The relationship between network governance and unilateral governance in dynamic consumer demand

Abstract

An important question for retailers is the extent to which control over suppliers should be maintained when there is uncertain consumer demand. This paper proposes that the level of network governance (high or low) affects retailers' level of unilateral control in uncertain consumer demands. The empirical results indicate that when there is a low level of network governance, retailers tend to increase the level of unilateral control over suppliers as consumer demand uncertainty increases. On the other hand, retailers who feel a high level of network governance may rely on unilateral governance to a lesser extent regardless of consumer demand uncertainty.