Organizational structure, innovation performance and customer relationship value in the Greek advertising and media industry

Abstract

Purpose This paper aims to explore the impact of organizational structure dimensions on innovation performance as well as its implications on business customers’ relationship value and financial performance in the business-to-business (B2B) market of the Greek advertising and media industry. Design/methodology/approach Based on a sample of 180 executives, who are at the helm of 163 Greek advertising and media organizations, the authors apply the partial least square method to test the association of organizational structure with innovation performance, business customers’ relationship value and financial outcomes. Findings Findings have brought to light that training boosts organization’s capacity to innovate, whereas direct supervision as a coordination mechanism significantly restricts this capacity. Innovation performance in the advertising B2B market fosters business customers’ relationship value and financial performance, while financial outcomes are also beneficially affected by profitable relationships with customer relationship value. Practical implications Because of the dramatic decline in their profitability caused by the economic crisis in the past five years, Greek advertising and media companies are threatened with extinction; thus, they are required to enhance their effectiveness through the adoption of a more innovation-oriented structure. Thus, managers should facilitate structures supporting training and delimiting direct supervision to foster the development of a competitive advantage built on innovation, creativity and business clients’ relationship. Originality/value This study contributes to the existing relationship marketing literature because it introduced Mintzberg’s typology to measure organizational structure and led to the diagnosis of the associations between different dimensions of organizational structure and various aspects of performance in the media and advertising industry, revealing the partial mediating role of customer relationship value between innovation and financial performance in the B2B market.