Effective Distributor Governance in Emerging Markets: The Salience of Distributor Role, Relationship Stages, and Market Uncertainty

Abstract

Effective governance of distributors represents a critical success factor for firms operating in emerging markets such as China. To increase understanding of this issue, the authors adopt a role theory framework to delineate the effect of fit between governance strategies and distributor role orientations on channel outcomes. They also examine the way two contingency factors (relationship stages and market uncertainty) may moderate the impact of this fit. Using a four-industry survey of distributors in China, the authors confirm the salience of strategic fit between the manufacturer's governance strategy and the distributor's role orientation (in short, governance fit), in support of propositions postulated in recent channel governance research. The findings also indicate that the effects of this governance fit are dependent on the stages of the channel relationship (buildup versus mature) but not market uncertainty. This study extends the current literature and suggests the need for finer, phase-oriented dynamic governance strategies in the Chinese market.