A Twenty‐First Century Guide to Aldersonian Marketing Thought

Citation

Fisk, G. (2007), "A Twenty‐First Century Guide to Aldersonian Marketing Thought", European Business Review, Vol. 19 No. 6, pp. 529-535. https://doi.org/10.1108/09555340710830154

Wroe Alderson chose a management consulting career path but his destiny was to be remembered as the outstanding marketing theorist of the twentieth century. Not surprisingly this celebration of Alderson's contributions to marketing theory is intended to acknowledge the debt the marketing world owes to his concepts, theories and methods. His professional and social concerns are also reviewed through the eyes of colleagues and long time professional associates.

This review examines Alderson's contributions to marketing theory, the interdisciplinary knowledge transfers he introduced into the study of marketing and the social and religious values reported to have guided his path during a distinguished career. In this review reference to the Twenty‐first Century Guide to Aldersonian Marketing Thought will be abbreviated as Guide.

Four of Alderson's innovations could be useful in any scientific discipline facing the problem of securing multidisciplinary transfer of skills or data. As several chapters in this book demonstrate these include:

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  Developing social networks through which knowledge can be acquired and transmitted.

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  Securing network collaboration from professionals in cognate disciplines to transfer acquired.

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  Knowledge across discipline boundaries.

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  Developing media specifically designed to disseminate marketing theory.

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  Creating new marketing theory based on collaborative effort in order to accelerate diffusion of information through media appropriate for disseminating theory.

By combining these elements Alderson created a method for securing multidisciplinary cooperation, using knowledge existing in one discipline to explore issues in another. Now, in 2007 scientific journals across the physical and biological sciences are considering this problem. Alderson and his colleague Reavis Cox addressed the question of trans‐disciplinary knowledge transfer in 1948 and Alderson developed a workable resolution during the 1950s and 1960s in ways described in the Guide.

Alderson may not have planned these efforts to fit together but together they yielded great synergy.

Readers can connect the dots between these developments by following Alderson's role as an academic entrepreneur as described in Chapter 34 by Stanley J. Shapiro. His innovativeness is elsewhere illustrated in Chapter 1 on “Wroe Alderson a life” Chapter18 “Alderson, sessions and the 1950s manager” and in the personal reminiscences of Michael Halbert, First Technical Director of the Marketing Science Institute in Chapter 31 “The Wroe Alderson I knew”. Alderson's inventiveness also created a whole new class of marketing theory concepts including competitive differential advantage, organized behavior systems, intermediate sorting, market searching and transvection.

Make no mistake: this book will serve future marketing students and professionals well. Not only will it spare countless hours of searching for fugitive sources and their interpretation, but the information presented is organized like one of Alderson's personal traveling bags: all the reader needs is there but readers will have to search for and organize much of it themselves. A book review is not the place to recommend how to access the information content of the book reviewed, but a few hints on how to approach the broad spectrum of topics covered in the Guide may aid readers to grapple with problem of organizing Alderson's insights to fit their own purposes.

For instance, many readers will find that reorganizing the 38 chapters as presented into three coherent sections will offer a clearer impression of Guide contents. My choice for rearranging contributions that I would include in Part 1 would begin with Hunt, Muncy and Ray's Chapter 26: “Alderson's general theory of marketing: a formalization.” They reconstructed Alderson's general theory of marketing in propositional format. A logical next chapter is the paper which presents a systems paradigm explanation of Alderson's theoretical orientation. It is Chapter 28 by Dixon and Wilkinson. Reekie and Savitt's paper could then explain the intermediate sorting activities of marketing: in the Guide it is Chapter 27 “Marketing behavior and entrepreneurship. A synthesis of Alderson and Austrian economics”. Then to firmly orient the reader, Chapter 29 would compare Alderson's transvection to Porter's value system”. Readers would then have access to the constructs that raised Alderson's status to that of preeminent marketing theorist.

Against such a background one could see that as presented in the sequence suggested that this book emphasizes Alderson's theory in articles and books, not his multidisciplinary knowledge transfer innovations. Several Guide contributors acknowledge that Alderson's theories have largely disappeared from mainstream marketing literature so a second section, Part 2, could then highlight Alderson's skill in diffusing ideas across disciplines.

Part 2 in my preferred arrangement would present Alderson's multidisciplinary knowledge transfer activities. Connecting disciplines that rarely collaborate, Alderson's knowledge transfer skills are still in such short supply in the twenty‐first century that they warrant ongoing discussions in scientific journals. Why were they not given greater emphasis in the Guide? Instead, emphasis is given to “producing theory” step 4 listed above. However, in Alderson's lifetime the creation of marketing theory was only one element in a grand design that he may not have been conscious of pursuing in his daily activities. His life work illustrates convincingly for scientific audiences, that steps 1‐3 are of great relevance in dealing with interdisciplinary knowledge transfer today.

In contrast to my suggested three part presentation, the book as presented by the editors is organized into six parts: Part 1 includes only one chapter: Wroe Alderson: the man. Part 2 examines Alderson's theory of market behavior. Part 3 collects Alderson's writing on management practice and ethical behavior, mixing chapters containing a book review with Alderson's original papers. Part 4 consists of comments on “Aldersonian Marketing”. Part 5 contains contributed papers and reprints of commentaries previously published and Part 6 contains relevant bibliographies of Alderson's own writings and those of authors whose commentaries have been previously published.

Because of the diversity of contributors and content of the Guide, it is necessary to ask how a reader could most effectively comprehend this encyclopedic collection of Aldersonian knowledge. Perhaps, the simplest plan is for readers to determine which purpose is most relevant to their interest and then search for the desired topics in the book's table of contents, its lists of authors who have commented on Aldersonian marketing thought, and in the index at the end. Alternatively they could begin by reading the individual articles by Alderson reprinted in Parts 2 and 3.

Readers interested in topics such as Alderson's interdisciplinary and multidisciplinary achievements could comb through chapters dealing with these issues. His papers resulting from collaborating with friends from the social and information sciences could be traced through several chapters to provide a guideline to scientists in other disciplines seeking to duplicate his knowledge transfer and innovation results.

Alderson's ethical guidelines could be examined the same way to develop a new Part 3: “Alderson's guiding values” thus presenting a more coherent picture than the editors’ placement provides.

Focussing now on theory, Alderson's strong interest in marketing as a system of interrelated behavior led him to examine the firm and the household as the main organized behavior systems to be studied by marketing theorists. From his systems perspective Alderson saw clearly that successive marketing transactions resulted in an intermediate sorting process that transformed a heterogeneous conglomeration of unlike materials as are found in nature into finished assortments demanded by intermediate and final consumers. No thinker previously had conceived of a behavior unit that carried materials across distributive space and over time by converting conglomerations into supplies that could be matched to demand by completing sequential market transactions. Chapter 29 “Alderson's transvection and porter's value systems” tests the transvection, a macro‐concept, against Porter's more managerially focused concept. Transvection is Alderson's term for describing the entire sequence of sorting behaviors included in transactions required to move goods from producer to user.

Despite, his vision in recognizing marketing activities as systems behavior, Alderson stopped short of identifying the social functions of marketing as consequences of marketing performance. Such a macro perspective would have enabled him to envision the globalization of markets everywhere into a world trading system for attracting resources to their most economical points of production and distribution. Such trade expansion ideas were already under discussion at the time Alderson died in 1965 but only in recent years has the economic impact of outsourcing and off‐shoring raised international trade expansion to the actionable trade policy level of consciousness. Now, the costs of job exports and industrial contraction focus public attention on globalization in all advanced industrial countries.

One development that no one foresaw with clarity before the 1990s was the emergence of computer aided communication within organizations of every size and purpose. As Shapiro notes (p. 436), Alderson and he edited a book on Marketing and the Computer in 1963. Their analysis centered on using computers to aid in decision making within a firm faced with marketing problems. In fact computers and electronic aids of all sort have made theory development a byproduct tool of data generation by linking organizations into data generating networks and supply chains not imagined in 1963. In the present age when data may be generated within the firm or between all firms in an industry or in an economy, the data generated can be used to develop either micro or macro theory.

Owing to rapidly developing information theory in the contemporary world, marketing theory development is more often generated by data than data are predicted by theory construction. So fewer decisions are now based on marketing theory. The whole elaborate structure of concept development, paradigm construction and hypothesis testing is far more data driven today than was the case in the mid‐twentieth century. This relationship between data and theory development is nowhere discussed by the contributors or the editors of this book. Yet the emergence of data driven theory is possibly a significant reason for the current lack of appreciation for Alderson's many and substantial contributions to marketing theory.

So then of what use are Alderson's theories in today's data driven information systems world? Although nothing is more practical than a good theory, theory development has been outflanked by the emergence of information science. However, marketing theory is still needed to develop new paradigms as Dixon and Wilkinson point out in Chapter 28, “An alternative paradigm for marketing theory”. Systems development still guides what is learned using Alderson's systems concept to create marketing theories at every level of aggregation. Dixon and Wilkinson point out that as Alderson said (p. 368) “Every phase of marketing can be understood as human behavior within the framework of some operating system.” Even in a data driven world, someone has to identify the elements of the system for which data are to be developed and then show how theory relates to data.

So what are the twenty‐first century marketing systems for which new and perhaps different kinds of data will be needed to develop theory? The speed with which new kinds of organizations are appearing makes prediction both perilous and futile. Issues that prompt the introduction of new kinds of organization arise from changing social and environmental issues as well as from technological advance. Novel forms of organization such as internet blogging have enormous consequences with unforeseeable social impacts. Crises arising from natural and human induced causes now stimulate the development of new marketing systems organizations as does the astonishing speed of knowledge development. Within the span of our twenty‐first century experience of shortages, tsunamis, floods, earthquakes, wars and epidemics, new supply support organizations and new inter‐governmental reorganizations such as the European Union, North American Free Trade Agreement, LAFTA and ASEAN groups have been emerging. No management has had the marketing impact that these arrangements have produced in such a short time span. As for competitive enterprise and governmental differentiation developments, cooperative micro‐lending agencies, cell phone cooperatives for communicating current market price information and military logistic supply chains for distributing disaster relief have had the most far reaching effects.

For example, US military logistics, were effectively brought to bear on tsunami relief efforts in Southeast Asia and earthquake relief efforts in Pakistan. To provide citizen supply support logistics requisitions were indeed data driven, but the organization of logistics systems was based on a paradigm that reflected theoretical concept development in their design. A similar path could be traced for the current development of alternative fuels and energy, but this task remains to be completed by the next generation of marketing theorists, not those whose work is discussed in the Guide.

Whatever the explanation, the focus on theory in the Guide underestimates the kind of response a sturdy empiricist like Alderson would have made by trial and error learning, had he been a participant in technological advances as their applications were currently being made. Even if the world is increasingly data driven by advancing information technologies, these data have to be collected for some system of action defined by behavioral science theorists as the new systems are initially formed.

Nevertheless, Alderson's theories tended to be static. He assumed that systems under consideration remained unaffected by environmental change. For example, what transforms operating practices in marketing systems? Alderson posited the theory of competitive differential advantage. Yes, market price, product and enterprise differentiation can affect market size and market share with second order effects on the larger economy. Yes, negotiation in strategic transactions can raise the volume of routine transactions.

But beyond the tactics and strategy requiring a struggle for competitive differential advantage lie larger transformational forces that alter the whole pattern of business relations. These include market influences, political influences and international relations. Globalization, for example, has transferred many US manufacturing jobs to China, India, Canada, Southeast Asia and Ireland. Traditional marketing channels are being transformed into global supply chain networks. Domestic US competitors are outsourcing supplies by using overseas shipping to reach cheaper sources of supply and coordinating international operations. Using telecommunications and computer controlled inventory and shipment surveillance systems has enabled trading contacts to overcome barriers of time and distance for many firms in global trading contact.

As Alderson sees such organization, “an operating group has an operating structure, a power structure and a communication structure.” These drive his steady‐state organized behavior systems. But what drives performance within larger systems of national economies? Alderson saw that it is useful to execute marketing orders, sales and other communications through marketing intermediaries but he did not attempt to identify or explain the role of larger innovations such as the impact of the interstate highway system in the USA or the impact of cell telephone technologies on market prices in developing nations. An ominous influence currently ignored in US business and government circles is the declining infrastructure in the US economy. Investment in satellite guidance systems, computers or telecommunication will not support schools, highways, police departments or under‐financed regulatory agencies. Such public services, or their unavailability, change the manner and cost of conducting business.

What forces initiate changes of such magnitude that they affect the very structure of operating systems including those of marketing? Certainly the impact of outsourcing and increasing international trade has created a trade multiplier beyond the scope of Aldersonian theory. The search for competitive differential advantage now extends to nations, alliances and international trade consortia. Social and environmental forces require thinking beyond the firm and the household. Since, these forces affect every aspect of a society they warrant the attention of marketing theorists. In the early stages of its development, Alderson missed this aspect of marketing theory.

Marketing theorists including Alderson were aware of the driving power of competition to raise productivity and expand the larger national economy. But his focus on macro influences was limited to activities within the marketing process, not on the relationship between marketing and the larger social forces affecting human welfare. Early studies of comparative marketing also explored the productivity of marketing relative to other economic activities but as concern with distributive margins declined historically, other social forces claimed public attention.

By the 1990s productivity growth was fastest in industries investing heavily in technological innovation. At the present time (2007) US productivity growth rates are declining so cost cutting and industrial restructuring are now the forces commanding the attention of business leaders. A managerial policy focus ignores the larger question of how these forces of cost cutting, industrial restructuring and business and infrastructure impact investment in new technologies. Their impact offers marketing theorists opportunity to consider these macroeconomic influences on performance of the marketing function.

Searching for such subjects in Aldersonian literature will be fruitless despite his well known interest in social welfare. It was Charles Slater who introduced the concept of macro‐marketing, not Wroe Alderson. While Alderson deserves recognition for paving the way for understanding twenty‐first century marketing developments, the title of the Guide leads readers to expect global trade to be a major division of Aldersonian marketing theory. Alderson's focus was on issues more germane to issues of twentieth century marketing management, not twenty‐first century global trade. Whatever, the social purposes achieved through marketing activity, the social impact of marketing is of the gravest import as the world stumbles on the path toward a more sustainable society in the twenty‐first century. Alderson examined twentieth century marketing management issues, not their twenty‐first century social consequences.

A person with Alderson's morality and ethical values would have opposed all kinds of social irresponsibility if, indeed, Alderson's moral values were as described in the Guide. Should there not appear in the Guide index at least one reference to business stewardship or conservation of resources? Yet searching the entries under ethics, ideologies and sanctions for some statement on business or consumer responsibility or stewardship of resources in contemporary marketing campaigns yields no entry. Why not? In the dawn of sustainable society what could be more relevant to Alderson?

Part Four of the Guide, Commentaries on Aldersonian Marketing and part five commentaries on Alderson the Marketer contains papers by contributors other than Alderson. Except for a couple of self serving papers that the editors could have deleted from this collection, these papers are on target to explain not only Alderson's theories, but his innovative and entrepreneurial skills in promoting marketing theory.

Halbert, for example, gives a wonderful description of Alderson's many social networks. However, Halbert's use of the word “ethics” is simply a word for his psychological profile of Alderson's generous nature (p. 413). By focussing his attention on the behavior of firms and households, Alderson did not present a socially responsible vision of the marketing systems that he credited with improving life. However, Halbert also illustrates how the problem of cross disciplinary collaboration besieging all sciences today was effectively managed by Wroe Alderson in the 1950s. Alderson borrowed successfully from other disciplines by recruiting talented professionals. He used his consulting business, his monthly publication Cost and Profit Outlook his Marketing Theory Seminar, his connections with the Marketing Science Institute, and his association with knowledgeable faculty at the University of Pennsylvania to disseminate his marketing theories.

Alderson's accomplishments in theory formulation as well as the methods he devised to transfer knowledge are all presented in this one volume as well as bibliographic information content on his own publications. This achievement warrants a judgment that the editors have performed a service for marketing by presenting Alderson's contributions as well as professional responses to his work. Unintentionally perhaps, the editors also illustrated Alderson's commitment to continuing revelation of new knowledge as a part of his value system. Alderson's ongoing search for “truth” by organizing the complex social networks through which his influence spread demonstrates his conviction that continuing revelation was a route to advancing welfare. What more would a practicing Quaker marketing theorist ask for? As for the twenty‐first century marketing theorists represented in the Guide, it may be asked what should be included in a twenty‐first century theory guide if not issues of social equity, environmental sustainability and business responsibility for movement toward a more enduring global trading system?