Aligning Governance Mechanisms with Organization Forms in Multichannel Marketing

Abstract

ABSTRACT Purpose Multichannel marketing has become the norm for distributing goods and services, and manufacturers and distributors operate in various channel organization forms. Drawing on transaction cost theory and governance value analysis, this study introduces channel organization forms as focal design elements of multichannel settings and aims to align governance mechanisms with these forms. Design/Methodology/Approach Survey data are gathered from four sub-samples of 295 Chinese manufacturers. Ordinary least squares regression analysis is used to test the hypotheses. Findings Depending on the multichannel design of manufacturers, the performance effects of contractual, normative, and authoritative mechanisms vary in the four channel organization forms: corporate, franchised, managerial, and relational. Moreover, in each organization form, there is a specific governance mechanism that positively affects cooperation performance, indicating alignment. Research Implications This study advances governance literature by demonstrating the alignment between channel organization forms and governance mechanisms, while the channel organization form serves as a contextual factor that explains the inconsistency of performance effects of governance mechanisms. In addition, extending prior research comparing differences between multichannel and nonmultichannel settings, this study explores variation within a multichannel context from a channel-organization-form perspective. Practical Implications It is critically enlightening and instructive for manufacturers to choose governance mechanisms based on their channel organization forms and thus improve cooperation performance within multichannel settings. Originality/Value This study’s findings address the gap in governance literature concerning whether the performance effects of governance mechanisms are contingent on different channel organization forms.