2019 Volume 3 Issue 1 Pages 1-10
This study explores the role of standardization and coordination in the management of corporate websites. For this purpose, it empirically confirms the impact of standardization on website management by exploring the role of coordination in corporate website management in terms of global marketing. Through a survey of the corporate website management practices of Japanese international firms, we empirically test a modified version of the global marketing strategy (GMS) model. That is, companies’ internal organizational characteristics lead to the standardization of their websites which, in turn, has a positive effect on their marketing communication, which is intermediated by coordination activities. Further, this marketing communication effect has a positive influence on companies’ business growth. The results show the role of standardization as a precondition for the coordination of global website management; that is, the standardization of a corporate website has an incubator effect on the global coordination of website communication.
Since the advent of the Internet, the barriers to global communication have decreased. While the launching of a website provides companies with the opportunity to communicate directly with people around the world, the localization of marketing communication continues to be crucial. To effectively target overseas customers, companies should build a website in the respective country’s language and adapt it to the cultural value systems (Harrison-Walker, 2002). According to a comparative study on companies in the United States, India, China, and Japan, differences reflecting the cultural values of each country were observed on the websites of each company (Singh, Zhao, & Hu, 2005). By contrast, in a comparative study of consumers from 23 countries, each with different cultures, consumers perceived the value of the website differently (Steenkamp & Geyskens, 2006).
In summary, one could say that while websites provide companies with new frontiers and possibilities to enhance their global marketing communications, one of the main challenges is to balance corporate needs for standardization with market-driven preferences for adaptation of corporate websites. This study empirically confirms the impact of standardization on corporate website management in the context of the global marketing strategy (GMS) model.
Our analytical framework is based on the GMS model of Zou and Cavusgil (1995, 2002). This model has been built to utilize the advantages of global marketing strategies (Baba, 2004). In the GMS, standardization is the degree to which a company applies common marketing activities across countries, while coordination refers to the extent to which a company’s marketing activities in different countries are planned and executed interdependently on a global scale (Zou & Cavusgil, 1995, 2002). According to the GMS a company should attempt to introduce a common marketing mix, integrate initiatives, and foster coordination, instead of developing a diverse marketing mix to adapt to the local market in each country. In this way, the firm can reduce overlapping activities and encourage the worldwide transfer of knowledge. Such efforts create a scale advantage, improve the time to market, and enhance the international consistency of a company’s image.
Whereas Levitt (1983) identifies the benefits of global marketing, others have pointed out many obstacles for standardizing and coordinating marketing strategies worldwide, such as the enormous variety in languages, cultures, natural environments, social infrastructure, and legal systems in international markets (Douglas & Wind, 1987; Porter, 1986; Viswanathan & Dickson, 2007). A desirable GMS should be contingent on the differences in external market and internal organizational characteristics. Referring to both industrial organization- and resource-based theories, Zou and Cavusgil (1995) adopt the contingency perspective. They argue that a global strategy represents an organization’s response to external industry globalization drivers and is constrained by the internal organizational characteristics that affect the organization’s ability to conceive and implement its global strategy. These external market and internal organizational characteristics are diverse and vary depending on the industry, product, and service. Therefore, the extent of global product standardization differs according to product areas (Ohmae, 1985). When these external and internal characteristics are dissimilar, the effect of standardization of marketing activities on the strategic and financial performance of a company should also differ (Schilke, Reimann, & Thomas, 2009). In other words, the implementation of the standardization and coordination of a GMS should be considered limited to cases wherein standardization and coordination are compatible with both external market and internal organizational characteristics (Zou & Cavusgil, 1995).
Zou and Cavusgil’s (2002) GMS model (Figure 1) is based on previous studies on GMS. Their model states that if standardization and coordination are compatible with a company’s external market and internal organizational characteristics, the degrees of standardization and coordination become enhanced in the company’s GMS. This enhancement has a positive effect on the company’s strategic and financial performance. The model is supported by an analysis using data from a survey of global manufacturing industries in the United States.
GMS model by Zou and Cavusgil (2002).
The GMS model has also been adapted to individual marketing activities. For instance, Townsend, Yeniyurt, Deligonul, and Cavusgil (2004) apply the GMS model to product areas. The model in Figure 2 is constructed based on the GMS model in Figure 1. This model assumes that both the global product standardization and unification of the global marketing structure will improve with the implementation of a company’s global strategy that matches the company’s external and internal conditions. Both the global product standardization and unification of the global marketing structure have a positive effect on marketing and financial performance through the unification of global product processes. Except for the relationship between global product processes and marketing performance, the model is supported by an analysis that uses data from a survey of multinational companies in the United States.
In a subsequent study, Okazaki, Taylor, and Zou (2006) apply the GMS model to marketing communication (Figure 3). Their model predicts that a company is more likely to use a more standardized advertising strategy if its external and internal conditions are suitable. Such an advertising strategy will also have a positive influence on the company’s advertising effectiveness and, thus, on both strategic and financial performance. Their model is supported by the results of a survey conducted among Japanese and U.S. multinational corporations operating in the European Union.
The remaining issues of the GMS model are as follows. First, it has not been verified empirically whether the GMS model is practical for analyzing the global management of corporate websites. In the context of global marketing communication, Zou and Volz (2010) note the current literature’s narrow focus on advertising content. It is thus necessary to investigate multinational corporate website management as a key component for a global marketing communication strategy.
Second, empirical studies that use the GMS do not consider the mutual influence of the individual variables that together form the standardization and coordination constructs. These two constructs, which Zou and Cavusgil (2002), Townsend et al. (2004), and Okazaki et al. (2006) substantiate, are treated as one combined variable. In addition, Schilke et al. (2009) demonstrate that the influence of standardization on business performance is moderated by coordination. This implies there may be some correlation between standardization and coordination. Incorporating this finding into GMS, we can posit that coordination might enable a corporate website to leverage its standardization.
Third, prior studies (Okazaki et al., 2006; Townsend et al., 2004; Zou & Cavusgil, 2002) point out that both independent and dependent variables are acquired from a survey administered to the same respondents, meaning we cannot rule out the possibility of self-report bias. The remaining issue is thus the validation of the GMS model using multiple data sources.
As previously mentioned, the purpose of our study is to empirically explore the effects of standardization, coordination, and business performance on the global management of corporate websites. Okazaki et al. (2006) provide empirical support for the GMS model in marketing communication. Based on their study, we propose a theoretical model of a corporate website in Figure 4. According to the GMS model, we predict that the global corporate website strategy will be an organization’s response to external market and internal organizational characteristics. These characteristics can affect the level of global corporate website standardization, which enhances the coordination of activities in global corporate website management for improving the effectiveness of marketing communication and business performance.
Proposed model.
Website standardization is represented by the uniformity of format and content in the global management of corporate websites. Previous studies on GMS propose that external and internal characteristics affect the level of standardization in marketing activities (Okazaki et al., 2006; Townsend et al., 2004; Zou & Cavusgil, 2002). We predict that companies decide their strategies in response to the environment. Companies facing a highly homogeneous and highly competitive environment are likely to adopt a standardized strategy.
The first external market characteristic is market similarity. The homogeneity of customers and competitors across markets makes it easy for companies to conduct the global standardization of their websites. The second external market characteristic is the competition level. Under fierce competition, companies need to increase the frequency of major changes being made to the website while building a consistent global image to gain competitive advantage. The level of competition thus influences the need to adopt standardization for a corporate website worldwide.
3.2 Internal organizational characteristicsH1: When global market similarity increases, the global standardization of a corporate website increases.
H2: When the level of global competition increases, the global standardization of corporate a website increases.
Another concept that affects website standardization are the company’s internal organizational characteristics. The first is the firm’s cost sensitivity. A firm’s pursuit of cost savings is likely to lead to standardization of its corporate website. The second internal organizational characteristic is the firm’s global strategic orientation. Integrated marketing communications (IMC) represent a marketing communication policy that stresses the effect of brand image consistency. The firm’s orientation toward global IMC also would appear to influence the level of global standardization of the corporate website.
3.3 CoordinationH3: When the pursuit of cost savings in global marketing communication is strengthened within a company, the global standardization of its corporate website increases.
H4: When the pursuit of global IMC is strengthened within a company, the global standardization of its corporate website increases.
Under GMS, coordination is defined as the extent to which a firm’s activities in different countries are planned and executed interdependently on a global scale (Zou & Cavusgil, 1995, 2002). In this study, we focus on a firm’s activities regarding corporate websites in different countries. Overall, it is easier to transfer and utilize the knowledge gained from the firm’s activities in each of its country markets through the standardization of corporate websites.
Prior studies on GMS have not demonstrated the interrelationship between standardization and coordination. However, we posit that global standardization of a corporate website has a positive effect on establishing coordination in website operation and development in different countries. This is because we assume that knowledge transfer becomes easier when utilizing a standardized format and execution. If a corporate website shares a basic appearance, major services, and fundamental structures across country markets, it will be easier for a country’s subsidiary to utilize the knowledge gained from the operation and development in other countries. Therefore, an increase in the global standardization of a corporate website will facilitate the transfer of knowledge related to website development and operation to improve worldwide coordination.
3.4 Communication effect and business performanceH5: When the global standardization of a corporate website increases, its coordination becomes more active.
The increase in website coordination activities should also have a positive effect on a company’s business growth through global marketing communication, as it improves idea generation, reduces cost and time to market, and improves the worldwide consistency of the company’s image (Okazaki et al., 2006; Townsend et al., 2004; Zou & Cavusgil, 2002).
On the other hand, the standardization of global marketing communication is said to advance cost reduction and the formation of a globally unified brand image. However, for corporate websites, unlike television advertisements, billboards, and shops, viewers traveling across borders rarely access sites other than those dedicated to their own countries. It cannot be expected that unifying corporate websites worldwide will have a direct effect on global brand image. Therefore, standardizing corporate websites worldwide in terms of communication may have an indirect effect on the company through coordination and unification of the global brand image, which in turn should contribute to business growth.
H6: When global coordination of a corporate website increases, the global marketing communication effect increases.
H7: When a company’s global marketing communication effect increases, global business growth increases.
Table 1 lists the seven independent and mediator variables used in this study. All variables were measured using a five-point Likert scale. This study mainly adopted the items used by Okazaki et al. (2006), who apply the GMS model to the marketing communication field. However, they did not distinguish between the two constructs of standardization and coordination in their model. Therefore, we referred to the relevant items used by Zou and Cavusgil (2002) for these two constructs. Table 3 provides the details for each item. The dependent variables were measured using the sales growth rate, obtained from the financial data of each company.
| Construct Name | Items | Reference |
|---|---|---|
| Standardization | 3 items | Zou and Cavusgil (2002) |
| Coordination | 3 items | Zou and Cavusgil (2002) |
| Market Similarity | 3 items | Okazaki et al. (2006) |
| Level of Competition | 3 items | Okazaki et al. (2006) |
| Cost Saving | 3 items | Okazaki et al. (2006) |
| Global IMC | 3 items | Okazaki et al. (2006) |
| Communication Effect | 3 items | Okazaki et al. (2006) |
We distributed questionnaires to the public relations (PR) departments and international operations offices of 1,025 Japanese listed companies featured in the spring 2011 edition of the Kaisha Shikiho (CD-ROM version, published by Toyo Keizai, Inc.) that fit the following criteria. The companies reported 10% or more of their total sales as foreign sales, offering websites in at least two languages (i.e., Japanese and another). These companies should face problems regarding standardization and coordination in their websites’ management. We received 110 completed questionnaires (response rate 10.7%). The respondents returned their questionnaires by post between March 3, 2012, and April 10, 2012. Since there were no major issues in any of the completed questionnaires, we accepted all responses for analysis.
Of the companies that completed the questionnaire, there were no instances of questionnaires completed by both the PR department and international operations office of the same company. Table 2 shows an industry breakdown of the surveyed companies. To ensure our sample is free from bias, we performed a Chi-square test, comparing the number of companies that received questionnaires with the number of companies that completed them by industry. No significant differences were found (p > 0.1).
| Industry | Number of Companies | % |
|---|---|---|
| Manufacturing—Textiles, Glass, Rubber and Paper | 6 | 5.5% |
| Manufacturing—Pharmaceutical and Chemical | 12 | 10.9% |
| Manufacturing—Electrical Equipment | 20 | 18.2% |
| Manufacturing—Machinery and Precision Instruments | 22 | 20.0% |
| Manufacturing—Transportation Equipment | 10 | 9.1% |
| Manufacturing—Steels and Other Metals | 9 | 8.2% |
| Manufacturing—Construction | 5 | 4.5% |
| Manufacturing—Other Manufacturing | 11 | 10.0% |
| Manufacturing Total | 95 | 86.4% |
| Service Industry—Wholesale and Retail Trade | 9 | 8.2% |
| Service Industry—Finance and Insurance | 1 | 0.9% |
| Service Industry—Land, Sea, Air Transportation and Warehousing | 3 | 2.7% |
| Service Industry—Information and Communication | 0 | 0.0% |
| Service Industry—Other Services | 1 | 0.9% |
| Service Industry Total | 14 | 12.7% |
| No Response | 1 | 0.9% |
| Total | 110 | 100.0% |
After more than a year since the collection of the questionnaires, the financial data of the 110 companies that had completed the questionnaire were collected from the fall 2013 edition of the Kaisha Shikiho (CD-ROM version, published by Toyo Keizai, Inc.) for the dependent variables. This study adopts a multiple sources approach to reduce self-report bias. Of the 110 companies, financial data could not be obtained for four companies because they had been delisted at that time; the remaining 106 companies that had the requisite financial data were used in the following analysis. The one-year sales growth rates during the fiscal year from July 2012 to June 2013 were collected. Additionally, data obtained from the questionnaire regarding sales volume and the business-to-consumer (B-to-C) sales ratio of each company were used as control variables.
Table 3 shows the mean and standard variation for the responses to each question. There were no major problems in terms of ceiling or floor effects. We used Cronbach’s alpha to test data reliability, and the coefficients for all constructs were confirmed to be 0.7 or higher.
| Construct Name | Items | Average Value | Standard Deviation | Reliability α |
|---|---|---|---|---|
| Standardization | Our company is using a website with a unified appearance and operational feel (i.e., look and feel) in the market of each country where it operates. | 2.76 | 1.53 | 0.87 |
| The main features and services of the website for our company are standardized in the market of each country where it operates. | 2.43 | 1.31 | ||
| Our company has a similar site construct available in each country. | 3.02 | 1.55 | ||
| Coordination | Our company develops the appearance and operating feel of the website for each country by coordinating and cooperating with the bases in different countries. | 2.30 | 1.38 | 0.83 |
| Our company develops the content of websites destined for various countries by coordinating and cooperating with the bases in those countries. | 2.54 | 1.38 | ||
| Our company responds to and deals with customers through the websites of each country by coordinating and cooperating with the bases in those countries. | 2.50 | 1.38 | ||
| Market Similarity | There are similar levels of economic development in the countries where our company is operating. | 2.38 | 0.98 | 0.71 |
| There are similar levels of education and literacy rates in the countries where our company is operating. | 2.54 | 1.01 | ||
| The main business of our company is facing a similar type of competition in the market of each country. | 3.06 | 0.96 | ||
| Level of Competition | Strong competitor companies are present in each country where our company is operating. | 4.22 | 0.72 | 0.70 |
| Market competition is intense in each country where our company is operating. | 4.20 | 0.76 | ||
| Many competitive companies with the same capabilities are crowding the market in each country where our company is operating. | 3.93 | 0.85 | ||
| Cost Saving | Our company would like to reduce costs in each country where its main business is developing by adopting identical promotions and sales activities. | 3.07 | 0.88 | 0.85 |
| Our company believes that it is possible to improve cost efficiency by standardizing promotions and sales activities in each country. | 2.99 | 1.00 | ||
| Our company believes that it is possible to reduce global advertising article costs by adopting a standardized campaign. | 2.80 | 1.01 | ||
| Global IMC | Our company is working predominantly on the integration of marketing communication activities (IMC). | 2.48 | 1.00 | 0.76 |
| Our company is planning to respond to the advancement of communication technology by adopting an identical marketing communication strategy across borders. | 2.37 | 1.00 | ||
| Through cooperation with an advertising agency with a global network, our company has won a competitive advantage. | 1.89 | 0.85 | ||
| Communication Effect | Our company has accomplished internationally the unified image formation of our own brands. | 3.06 | 0.92 | 0.82 |
| Our company has successfully formed and strengthened the global image of our own brand. | 2.83 | 0.94 | ||
| Our global marketing communication activities contribute to achieving company objectives. | 2.94 | 0.97 |
Next, we performed confirmatory factor analysis for the seven constructs (Table 1) within our model (Figure 5) and calculated the fit index (χ2 = −208.091, df = 168, p = .019, goodness-of-fit index [GFI] = .859, comparative fit index [CFI] = .957, incremental fit index [IFI] = .959, root mean square error of approximation [RMSEA] = .048). There were no problems with the RMSEA or CFI. However, the GFI was inadequate. We attributed this result to the small sample size. The IFI, which is thought to be independent of sample size, was found to be acceptable. Some researchers argue that the GFI is not an accurate method of determining construct validity and should not be used as a fit index (Hosino, Okada, & Maeda, 2005, pp. 214–215; Hu & Bentler, 1998, pp. 448–449). We thus concluded that the GFI value does not indicate a poor model fit in this case.
Proposed model and analysis results. *p < 0.05, **p < 0.01
For the convergent validity test, we tested all factor loadings, which were significant at 0.5 or higher. Finally, we tested for discriminant validity and calculated the average variance extracted (AVE) and composite reliability (CR). The AVE values for market similarity and level of competition were slightly below 0.5 (Bagozzi & Yi, 1988, p. 82; Fornell & Larcker, 1981, pp. 45–46). A similar trend was also observed in the study of Okazaki et al. (2006), which suggests that this issue may be common to studies based on the GMS model. Moreover, this limitation should not affect the conclusions of this study, as described below.
| Construct | 1 | 2 | 3 | 4 | 5 | 6 | AVE | CR |
|---|---|---|---|---|---|---|---|---|
| 1. Standardization | 0.71 | 0.88 | ||||||
| 2. Coordination | 0.64 | 0.64 | 0.84 | |||||
| 3. Market Similarity | 0.12 | 0.05 | 0.48 | 0.72 | ||||
| 4. Level of Competition | −0.01 | 0.08 | −0.08 | 0.47 | 0.72 | |||
| 5. Cost Saving | 0.45 | 0.21 | 0.21 | −0.05 | 0.67 | 0.86 | ||
| 6. Global IMC | 0.53 | 0.38 | 0.14 | −0.04 | 0.60 | 0.53 | 0.77 | |
| 7. Communication Effect | 0.34 | 0.48 | −0.10 | −0.03 | 0.06 | 0.32 | 0.61 | 0.83 |
The subsequent path analysis confirmed that the fit of our model was adequate for analysis. This model includes sales volume, B-to-C ratio, and covariance between global IMC and the strategic cost reduction of global marketing communication, as control variables. As in the construct validity analysis in the previous section, the GFI value was low. Nevertheless, the overall results support the validity of the model (χ2 = −314.604, df = 245, p = .002, GFI = .812, CFI = .928, RMSEA = .052, IFI = .930).
Then, we analyzed the relationships between constructs to test hypotheses 1–7. A positive relationship at the 1% significance level was found between the following constructs: global IMC and standardization, standardization and coordination, and coordination and communication effect. The positive relationships between the communication effect and business growth were significant at the 5% level. Therefore, H4–H7 were accepted, whereas H1–H3 were not.
Additionally, we also confirmed that the direct path from standardization to communication effects in our model was not supported by our data (χ2 = 314.456, df = 244, p = .002, GFI = .812, CFI = .927, RMSEA = .052, IFI = .929).
The purpose of this study was to empirically investigate corporate website management from the perspective of global marketing strategy. Although this is an exploratory research, it reveals some insightful findings. The corporate website is one component of a total marketing strategy. Further, standardization becomes a determinant of coordination. Our data suggest that in the international development of corporate websites, coordination increases the effectiveness of global marketing communications and that standardization becomes a determinant of coordination.
Among its academic contributions, this study first shows empirically that the GMS model can be applied to the global management of corporate websites. When the global management of a corporate website is compatible with internal organizational characteristics, website standardization enhances the company’s business performance through coordination and communication.
Second, this study explores the relationship between standardization and coordination, which has not been hitherto confirmed in the demonstration of GMS models. For the management of a global corporate website, the relationship between standardization and marketing communication is mediated by the coordination of the website. This suggests standardization is a precondition of coordination. By standardizing the marketing format and execution decisions, the dynamics of information exchange are likely to increase in the organization.
This study also has managerial implications. Companies that utilize a GMS sometimes face heterogeneity in external market characteristics. However, this study shows that a global website strategy is prompted by internal organizational characteristics. In other words, in the global management of a website, a company’s internal intention, which addresses its strategic efforts to standardize the website, ultimately increases coordination.
Additionally, this study shows that the standardization of a corporate website indirectly leads to business growth by facilitating marketing communication, as mediated by global coordination. It thus seems that knowledge transfer may be carried out in a standardized format and that this in turn also leads to a standardized format and execution of the corporate website. This indirect effect should be considered when a company aims for the effective standardization of its global website. Enhanced website standardization can thus support coordination, such as through the transfer of knowledge among subsidiaries in different countries.
6.2 LimitationsFinally, this study has some limitations. In our empirical analysis, the GFI and AVE of the proposed model were slightly less than adequate. As this limitation seems to arise from the small sample size, we might need to include the additional control variables that have been suggested in previous global marketing studies (Kotabe & Jiang, 2009).
Unlike previous studies, such as those of Zou and Cavusgil (2002), Townsend et al. (2004), and Okazaki et al. (2006), the influence of external market characteristics on the standardization level was not confirmed. This dissimilarity seems to suggest that the global management of corporate websites is different from the global management of strategies, products, or advertising. Since the corporate website is an element of marketing communication, its global management could be influenced more by internal organization characteristics, especially global IMC, rather than by external market characteristics. However, it is also possible that this result may be due to the small number of observations or the inadequate questions used for measuring the GMS construct. Further research is needed to address these problems.
Additionally, this study examines only the website management of Japanese companies. We encourage researchers to further test our model using a cross-national company sample and in a marketing context other than that of corporate websites.
Finally, the appropriateness of this study depends on the validity of the categorization as ‘global’ of Japanese companies that generate more than 10% percent of their total sales abroad. While this criterion may be sufficient to categorize the companies in question as international or as internationalizing companies, whether a ‘foreign sales of more than 10 percent of total sales’ criterion is sufficient to categorize them as ‘global’ companies needs to be validated by future research.
The authors thank the editors and anonymous IJMD reviewers for their constructive feedback and suggestions during the review process. This study was supported by JSPS KAKENHI Grant Number 2233019.
