Role of Justice Perception in Relationship Duration, Brand Equity, and Strategic Integration

Abstract

ABSTRACT Purpose This study investigates the justice perception of buying group member retailers and examines whether it is an initiator of relationships and a constant driver of attitude through the lens of brand equity and relationship duration. Building upon the findings, this study offers practical implications for the managers of the buying group headquarters. Design/methodology/approach A questionnaire survey of 241 key informants of retailers participating in eight different retail buying groups in Japan was conducted. We conducted confirmatory factor analysis to verify measurements, and structural equation modeling to test the hypotheses. Findings Distributive justice perception directly affected relationship duration and procedural justice perception had an indirect effect on relationship duration via brand equity. We also found the significant moderating effect of strategic integration. For the group with high strategic integration, distributive justice perception had a greater effect on brand equity, whereas, in the group with low strategic integration, brand equity was more affected by procedural justice perception. Furthermore, the roles of distributive justice perception and procedural justice perception were found to be complementary. Research Implications The study expands the perception of justice in an inter-organizational environment to a loosely connected channel structure while examining two endogenous variables of relationship performance (i.e. brand equity and relationship duration). This study also finds the moderating effect that justice perception has on relationship performance. By implementing strategic integration intention as a moderator, this study considers the strategic stance of member retailers in the research setting as well. Practical Implications The findings highlight that headquarter managers must understand the role of each sub-dimension of justice perception and balance their application. As the resources for building justice perception can be limited, it is important for managers to allocate resources based on prioritization. Originality This research is a pioneering study on the implementation of justice perception in the relationship between member retailers and buying groups. Additionally, it proposes and proves the conditions required for justice perception to induce a positive attitude on the part of member retailers.