This study investigates the sociopolitical processes underlying the development and approval of marketing budgets in large multinational corporations. While prior research has focused extensively on optimizing the level and allocation of marketing budgets, little attention has been paid to the internal organizational dynamics that shape the marketing budgeting process. Drawing on the theories-in-use of both CMOs and CEOs, this study examines how these executives co-develop a calibrated marketing budget (CMKB) - a budget that aligns expected performance with allocated resources through an iterative, participative process. Field data show that CMOs deploy a set of signals to assuage CEO concerns related to goal conflict and information asymmetry. These signals reflect both the quality (e.g., granularity, opportunity elaboration, threat mitigation) and intentions (e.g., cultivated endorsements, relinquishment) of the CMO’s budget. In addition, the study delineates between two types of CMKBs, a Growth Focused CMKB and a Constrained CMKB, and demonstrates that the effectiveness of the quality and intent signals used by CMOs varies across them. Taken together, this study seeks to provide a theoretical foundation for advancing research on the marketing budgeting processes in organizations.
Jiang et al. (Fri,) studied this question.