Hypothesis Identification

Hypothesis Identification Article Analysis

University of Phoenix

Understanding how to use and identify hypothesizes is very important in almost every facet of business today. It is important that the writer be able to clearly communicate their theories and then be able to accurately show of it has been proven or otherwise through the use of accepted practices based on sampling data. In this paper, a relevant business article, “When Do Chief Marketing Officers Affect Firm Value?” will be reviewed to determine the writer’s ability to meet this important skill.

In the article “When Do Chief Marketing Officers Affect Firm Value?” the author is attempting to determine if a CMO has value to a company, or if their role can be absorbed into the role of the CEO (Boyd, Chandy, & Cunha, 2010). Our author states in the hypothesis that “Because the CMO is the most direct steward of a firm’s customers, and customers are among the few stakeholders who actually provide the revenues that keep a firm running, the CMO has great responsibility (Court 2007)” (Boyd, Chandy, & Cunha, p. 1162, 2010). This statement shows the hypothesis of the author that CMO’s do in fact the ability to affect the value of their respective firms.

To validate this hypothesis, a sampling of CMO appointments were gathered from 1996 to 2005. The day of appointment was tracked as t, as well as estimating the return on stock price using the following formula:

Where equals the rate of return on the stock price of the firm (i) on the day of appointment (t), equals the daily returns on the Standard and Poor 500 on day t, represents the intercept term, represents the risk involved in stock i, and represents a residual on that estimation. The data was gathered using press releases and news reportsfrom the above mentioned dates (1996 through 2005). Customer power was measured by the presence, or absence of a major customer to the organization. Values were also assigned to CMO...