The role of interfirm reciprocity norm and agent's conscientiousness in supply contract adjustment decision

Abstract

Purpose – The purpose of this paper is to better understand the main effects of agent conscientiousness and reciprocity norm and the interaction effect of these two factors on contract adjustment decisions in buyer-supplier relationships. Design/methodology/approach – Two scenario-based experiments with college students and business professionals were conducted. Three regression models were run to test three hypotheses proposed in the paper. Research limitations/implications – The limitations of this study are the use of single-agent decision scenarios and the specific focus on one aspect of agent personality – i.e. conscientiousness and its collective influence on contract adjustment decisions. In a broader picture, the results of this study support the cross-level analytical approach to investigating marketing channel relationships, in which individual-level and organizational-level factors interact and determine decision outcomes in business exchanges. Practical implications – Recruiting and promoting managers who exhibit high levels of conscientiousness, coupled with proactively cultivating the norm of reciprocity with suppliers, are critical to a firm's thrust in attaining and sustaining marketing channel management practices with the emphasis on reciprocity-based exchange relationships. Originality/value – While the extant literature focuses largely on interfirm governance and contract enforcement, this study examines what actually influences decision-making agents' contract adjustment decisions. This study expands the marketing literature by investigating the impacts of agent conscientiousness and reciprocity norm on contract adjustment decisions.