitiveadvantageliesintheabilityto“reconfigurethefirm’sasset structure,and toaccomplish thenecessary internalandexternal trans-formation” (teece et al. 1997, p.520). The development of reconfiguration in globalaccountsisafirm-specificprocess,andsuchanabilitytorenewisanorganizationalskillthatislearnedovertime.Globalaccountexecutivesareattheforefrontofafirmtodealwith its global account customers. they are both the designers and implementers of a firm’sGAMstrategies.Asglobal account executives accumulatemore experiences inreconfiguration,theybecomemorealertinscanningthemarketandtechnologicalfield,and more skillful in applying new information and creating better solutions to deal with the environmental changes (teece et al. 1997; Kogut and Zander 1992). such experience accumulationprocessesinglobalaccountsbecomeembeddedwithinthefirmovertime,making itdifficult forcompetitors to imitate (EisenhardtandMartin2000). they will alsoprovideuniqueandvaluableassetsforafirmtobettermanageglobalaccountsandcompetemoreeffectivelywithotherfirmsintheglobalarena(Teeceetal.1997).

Second, the development of reconfigurationprocesses in global accounts is guidedby the evolution of the learning mechanisms (eisenhardt and Martin 2000; Zollo and Winter 2002), which implies that global account managers need to go through the experi-enceaccumulation,knowledgearticulation,andcodificationofthelearningprocessesinordertoacquirereconfigurationskills.Reconfigurationprocessescanrangefromsmallvariations in global account programs based on existing experience to the creation of new knowledge, whereby global suppliers recombine existing resources to attain new synergistic value (Kogut and Zander 1992).Thevariationsofthereconfigurationproc-esses imply the need to deal with different situations in global markets and to accumulate situation-specificknowledgebymonitoringandanalyzingsituationsbasedonexistingknowledgewhiledevelopingefficientorganizationalprocessestodealwiththeenviron-mental changes (eisenhardt and Martin 2000). such tacit experience accumulation proc-essescangivethefirmanopportunitytopracticerecombiningorganizationalresourcesand restructuring organizational routines, thereby deepening the development of this


dynamic capability (Zollo and Winter 2002).Moreover,reconfigurationprocessesinglo-balaccountscanbealotmoreefficientiftheknowledgegainedfrompastexperienceisclearly communicated within the organization (Zollo and Winter 2002). Global account executives need to clearly articulate and codify the knowledge and experience they have gained in formal manuals or procedures in order to foster a common understanding within thefirmandprovideaclearguidelineonwhatspecificactionscanbetakentoadapttothechanges.Throughsuchclearcommunicationfromtheglobalaccountexecutives,thefirmcan develop a system-wide change effort and implement new solutions that can be sup-ported within the organization to accommodate rapid changes (Zollo and Winter 2002). Assuch,anefficientreconfigurationprocesscanresultinfasterresponsetimeindealingwith changes in the global market, thereby becoming a source of competitive advantage.

Third,firmswitheffectivereconfigurationprocessesarebetterablethantheircompeti-tors to retain and grow their business with global account customers. having effective reconfigurationprocesses inglobalaccountsallows thesupplier tocomeupwithnewsolutions to customer requests and tailor products and services to better serve those cus-tomers. this can provide competitive advantage for the global supplier and lead to a long-termrelationshipwiththecustomers.Forexample,XeroxreducedBMW’sprintingandstoragecostsbycreatinga“print-on-demand”usermenuthatprovidesonlythecustom-er’snativelanguageinsteadofallEuropeanlanguages.Asaresult,BMWbecameoneofXerox’sloyalcustomers(JeannetandHennessey2003). as such, we hypothesize that:

Hypothesis 1: Reconfigurationispositivelyassociatedwithglobalaccountcompetitive-ness.

the Moderating Role of Market Dynamism

the term market dynamism refers to the rate of changes in the global market environ-ment. this includes changes in the composition of global customers and their preferences (Jaworski and Kohli 1993), the volatility in the global business environment (such as changes in competitor moves and product/service offerings), and changes in the produc-tion process (Germain et al. 1994). the dynamics of the global market and the fast devel-opmentofemergingmarketsmakeitincreasinglydifficultformultinationalsupplierstodesign and implement their global account strategies worldwide (Montgomery and Yip 2000). thus, developing dynamic capabilities in global accounts is a must for achieving global competitiveness in volatile markets.

this paper extends the view of dynamic capabilities into the global account setting and suggests that global account competitiveness depends on the level of market dynamism. Specifically,inlowandmoderatelydynamicmarkets,dynamiccapabilitiesrelyonexist-ingknowledgewherebyfirmscanreplicateandrefineexistingprocessestodealwiththepredicable changes in the global environment. in contrast, with highly dynamic markets, dynamiccapabilitiesdependonthecreationofnewknowledgewherebyfirmshavetorenewtheirknowledgestoresandreconfiguretheirorganizationalresourcesandroutinesefficientlytoensureglobalaccountcompetitiveness(EisenhardtandMartin2000; teece et al. 1997).


First, in the global market that is characterized by nonlinear and unpredictable changes, afirm’sexistingknowledgestoresarevery likely tobecomeobsoleteandevencreaterigiditiesthatpreventthefirmfromtakingagileactionstoaddressthechangingenviron-ment (leonard-Barton 1992). as a result, the development of dynamic capability in its global accounts relies more on the fast creation of new knowledge to address the chang-ing situations rather than on existing knowledge stores (eisenhardt and Martin 2000; Zahra and George 2002).Reconfigurationinglobalaccountsgivesasuppliertheoppor-tunity to recombine its existing knowledge base and create new synergies to adapt to the rapid shift in the global environment, which is critical for its survival in a highly selective environment (Grant 1996; Kogut and Zander 1992).

second, under a highly volatile market, the development of dynamic capabilities relies onsimpleorganizationalroutinesthatallowthefirmtoflexiblyreconfigureresourceandroutine to address the rapid changes (eisenhardt and Martin 2000; Zahra and George 2002).Thisflexibilitygivestheglobalsupplieranadvantageinrapidlyassimilatingnewmarket and technological information into its existing routines (Zahra and George 2002), thereby creating new alternatives to better serve its global account customers ahead of the competition.Moreover,thedevelopmentofreconfigurationprocessesrequiresfrequentpractice over time (Zollo and Winter 2002). the rapid market changes leave the supplier withnochoicebuttofrequentlyreconfigureitsorganizationalresourcesandroutinesinorder to survive in the highly competitive global environment. such frequent practice of reconfigurationwillallowthefirmtobetteranticipate themarketchangesand takeactionstoadapttothechangesaheadofthecompetition.Thus,reconfigurationbecomesespecially critical in managing global accounts in a highly dynamic market.

Third, effective reconfigurationprocesses inglobal accounts can alsohelp create aseriesoftemporaryadvantagesforsucceedinginahighlydynamicmarket(D’Aveni1994; eisenhardt and Martin 2000). Developing dynamic capabilities is an iterative process that requires constant monitoring, assimilation, and response to real-time information (teece et al. 1997; Zollo and Winter 2002).IntheGAMcontext,reconfigurationprocessesallowsuppliers to integrate real-time information from the global market into their existing knowledge base and generate multiple new solutions to cope with the rapid changes in the environment. For example, during the 2008 Beijing Olympics, a famous chinese athlete who was a Nike spokesperson in china had to quit the race due to injuries. Nike immediately responded to this new information by redesigning its chinese advertising campaign to support the athlete. such knowledge integration and creation effort through reconfigurationcanleadtoaseriesofshort-termcompetitiveadvantagesthatcontributeto superior performance in global accounts for the long run.

Hypothesis 2: Whenmarketdynamismishigh,therelationshipbetweenreconfigurationand GaM competitiveness becomes stronger.

FacilitatingReconfigurationProcessesinGlobalAccounts

Asarguedabove,havingeffective reconfigurationprocesses iscrucial forsuppliers indealingwithchanges in theglobalarena.However, reconfiguration inglobalaccountsdoes not constitute isolated organizational procedures that can work on their own (teece et al. 1997). its effectiveness relies on the support and effectiveness of other processes


that are linked together to constitute the GaM routines. as such, this study examines whether information acquisition and global integration processes can help develop recon-figurationprocessesinglobalaccounts.

Intelligence Acquisition and Reconfiguration

information acquisition processes are major components of GaM (arnold et al. 2001b; shi et al. 2005). Gathering information from the global environment helps suppliers better understand the needs of their global customers and more closely track competitive moves, which will lead to faster and more effective organizational responses when needed (Day 1994; slater and Narver 1995).Asoneofthefirststepsintheorganizationalinformationprocessingfunction,acquiringinformationcanguidetheevolutionofafirm’sdynamiccapabilities,leadingtothedevelopmentofresourceandroutinereconfigurationtoaddressglobal market shifts.

First,firmsthatactivelyengageingatheringinformationfromtheglobalmarketaremore forward-looking (slater and Narver 1995). collecting information systematically fromvariousorganizationalstakeholdersenablesafirmtorecognizeashiftandanticipatechanges in the marketplace ahead of the competition. in particular, the information gath-eredfromtheenvironmentcanhelpthefirmadjustitsexpectationsoftheenvironmentand more accurately predict the nature of the opportunities and threats (cohen and lev-inthal 1990).Suchexpectationscouldguideitsreconfigurationeffortsinglobalaccountsand allow it to make proactive strategic choices when market conditions change (Day 1994).

second, collecting information, both formally and informally, from various organi-zational stakeholders can lead to an objective evaluation of the firm and its competi-tion (teece et al. 1997), providing an accurate assessment of its current position and futurepotentialinthecompetitiveenvironment.Thefirmispropelledtosearchbeyonditscurrentlearningtrajectoryandengageinnewknowledgegenerationandconfiguration(eisenhardt and Martin 2000; March 1991) to realize its full potential. in the context of global accounts, information acquisition from global customers and competitors allows afirmtoengageinopen-mindedinquiryandcriticallyevaluateitscurrentpositionsinthe global environment. this may lead to a new understanding of the current situation andencourageittoactivelyengageinreconfiguringorganizationalprocessesandexperi-menting with new alternatives to improve its competitive position in the global market. hence:

Hypothesis 3: Intelligence acquisition is positively associated with reconfiguration inglobal account management.

Global Integration and Reconfiguration

in GaM, the integration of worldwide activities includes integrating and leveraging knowledge, resources, and competitive moves across country markets. as a major com-ponent of dynamic capabilities, knowledge integration is the foundation for competitive advantage in a dynamic market (Grant 1996). as such, we posit here that global integra-


tioncanfacilitatethedevelopmentofreconfigurationprocessesandimprovetheireffec-tiveness in GaM for the following reasons.

First, the effectiveness of global integration determines the speed of a supplier’sresponse to marketplace shifts. the supplier can centrally coordinate and integrate global operationstoimprovetheefficiencyofservingglobalaccountcustomers.Byviewingtheworld as a single entity (Roth and Morrison 1990),supplierscanwieldcountry-specificcomparative advantages, such as lower labor costs or higher R&D capabilities, to quickly adapttoemergingcustomerdemands.Moreover,globalaccountexecutives’priorexperi-ences in different country markets facilitate the global integration processes (cohen and levinthal 1990) as multinational suppliers learn to assimilate and integrate new infor-mation into their existing knowledge base and develop new organizational solutions to competewithcompetitors’offerings(EisenhardtandMartin2000).

second, global integration enables a supplier to coordinate its global activities and leverage resources and skills across countrymarkets, paving theway for reconfigura-tion efforts to form a common ground for adjusting worldwide strategies and processes moreefficiently.Specifically, thesuppliercanmoveresources fromonemarket to theotherasneeded,therebyfacilitatingtheprocessofresourceandroutinereconfigurationin GaM. as noted by Zou and cavusgil (2002,p.42),“operationsindifferentcountriesareinterdependent,andafirmmustbeabletosubsidizeoperationsinsomemarketswithresources generated in others.” in the context here, the GaM units across major markets are linked interdependently to serve the global account customers. thus, by enhancing informationsharingandenablingresourceflowsamongtheunits,globalintegrationcanhelpasupplier leverage thebestpractices, technicalexpertise,andfinancial resourcesgenerated from onemarket to counterattack competitors’moves in another (Zou andcavusgil 2002). as a result, the supplier is able to use various resources from around the worldmoreefficientlyandreconfigurecountry-specificorglobaloperationsifnecessarytoachievehighercompetitiveadvantage.Thisleadstothefinalhypothesis:

Hypothesis 4: Globalintegrationispositivelyassociatedwithreconfigurationinglobalaccount management.

Methods

sampling Frame and Data collection

Data for this study were gathered using a cross-industry online survey of companies that are members of the strategic account Management association (saMa), a leading non-profitorganizationdevotedtodevelopingandpromotingtheconceptofcustomer-suppliercollaboration. Founded in 1964 and with more than 3,000 current members, saMa is theworld’slargestprofessionalassociationdedicatedtoservingstrategic/globalaccountmanagers. Many members are excellent global account executives sponsored by their companies to join the saMa conferences and training sessions to network with other executivesandgaincutting-edgeGAMknowledge.Theyoftenhavefirsthandinforma-tion about the industry practices and were therefore found suitable for this study. seventy-fivepercentofSAMA’smembershavejobtitlesofStrategic/GlobalAccountManager


and above (i.e. Director/Vice president of strategic accounts), and 81% of its member companies have sales revenues of over $ 1 billion. its membership list provides an excel-lentsourceforconductingourdatacollection.Aftertheinitialscreening,thefinalsam-pling frame comprised 1,093 saMa members involved in global account practices.

Twocriteriawereusedtoscreenqualifiedrespondents.First,theyhadtohavedirectexperience in managing one or more global account customers that do business with the supplierfirmonatleasttwocontinents.Second,duetotheresource-intensivenatureofglobal account programs, the respondents had to hold management or executive positions inthefirmthatoverseethestrategicdecision-makingandimplementationoftheglobalaccount programs (arnold et al. 2001a). Based on these two criteria and the membership listprovidedbySAMA,weidentifiedseveraltitlessuitableforthestudy:Strategic/Glo-bal account Manager, Director/Vice President of strategic accounts, and President or ceO if he or she is the sole correspondent in a company.

Data collection involved two phases. in the initial phase, saMa sent a cover letter and a link to the online questionnaire to the 1,093 members involved in global account prac-tices. the cover letter stated the purpose and contribution of the research, the sponsors, and the criteria of appropriate respondents. at the end of the survey, a summary report was promised if the respondents provided their email addresses or mailing addresses. since various terms are used for global account customers in practice (Workman et al. 2003),thesurveydirectionsspecificallyaskedrespondents,regardlessoftheirfirms’ownaccount labels, to focus on their most familiar global accounts, preferably choosing one with which they conducted business on at least two continents.

the second phase started 3 weeks after the initial mailing. to encourage responses, the cover letter and the online survey address were re-sent to all saMa members. the total number of responses received after the two mailings was 274. Of those, 71 surveys were droppedduetoincompletedata,leaving203completeresponsesinthefinalsampleforan effective response rate of 19%. considering the length of the survey, as well as the top-level management of the companies targeted, this effective response rate is comparable to those of other studies that have examined complex organizational phenomena (Workman et al. 2003).

Out of the final 203 responses, 65% of responding global accountmanagerswerelocated in North america, followed by 26% from Western europe. in terms of indus-tries, 38% represented service industries, 31% consumer packaged products, and 24% business-to-business manufacturing. approximately 58% of the companies have sales revenues over $ 1 billion and 66% of them had more than 3 years of experience in global account programs. about 64% of the respondents hold titles of Marketing Director and above.Aftercarefullyexaminingeachresponse,wewereconfidentthatalltherespond-entswerequalifiedtoanswerthesurvey.

to assess the non-response bias of the study, several key variables were compared across the two mailings, including the tenure of the GaM program, the percentage of sales revenue from the global account customer(s), the number of global account cus-tomers,and thesupplier’sannualsales revenues.Theresultsof t-testsshowed thatnosignificantdifferenceswerefoundforthevariablesofinterest.Therefore,itappearedthatnon-responsebiasdidnotposeasignificantproblemforthisstudy.


the harman one-factor test (Podsakoff and Organ 1986) was used to check for com-mon method bias. a principal component analysis of all the items included in the study wasperformed.Sincenodominantfactoremerged(thefirstfactorexplainsonly14.7%ofthe total variance), it was concluded that there was no evidence suggesting the presence of common method bias in the study.

Measurement

Due to the dearth of empirical research on GaM, scales of the constructs in this model were derived in a multi-stage process. First, researchers scanned the relevant literature onglobalization,strategy,marketing,andmanagementtolocateverifiedscaleitemswithwhich to measure the model constructs. this was followed by a review of recent sur-vey questionnaires used by saMa and personal interviews with the ceO, the education Director, and the Research Director from saMa, each of whom was very familiar with GaM managerial practices. scales from existing literature were adopted whenever pos-sible, and a few new scales were developed based on discussion and in-depth interviews with the global account managers. in addition, comments on the measurement and valid-ityofthesurveyitemswereelicitedfromfiveacademicsfamiliarwithglobalmarketingstrategyresearch.Basedontheirinput,thequestionnairewasrevisedandfinalizedforthe online survey. all items were measured on a seven-point likert scale ranging from “stronglydisagree”(1)to“stronglyagree”(7).Thescalesweremodifiedforthecontextof the study. table 2liststhemeasuresusedinthefinalstudy,thefactorloadings,andcomposite reliability. Descriptive statistics and correlations are presented in table 3.

as shown in table 2, intelligence acquisition is a second-order construct consisting of two dimensions of intelligence acquisition: customer and competitor. Both were meas-ured by a four-item scale, adapted from li and calantone (1998) and Narver and slater (1990),toassesstheactivitiesasuppliercanemploytocollectinformationoncustomers’needs and competitors’moves.Global integrationwasmeasured by a four-item scaleadapted from Zou and cavusgil (2002).Specifically,theitemswereusedtoassessthemechanisms a supplier can use to integrate its global operations across different country subsidiaries to support global account customers. Market dynamism was a four-item scale adapted from Germain et al. (1994) and Jaworski and Kohli (1993) to capture the key changes in the global marketplace, including production process changes, customer needs evolvement,productandservicechanges,andcompetitors’actions.

Themeasures of reconfigurationwere newly developed based on the definition ofreconfigurationproposedbyTeeceetal.(1997).Specifically,thisscaletapsthefivekeydimensions of reconfiguration to effectuate necessary changes ahead of competition:redeploying strategic resources, realigning organizational processes, modifying products orservices,adoptingbestpractices,andreconfiguringsystems.

GaM competitiveness was a four-item scale newly developed based on in-depth inter-views with global account managers. it captures the extent to which, by working with global accounts, a supplier can improve its strategic position, global market share, sales growth,andoverallprofitability.


Measures std.loading

t-Value

Customer intelligence acquisition(αc = 0.85, aVed = 0.59)We continuously acquire information from the global ac-count customer.

0.62 8.83

We regularly use multiple methods (e.g., sales calls, focus groups, and surveys) to gather information about the global account’sproducts,services,andstrategies.

0.73 11.09

Wefrequentlycollectinformationabouttheglobalaccount’soperations that are relevant to our business (e.g., purchasing, marketing, research & development).

0.93 –

We continuously review the likely effects of changes in business environment (e.g., regulation) that may affect our global account management practices.

0.75 11.38

Competitor intelligence acquisition(α=0.90,AVE=0.70)We continuously acquire information about our competitors.

0.90 19.16

Weregularlycollectinformationaboutourcompetitors’products, services, and strategies.

0.95 –

Ourtopmanagementconstantlydiscussesourcompetitors’strengths and weaknesses.

0.74 12.71

Our salespeople frequently share information concerning competitors’actionswithinourorganization.

0.73 12.60

Global integration(α=0.73,AVE=0.42)We have business operations with the global account customer in all the major markets where this global account does business.

0.54 6.19

Our local representative and country subsidiaries are re-warded to support the global account customer.

0.88 –

We often subsidize our competitive campaigns in a country using resources generated from other countries to serve our global account customer.

0.51 5.87

We do business with our global account customer in what-ever country the global account wants to do business.

0.59 5.65

Reconfiguration(α=0.88,AVE=0.60)We can redeploy the strategic resources serving the global account customer in global markets faster than our competi-tors can.

0.77 12.20

We can realign our organizational processes with respect to theglobalaccount’schangingneedsaheadofcompetition.

0.88 –

We can modify our products or services to accommodate the globalaccount’sneedsaheadofcompetition.

0.74 11.38

We can adopt best practices in the industry ahead of competition.

0.77 12.14

Table �:able �: construct measurement and validity assessment a, b


Reliability and Validity

WerefinedtheperceptualmeasuresandassessedtheirconstructvalidityinaccordancewithAnderson andGerbing’s (1988) recommendations.First,we ran exploratory fac-tor analyses for all constructs, resulting in the theoretically expected factor solutions. the reliability analyses also showed that these measures possessed satisfactory reliability coefficients.Next,asecond-orderconfirmatoryfactoranalysis(CFA)wascarriedouttoexaminethemodelfit.Themeasurementmodelincludingallconstructswasfittedbythe

Measures std.loading

t-Value

Wecanreconfigureoursystems(e.g.,informationsystems,financialsystems)asneededtoadapttochangesintheglo-bal environment ahead of competition.

0.71 10.68

GAM competitiveness(α=0.93,AVE=0.76)Working with this global account has:

…enhanced our strategic position in the global market. 0.77 13.62

…contributedsubstantiallytoourorganization’sglobalmarket share.

0.91 –

…contributedsubstantiallytoourorganization’soverallsales growth in the global market.

0.95 21.48

…contributedsubstantiallytoourorganization’soverallprofitabilityintheglobalmarket.

0.84 16.08

Market dynamism(α=0.85,AVE=0.58)Please indicate the frequency of change in your industry worldwide with respect to:Production (or service) technique/process changes 0.69 9.42

Customers’needs 0.72 9.82

Products/services 0.85 –

Competitors’strategiesandactions. 0.78 10.66

Second-order intelligence acquisition factor

customer intelligence 0.67 9.91

competitor intelligence 0.67 9.91

χ2 = 457.22 with degree of freedom (d.f.) = 267. cFi = 0.97; NNFi = 0.96; Bollen Fit index (iFi) = 0.97; Root Mean squared error of app. (RMsea) = 0.06a“–”indicatesafixedparameterball items were measured using a 7-point likert scale with 1 = strongly disagree and 7 = strongly agree except for market dynamism with 1 = never change and 7 = change very frequentlycalpha denotes composite reliabilitydaVe = average variance extracted

Table �: (continued)


elliptical reweighted least squares (eRls) procedure of the eQs program (Bentler 1995), sinceMardia’scoefficient for thepresentdataset as10.05washigher than thecut-offpoint of 1.96 (Byrne 1994), suggesting possible non-normality of the data. as the eRls procedure allows for non-normality by making minimum assumptions about the distribu-tion of the variables, it is generally recommended for analysis when data are not normal. Moreover, because it starts with the converged values obtained from the Maximum like-lihood (Ml) procedure, it outperforms the Ml for non-normal data and performs identi-cally to it for normal data (Bentler 1995; Bollen 1989; sharma et al. 1989).

the results of the measurement model are shown in table 2. the model provides an adequate fit (χ2 = 457.22 with degrees of freedom =267, comparative fit index[cFi] =0.97, incrementalfit index [IFI]= 0.97, and root mean square error of approxi-mation [RMsea] = 0.06), given the complex nature of the second-order cFa. all items loadedontheirrespectiveconstructsandwerestatisticallysignificant.Furthermore,thecomposite reliability for each construct exceeded the 0.70 benchmark, and all average variances extracted (aVe) were greater than 0.50. these measures demonstrate adequate convergent validity and reliability (Fornell and larcker 1981).

We then assessed the discriminant validity of the measures in two ways. First, we ran chi-square difference tests for all the constructs in pairs to determine whether the restrictedmodel(correlationfixedas1)wassignificantlyworsethanthefreelyestimatedmodel(correlationestimatedfreely).Allthechi-squaredifferenceswerehighlysignifi-cant (e.g., customer and competitor intelligence: ∆χ2 (1) = 120.42, p = 0.01), in support of discriminant validity (anderson and Gerbing, 1988). second, we calculated the shared variance between all possible pairs of constructs to determine whether they were lower than the aVe for the individual constructs. as shown in table 3, the square root of the aVe was greater than all corresponding correlations, in additional support of discrimi-nant validity (Fornell and larcker 1981). Overall, these results show that our measures possessed adequate reliability and validity.

in order to check for consistency across different countries, we conducted cross-group measurement and path equivalent tests in eQs by dividing the total sample size into two groups, North american and european (steenkamp and Baumgartner 1998). First, we

Table 3: Descriptive statistics and correlation matrix of major constructs

construct Mean sD 1 2 3 4 5 6

1. intelligence acquisition 5.12 1.04 0.67

2. Global integration 4.68 1.28 0.53** 0.65

3.Reconfiguration 4.58 1.17 0.59** 0.50** 0.78

4. GaM competitiveness 4.96 1.28 0.36** 0.40** 0.35** 0.87

5. Market dynamism 4.67 1.04 0.34** 0.10 0.13 0.29** 0.76

6. Firm size 3.8 1.82 0.19** 0.19** −0.01 0.04 0.07 –

N = 203; **p < 0.01Numbers in italic denote the square root of the average variance extracted


constrained all factor loadings to be equal across two groups. the measurement variance was not detected for the majority of the factor loadings. then we constrained the path to beequalacrossthetwogroups.Thechi-squaredifferenceswerenotsignificantforallthepaths being constrained, indicating nonequivalence was not detected in the path model. thus, the data were pooled in subsequent analysis.

Analysis and Results

Model estimation

in order to test the hypotheses, we estimated the following equations using a three-stage least-squares (3sls) analysis, in which RF =Reconfiguration,MD= Market Dynamism, ia = intelligence acquisition, Gi = Global integration, and size = Firm size. each con-struct is represented by its average scores.

Hypothesis 1: GaM competitiveness = (M1): α1 + β11Reconfiguration(RF)+ β12MD + β13 size

Hypothesis 2: (M2): + β14RF × MD + ε1.Hypothesises 3 & 4:Reconfiguration= (M3): α2 + β21ia + β22Gi + ε2.

Given the nature of the linkages between reconfiguration andGAM competitiveness,error terms across the equations could be correlated. as argued by Ramanathan (2002), common events that occur in any economy (e.g., changes in interest rates, money supply, political events, etc.) often affect the error terms in different equations in a similar way so that they are contemporaneously correlated. in the global account setting, changes inpoliticalandeconomicindicatorscouldaffectafirm’sGAMcompetitivenessanditsreconfiguration processes in similarways. In such situations, a 3SLS approach helpsaccount for correlations in the error terms across equations using generalized least squares (Gls) and instrumental variables to produce consistent estimates (Johnston 1997). Past research has used this method to test a system of equations simultaneously and provide efficientestimatesforcomplexstructuralmodelswithendogenousvariables(e.g.,Poppoand Zenger 2002; Wu et al. 2007).Inthisstudy,wefirstestimatedthemaineffectsofthemodels by simultaneously estimating M1 and M3 together using 3sls. then, the interac-tionbetweenreconfigurationandmarketdynamismwasincludedandthemodels(M2and M3) were re-estimated. the results are discussed below.

Results

Thefindingssuggestthatallthestructuralpathsweresupportedashypothesized.Inpartic-ular,reconfigurationwasfoundtohaveasignificantrelationshipwithGAMcompetitive-ness (β = 0.72, p < 0.05), thus supporting h1. Moreover, intelligence acquisition (β = 0.46, p < 0.05) and global integration (β = 0.29, p < 0.05) were positively associated with recon-figurationinGAM,meaningthatH3andH4werealsosupported(seeTable4).

Totesttheinteractionbetweenmarketdynamismandreconfiguration,themaineffectsof the predictor and the moderator were included, as well as the product term between


them. the results indicate that market dynamism positively moderated the relationship between reconfiguration andGAM competitiveness (β for the interaction term = 0.14, p < 0.01), thereby supporting h2 (see table 5). the results show strong support for the importanceofreconfigurationinahighlydynamicmarket.Inaddition,itwasfoundthatthemain effect of reconfiguration becomes insignificantwhen the interaction term is

Table 4: 3sls estimation results of the main effects model

Dependent variables independent variables

intelligence acquisition Global integration

R2 (adj. R2)

Reconfiguration 0.46** 0.29** 0.40 (0.39)

Reconfiguration Market dynamism

Firm size

GaMcompetitiveness system weighted R2: 0.38

0.72** 0.19** −0.09 0.19 (0.18)

**p < 0.05

Table 5: 3 sls estimation results with interaction effects

Dependent variables independent variables

intelligence acquisition

Global integration

R2 (adj. R2)

Reconfiguration 0.46** 0.28** 0.40 (0.39)

Reconfiguration(RF)

Market dynamism (MD)

Firm size RF × MD

GaMcompetitiveness system weighted R2: 0.46

0.01 −0.40** −0.02 0.14** 0.20 (0.19)

**p < 0.05

1

2

2

3

3

4

4

5

5

6

6

7

1 7

GA

M C

ompe

titiv

enes

s

Reconfiguration

Low MarketDynamismHigh MarketDynamism

Fig. �: interaction effects of market dynamism


included in themodel.This indicates that reconfiguration comes into play onlywhenmarket dynamism is high.

Dummy variable analysis was also used to further check the above effect; the data were divided into two groups, depending on the level of market dynamism, and the results sup-portedtheaboveobservation.Underhighmarketdynamism,theeffectofreconfigurationonGAMcompetitivenesswassignificantat1%level(β = 0.42, p = 0.00), whereas under lowmarketdynamism,theeffectwasnotsignificantlyassociatedwithGAMcompetitive-ness (β = 0.14, p =0.26).Thissupportsthestudy’sclaimthatreconfigurationisespeciallycritical for dealing with market dynamism. Figure 2 shows the interaction effects of mar-ketdynamismontherelationshipbetweenreconfigurationandGAMcompetitiveness.

Totestthemediatingeffectofreconfiguration,wefollowedtheproceduresuggestedby Baron and Kenny (1986). the results indicated that intelligence acquisition and global integrationwerepartiallymediatedby reconfiguration. Inparticular, thecoefficientofintelligence acquisition on GaM competitiveness was reduced from 0.36 to 0.24 when reconfigurationwastakenintoaccount.Similarly,thecoefficientofglobalintegrationonGaM competitiveness was reduced from 0.40 to 0.31 when the mediator was accounted for.Becausetheinfluenceof thesetwofactorsonGAMcompetitivenesswasstillsig-nificantwhenreconfigurationwastakenintoaccount,thereappearstohavebeenadirecteffect of intelligence acquisition and global integration on GaM performance.

Discussion

Building on dynamic capabilities approach, this study has offered a contingency view of global account management in a highly dynamic market. Based on a cross-country surveyofglobalaccountmanagersinadiversesetofindustries,thefindingssupportthenotionthatreconfigurationisindeedcrucialtoensuretheperformanceoutcomesofglo-bal account programs when market dynamism is high. it further suggests that intelligence acquisitionandglobalintegrationhelpfacilitatethereconfigurationprocessesinglobalaccounts. these results offer several implications for research and practice.

theoretical implications

First, the study extends the Dca into the global account setting and empirically supports thepivotalroleofreconfigurationprocessesinglobalaccountcompetitiveness.Thefind-ingsimplythatafirmisrequiredtodeveloporganizationalprocessestoquicklyrenewits knowledge stores and establish new resource and routine combinations in the global arenaandgeneratecompetitiveadvantageinhighlydynamicmarkets.Moreover,thefind-ings provide strong support for identifying the three organizational processes of informa-tionacquisition,globalintegration,andreconfigurationasthefoundationsofGAM.Suchconceptualizationisconsistentwiththenotionthatafirm’sdynamiccapabilitieslieintheidentifiablefirm-specificprocessesthatcanprovidecompetitiveadvantageinresponsetochanging environments (eisenhardt and Martin 2000; teece et al. 1997). it is also con-sistentwiththeknowledge-basedviewofthefirmthatdynamiccapabilitiesarelearnedorganizational skills over time and is guided by the evolution of the learning mechanisms


(Zollo and Winter 2002). Inorder tomanageglobal accountsmoreeffectively, afirmneeds to develop the ability to process the vast amount of new information in the global environment, assimilate it into its existing knowledge base, and create new knowledge/solutions to survive in an ever more competitive market.

Second,thisstudyisoneofthefirsttoprovideacontingencyviewofglobalaccountcompetitiveness by empirically examining the contingent role of market dynamism. the findingsfromthecross-country/cross-industrydatarevealthatglobalaccountcompeti-tiveness depends on the level of global market dynamism (eisenhardt and Martin 2000). Specifically,theseresultsshowthatunderhighmarketdynamism,reconfigurationproc-esses are critical to achieving competitiveness in the global arena, but do not seem to play amajorroleforGAMcompetitivenesswhenmarketdynamismislow.Thisfindingispar-ticularly interesting given the recent debate on organizational ambidexterity, which calls for the co-evolution of exploitation on existing knowledge and the exploration of new alternatives to deal with different levels of environmental uncertainty (March 1991; tush-manandO’Reilly1996).Ourfindingssupporttheideathatreplicationandrefinementofexistingknowledgestoresmaybemoreefficientindealingwithpredicablechangesintheglobalmarkets,whilereconfigurationoforganizationalresourcesandroutinesseemsto matter more for the creation of new alternatives to address the high-velocity markets (eisenhardt and Martin 2000; teece et al. 1997).Thefindingsalsocallforfutureresearchto emphasize the boundary conditions of dynamic capabilities in the global marketplace. Thatis,thespecificorganizationalprocessesthatconstituteafirm’sdynamiccapabilitiesmay have different development paths under different environmental contexts (eisen-hardt and Martin 2000).

third, this study provides empirical evidence for the interplay of the three organiza-tional processes in GaM and suggests that information acquisition and global integra-tioncanfacilitateafirm’sreconfigurationprocesses.Therelationshipofthethreeoffersdeeper insights into understanding dynamic capabilities as interrelated firm-specificprocessesratherthanasanaggregateconstruct.Specifically,acquiringintelligencefromglobalcustomersandcompetitorsprovidesthefoundationforafirmtobetteranticipatemarket changes and rapidly respond to competitor moves (Narver and slater 1990). and the integration of global operations allows it to coordinate and leverage its resources across different country markets. these two processes can provide the necessary condi-tionsforafirmattemptingtoreconfigureglobalresourcesandroutinestoachievethefullpotential of value creation (teece et al. 1997). Moreover, the interrelatedness of the three organizational processes in GaM also reveals that they may have recursive relationships betweeneachotherwherereconfigurationmayalsoleadtohigherinformationacquisitionand global integration in GaM. Future research should examine the potential recursive relationships among the three GaM processes.

in addition, the effects of information acquisition and global integration on GaM com-petitivenesswerefoundtobepartiallymediatedbyreconfiguration.Thissuggeststhatinformation acquisition and global integration have both direct and indirect effects on a firm’scompetitivenessinglobalaccounts.Reconfigurationservesasacatalystintrans-forming these two processes into competitive assets that can provide higher value for a firm.


Managerial implications

Ourfindingshave several implications formanagingglobal accounts.First,managersshouldhighlighttheimportanceofreconfigurationprocessestoachieveglobalaccountcompetitiveness in a highly dynamic market. this is particularly insightful given the speed of global expansion in the emerging economies, which is characterized by high market velocity due to frequent regulation changes, emerging local competitors, and underde-velopedlegalsystems.Thefindingsofferguidancefordevelopingsimpleorganizationalprocessestoallowmaximumflexibilityinreconfigurationandtofocusonthecreationofnewknowledgewhenmarketdynamismishigh.Specifically,globalaccountmanagersshouldworkondevelopingflexibilityinorganizationalprocesses,marketdefinitions,andproduct offerings in order to work together with their global customers. they should also strivetopracticeresourceandroutinereconfigurationsfrequently,wheneverpossible,sothat they are able to acquire such skills through learning. this can create a healthy organi-zational environment that assists in renewing and adapting organizational competence in the face of abrupt changes, thereby overcoming the adverse effect of market volatility (eisenhardt and Martin 2000).

Second, the studypresentsguidelines formanagers to facilitate the reconfigurationprocesses in GAM programs. Specifically, multinational suppliers should implementadvanced it systems (such as intranet for GaM) for gathering customer information, monitoringcompetitors’moves,andsharingbestpracticesacrosstheglobeamongglo-balaccountmanagers.Inaddition,managersneedtodeveloptheirskillsinfilteringthevast amounts of information, facilitating communication between global customers and the supplierfirm, andprovidingdirections for the reconfigurationprocesses inGAM.Itisalsoimportantforglobalsupplierfirmstocultivateaviewoftreatingtheworldasa single entity and develop a centralized system to coordinate resources and integrate competitive campaigns across country markets. this can help a supplier to better use its country-specificadvantagesandleverageitsresourcesacrosstheglobetoachievemaxi-mumefficiency.

Finally, managers need to realize there are various ways to achieve global account competitiveness. since such competitiveness varies according to environmental condi-tions, it is crucial to try alternative routes to achieve better performance. Developing specificorganizationalprocessesliesattheheartofsuccessfulGAM.Thefindingsheresuggest that intelligence acquisition, global integration, and reconfiguration processescan lead to better global account performance through different mechanisms. While intel-ligence acquisition can envision changes by being forward-looking, global integration can energize changes by coordinating global resources. together, these provide the foun-dation for reconfigurationprocesses toenable thechanges in theglobal accounts.Forexample, to improve competitiveness, a supplier can implement an interactive global customer support program that can gather and process customer feedback from around the world. it can also work on distributing new strategic initiatives through an integrated customer-supplierresponsesystem.Thesetwoinitiativesmayencouragereconfigurationwithin the global accounts in order to assimilate the new information and better respond to market changes. in short, GaM managers need to improve all three processes together


inordertoachievehigherglobalaccountefficiencyandensuresuperiororganizationalperformance.

limitations and Future Research

this study has several limitations that can open up avenues for future research. First, the data were based on self-reported survey responses from a single informant within eachsupplierfirm.AlthoughHarmon’sone-factorapproachdemonstratedthatcommonmethod bias did not pose serious problems in the study, the results should be interpreted with caution. Future research could attempt to adopt a research design that collects data frommultiplesourcestoimproveconfidenceinthefindings.Second,thestudyexaminedthe role of market dynamism, one of the contingent factors that can affect global account performance. Future research can consider a broader set of contingent factors, such as culturedistance,andexaminehowtheyaffectthelinkbetweenreconfigurationandglobalaccount performance.

third, the study was conducted from the perspective of suppliers. Future studies should expand the perspective by using dyadic data collected from both suppliers and customers in order to have a more complete view of GaM. Fourth, the operationalization of our con-structs can also be improved. For example, future studies should consider utilizing objec-tive measures of GaM competitiveness such as ROa and ROi to have a more complete view of GaM performance. Finally, the data were cross-sectional in nature, which means thatonlya“snapshot”ofcompanies’GAMprogramswasobtained.Longitudinaldatawould help us understand how GaM capabilities evolve over time. Perhaps more impor-tantly, longitudinal data would provide the means to more accurately assess the dynamic nature of GaM capabilities by tracking the organizational processes over time.

Acknowledgements: the authors thank the editor and the two anonymous reviewers for their insightful and constructive comments on earlier versions of the paper. We also thank s. tamer cavusgil, anthony Goerzen and shaoming Zou for their helpful comments.

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