Does B2B WOM usage matter to channel relationship performance? The roles of organizational culture and psychic distance

Abstract

Word-of-mouth (WOM) in the business-to-business (B2B) context is of great interest to business managers and academic researchers. Firms often use B2B WOM not only choose products and services but also to select channel partners. Particulaly, exporting manufacturers tend to rely on face-to-face WOM from existing partners and business connections to select international channel partners. However, the literature provides contradictory findings on whether WOM usage for selecting international channel partners has a positive or negative impact on subsequent relationship outcomes. Therefore, the question of whether export manufacturers should use WOM in the selection of international channel partners remains unanswered. We aim to address this question by examining firms' internal and external factors (i.e., organizational culture and psychic distance, respectively). By analyzing survey data from Japanese exporting manufacturers, we show that WOM usage can have both positive and negative effects on relationship performance, depending on the firm's internal and external factors. Specifically, organizational culture (power distance and masculinity/femininity) and perceived psychic distance (people characteristics distance) influence the benefits of WOM usage. By indicating that WOM usage does not always lead to favorable outcomes, our study contributes to the research on B2B WOM management and international channel relationships.