Organizational design and pricing capabilities for superior firm performance

Abstract

Purpose– The purpose of this paper is to test the relationship between organizational antecedents, pricing capabilities, and firm performance.Design/methodology/approach– Quantitative survey of 748 managers from mostly large companies globally.Findings– It was found that the following five key organizational resources (the 5 Cs) – center-led price management, organizational confidence, championing behaviors, organizational change capacity, and pricing capabilities – positively influence firm performance. Furthermore, it was found that center-led price management, organizational change capacity, and championing behaviors act as important antecedents to pricing capabilities and, except for the former, to organizational confidence. The authors also examine interaction and mediation effects.Originality/value– The results thus suggest that generic organizational factors – namely center-led price management – as well as highly idiosyncratic firm, specific capabilities – namely organizational confidence, championing behaviors by top management, organizational change capacity, and pricing capabilities – are key requirements to increase firm performance via pricing.