Manufacturer-distributor Relationships Research Articles

Channel diversity, constructive and destructive conflicts: the moderating role of network centrality

PurposeThis study aims to investigate the impact of channel diversity on constructive and destructive conflicts in manufacturer-distributor relationships, as well as the mediating role of distributor opportunism and the moderating role of distributor network centrality.Design/methodology/approachThis paper collected channel dual data to represent channel behavior in manufacturer-distributor relationships accurately. Using 208 matched manufacturer distributor bilateral data from Chinese B2B firms validate the conceptual model. This paper tested the proposed hypothesis using AMOS 24.0 software.FindingsChannel diversity strengthens constructive conflict and weakens destructive conflict between manufacturers and distributors. Distributor opportunism plays a mediating role between channel diversity and constructive conflict. Distributor network centrality reinforces the positive impact of channel diversity on constructive conflict and the impact of channel diversity on destructive conflict.Originality/valueThis research contributes significantly to developing channel diversity and conflict theory by expanding the dyadic view to a network view. It also provides valuable insights for managers, highlighting the importance of maintaining a good relationship with distributors with high network centrality. The research results allow the constructive aspects of channel conflict to manifest fully and enhance the effectiveness of channel management. Distributor firms should prioritize communication and contact with network members to increase their network centrality, enabling them to take more initiative, exert influence and establish advantageous cooperative partnerships with manufacturers.

Safeguarding or coordinating? Unfolding the dual-function of contracts in manufacturer-distributor relationships

By unfolding the simultaneous presence of the safeguarding function (i.e., contract monitoring) and coordinating function (i.e., joint action) of contracts, the current research operationalizes the dual-function of contracts and ascertains their effects on stimulating interfirm relationships. Analyzing the data collected from 512 manufacturers, we find that, first, contract specificity is positively associated with contract monitoring and joint action. Second, contract monitoring mediates the negative relationship between contract specificity and distributors' opportunistic behavior, while joint action mediates the positive relationship between contract specificity and channel cooperative performance. Third, while joint action directly improves channel performance, contract monitoring does not directly influence channel performance; rather, it promotes channel performance through inhibiting distributors' opportunism. In addition, contract monitoring and joint action substitute for each other in their influence on distributors' opportunism. Overall, we enrich and add insights into the literature on contractual governance by operationalizing the dual-function of contracts and investigating the underlying mechanisms of the dual-function in their influence over different channel outcomes

Unveiling the infidelity problem in exclusive manufacturer–distributor relationships: A dyadic perspective

AbstractInfidelity has been a common dark‐side phenomenon in manufacturer–distributor (M–D) relationships, which, despite its harmful effects on operating performance and long‐term viability, has received scant theoretical and empirical attention in marketing research. Using data collected from 103 manufacturers and 101 distributors located in the USA, we investigate this phenomenon by conceptualizing it as a developmental process, comprising motives, symptoms, manifestations, consequences, and remedies. Our findings show that, with a few exceptions, there are no significant differences between manufacturers and distributors with regard to their perceptions of: (a) the structural, processual, and contextual factors contributing to the emergence of infidelity; (b) the behavioral and attitudinal factors helping to diagnose partner infidelity; (c) the ambiguous, explicit, and deceptive manifestations of infidelity; (d) the possible passive, mild, or aggressive consequences of infidelity; and (e) the pre‐emptive or post hoc measures that need to be taken to cure infidelity.

Acquaintances or friends? Exploring the effects of contracts, trust and ethical level on opportunism in manufacturer-distributor relationships

PurposeThis study aims to examine how contractual mechanisms, trust and ethical levels impact opportunism in marketing channel relationships between manufacturers and distributors. Because the type of interactions, short-term or transaction-based vs long-term or relation-based, may also affect the level of opportunism, the study includes two scenarios to assess the impact of interaction type.Design/methodology/approachSurvey data from 145 distributors were collected with 69 being transaction-based and 75 being relation-based interactions.FindingsThe sole use for transaction-based and relation-based interactions is not a significant deterrent for opportunistic behavior by a distributor. Ethical level is negatively related to opportunism in transaction-based interactions, perhaps because of calculative commitment. Trust positively moderates the relationship between contractual enforcement and opportunism in transaction-based interactions. Under relation-based interactions, the opposite occurs as trust reduces contractual enforcement efforts, and thus, opportunism is reduced as well. Ethical level negatively moderates the relationship between contractual enforcement and opportunism in transactional and relational based interactions.Originality/valueResearchers have called for a more holistic approach to better understand phenomena. This study addressed that call by being the first to include contracts, trust, ethical level and opportunism within the context of the transaction and relation-based interactions between a manufacturer and a distributor. Contractual enforcement is not a significant deterrent of opportunism for transactional or relational interactions. Trust is negatively related to opportunism only in transaction-based interactions; perhaps, the threshold for acting opportunistically may be lower because of the short-term nature of the interaction. The ethical level is negatively related to opportunism in transaction and relational interactions.

Toward a social fitness perspective on contract design: Contract legitimacy and influence strategy

The effectiveness of contracts in terms of cooperative efficiency and relational outcomes in interorganizational relationships has become critical in today's volatile markets. However, extant research on the effect of contracts on trust has found inconsistent results, possibility because of its overwhelming focus on an economic fitness perspective at the expense of a social fitness perspective. Drawing insights from institutional theory, we focus on legitimacy building in interfirm contract design, investigate how contract legitimacies (i.e., regulative, normative, and cognitive) influence the effectiveness of interfirm contract design, and further explore the moderating effects of influence strategies that are applied in the process of contract implementation. Using longitudinal field survey data and archival data, this study finds that the three types of contract legitimacy play different roles in influencing compliance and trust and that noncoercive influence strategies can improve the effectiveness of regulative and normative legitimacy better than coercive influence strategies on trust. The findings offer new theoretical and managerial insights into the role of institutional environments in the effectiveness of contract design in manufacturer–distributor relationships.

Manufacturer–distributor relationships: role of relationship-specific investment and dependence types

PurposeThis paper aims to investigate the extent to which relation-specific investments undertaken by the distributor favor the presence of various governance structures (formal contract and relational governance). Furthermore, it examines whether dependence moderates the effect of relationship-specific investments on these governance structures.Design/methodology/approachSurvey data were gathered from 224 wholesalers from the food and beverage industry. Hypotheses were tested through regression analysis.FindingsThis study illustrates that property-based relationship-specific investments have a greater positive impact on the use of formal contracts than knowledge-based relationship-specific investments. Furthermore, knowledge-based relationship-specific investments have a greater positive impact on relational governance than property-based relationship-specific investments. The results also suggest that it is necessary to consider the moderating effect of cost-based dependence and benefit-based dependence. Finally, mixed governance structures (e.g. formal contracts combined with relational governance) have a positive impact on satisfaction and intention to maintain and extend the relationship.Practical implicationsThe findings allow manufacturers to concentrate their efforts on mixed governance structures facilitating relationship-specific investments and benefit-based dependence from distributors to develop a competitive advantage.Originality/valueSeveral investigations have obtained a relationship between investments in specific assets, governance structures and performance. Nevertheless, they have not identified different types of investments in specific assets. This study proposes that there are two types of relationship-specific investments: based on property and based on knowledge. Additionally, a two-dimensional model of dependence (cost-based and benefit-based) allows capturing the different theoretical spheres of this concept.

A two-stage data envelopment analysis model for measuring performance in three-level supply chains

Data Envelopment Analysis (DEA) has been widely used to evaluate supply chain performances. In conventional DEA, supply chains are represented as black boxes where only the initial inputs and final outputs are considered to measure their efficiency. However, an integrated model measuring both the efficiency of the entire supply chain and that of all its components at all levels is essential for a comprehensive evaluation. This study presents a two-stage DEA method to evaluate the performance of a three-level supply chain including suppliers, manufacturers and distributors. The proposed model can be used both under the constant returns to scale and the variable returns to scale assumptions and can be easily implemented for comprehensive analysis of multi-level supply chains. We present a numerical example to demonstrate applicability of the proposed model and exhibit the efficacy and effectiveness of the proposed algorithms and procedures. In particular, the numerical results demonstrate that the entire supply chain is “comprehensively” efficient only if efficient supplier–manufacturer and manufacturer–distributor relationships are established.

Relational norms and collaborative activities: Roles in reducing opportunism in marketing channels

Reducing opportunism is a critical task to support channel performance and channel member satisfaction. Recent research into marketing channels focuses on the role of relational governance in curbing opportunism; this study advances this thesis by positing that relational governance encompasses both relational norms and collaborative activities (i.e., joint planning and joint problem solving). In turn, the current research investigates how these two aspects of relational governance independently and jointly check opportunism in marketing channels. The tests of the hypotheses involve 149 Chinese manufacturer–distributor relationships. The results show that relational norms have a negative effect on opportunism, but the effect of collaborative activities is contingent on the level of consistency between the relational norms and collaborative activities that mark the relationship. A low level of relational norms prompts joint planning to inhibit opportunism and joint problem solving to exacerbate it. However, a high level of relational norms reverses these effects: Joint planning fosters opportunism, and joint problem solving curbs it. Thus collaborative activities have different properties that need to be devised in accordance with relational norms if the goal is to reduce opportunism.

Collaborative manufacturer-distributor relationships: the role of governance, information sharing and creativity

Purpose – This paper seeks to report the results of a study examining the effects of manufacturer-distributor relationships' governance structures (market governance, third-party enforcement of agreements and self-enforcing governance modes) on the distributor's willingness to collaborate with the manufacturer. Design/methodology/approach – To test the hypotheses, survey data were gathered from 224 wholesalers from the food and beverage industry in Spain. Manufacturer-distributor collaboration refers to the possibility of sharing strategic information and encouraging creativity. Regression analyses illustrate the differences in the distributor's willingness to collaborate with the manufacturer under different governance scenarios. Findings – The study illustrates that the greater the skill of the manufacturers and distributors in developing self-enforcing governance modes (e.g. bilateral formal safeguards and bilateral informal safeguards) that complement third-party enforcement of agreements (e.g. legal contracts), the greater the willingness of both to share strategic information and creativity will be. Furthermore, this investigation delineates the moderating effect of opportunism on the relationship between governance and the distributor's willingness to collaborate with the manufacturer. Finally, the results show that the distributor's willingness to share strategic information has an inverted-U relationship with creativity and innovation development in manufacturer-distributor relationships. Practical implications – The study's findings allow firms to concentrate their efforts on the most relevant governance structures that minimize transaction costs and provide incentives to develop collaborative manufacturer-distributor relationships and create value for the customer. Originality/value – The research acknowledges the multidimensional nature of collaboration and goes deeper into the need to share strategic information (external and internal strategic information) and the factors that compose the generation of creative ideas in the manufacturer-distributor relationship (knowledge-sharing routines, learning orientation, open-mindedness and management support). Additionally, although research on collaborative distribution channel practices has advanced over the past decades, the importance of governance structures to the development of collaborative practices has not been firmly established. The paper addresses this void in the literature by reporting the results of an empirical study examining manufacturer-distributor collaborations within the food and beverage industry in Spain.

Leegin and its Progeny: Implications for Internet Commerce

Retailing involves more than merely reselling products; it also provides product information to consumers. Product information can be offered by salespeople at conventional retailers and electronically by Internet retailers, or by a product's manufacturer through extensive advertising. Outcomes depend on who provides consumers with this information. This issue has strong implications for antitrust policy towards manufacturer-distributor relationships. The message of the recent Leegin decision was that vertical price restraints should be evaluated under the rule of reason. That message however is largely vacuous without more detail because it merely shifts the issue to what should be the criteria for different outcomes. I review here the antitrust case brought against Babies “R” Us, the leading retailer of various baby products. That case was the first application of the Leegin decision and suggests a path for future antitrust jurisprudence dealing with interactions between manufacturers and both conventional and Internet retailers.

Análisis del efecto moderador de la estructura de la interdependencia sobre la relación entre la confianza y la satisfacción en relaciones fabricante-distribuidor

The objective of this paper is to examine in depth the manufacturer-distributor relationships through a dyadic approach (both partners of the commercial transaction are jointly considered). So far, this approach has received little attention in marketing literature. In this context, an analysis of the influence of interdependence structure on relation between trust and satisfaction in manufacturer-distributor relationships is carried out. In this study, the hypotheses were tested through a qualitative and quantitative research in the bakery sector (Spain). The results found that the influence of interdependence structure is significantly different depending on the relationship perspective examined. Finally, several academic and managerial implications about the commercial relationships management are outlined.

Determinants of economic and social satisfaction in manufacturer–distributor relationships

The aim of this work is to examine the dimensions of satisfaction in manufacturer–distributor relationships as well as identifying the antecedents of both the economic and the non-economic dimensions of satisfaction. A literature review about satisfaction in marketing channels is followed by quantitative research into how this interchange process is perceived by food product distributors in their relationships with manufacturers. The results provide strong support for the impact of communication, trust and commitment on satisfaction, as well as the interrelationships among the economic and the non-economic dimensions of satisfaction. Theoretical and managerial implications are extracted from these findings.

Dağıtım Kanallarında Üretici - Bayi İlişkilerinde Bağımlılık Kavramı ve Bağlılığın İşbirliği, Bağımlılık ve Memnuniyet Üzerine Etkileri

In this study, we focus on the construct of dependence in working relationships between manufacturer firms and their distributors. We discuss the three facets of the dependence construct (transaction investments, replacability and importance) and their specific effects on manufacturer-distributor relationships. Specifically, the links between dependence and some important relational outcomes (commitment, cooperation and satisfaction) are investigated in detail. The hypotheses developed in the conceptual section of the study are tested using survey data collected from 192 automobile dealers in Turkey. Several implications of the study finding are presented.

The Hunt–Vitell General Theoryof Marketing Ethics: Can it Enhance our Understanding of Principal-Agent Relationships in Channels of Distribution?

This paper advances the Hunt–Vitell General Theory of Marketing Ethics as a framework for enriching current understanding of both long-term marketing relationships in general, and principal-agent associations specifically. Under economic models of agency theory, manufacturer-distributor relationships are conceptualized as principal-agent associations where both parties are assumed be motivated exclusively by short-term financial self-interest within the logical constraints of zero-sum game conditions. As a general model of ethical decision making and behavior in marketing, the Hunt–Vitell theory illustrates how ethical decisions are predicated not only upon estimations of potential benefits or outcomes (using teleological criteria), but also deontological evaluations which invoke norms and values. Furthermore, the recent ideas advanced in "relationship marketing" perspectives suggest that distribution channel associations premised upon non-zero-sum or symbiotic assumptions may be more effective and more jointly profitable. Based upon the Hunt–Vitell model, propositions are formulated that complement the understanding of agency theory within the context of marketing channel relationships, and thus, may represent a basis for more effective agency selection and interaction in marketing practice.

Process Standardization across Intra- and Inter-Cultural Relationships

Theory suggests that culture may hinder the ability to effectively standardize the process of relationship development strategies across intra- and inter-cultural relationships. Construct relationships between trust, commitment, conflict and satisfaction in manufacturer-distributor relationships are examined intra- (i.e., within a single cultural type) and inter-culturally (i.e., between different cultural types) with a sample of distributors from Canada, Chile, Mexico and the United States. Results support theoretical differences in the consequences of the trust-commitment relationship between intra-cultural and inter-cultural relationships. The results suggest process standardization based upon cultural type.

Degrees-of-Freedom Analysis of Case Data in Business Marketing Research

A valuable, although little-used, case data analysis technique, Degrees of Freedom Analysis, is the subject of this article. Given the richness of case data and its prevalence in business marketing research, Degrees of Freedom Analysis has the potential to become an important addition to one’s “research workbench.” The technique, first proposed by Donald Campbell (Campbell, Donald, T.: “Degrees of Freedom” and the Case Study. Comparative Political Studies, 8, 178–193 [1975]), is described. Three business marketing applications are presented; the first two involve use of the technique to compare the extent to which four theories of group decision making are manifested in organizations. The third application illustrates how the technique can be used for theory development in the context of manufacturer–distributor relationships. Our contribution is in demonstrating how researchers can link “traditional” (i.e., logical positivistic) hypothesis testing procedures to examine theoretical propositions in case study research. This approach is one way of achieving a critical test (Carlsmith, J. Merrill, Ellsworth, Phoebe C., and Aronson, Elliot: Methods of Research in Social Psychology. Addison Wesley Publishing Company, Reading, MA, 1976]), that is, testing the relative empirical strengths of competing theories. Our applications highlight the value of generalizing case data to theory versus the inappropriate attempt to generalize such data to a population (Yin, Robert K.: Case Study Research Design and Methods, second edition. Sage Publications, Thousand Oaks, CA, 1994). The explication and demonstration of this technique is not available elsewhere to the degree provided here.

Reactions to disappointing performance in manufacturer-distributor relationships: The role of escalation and resource commitments

A model is presented of an exchange episode between a manufacturer and a distributor that generates disappointing performance outcomes. The authors suggest that manufacturers commit different types of resources in the initial stages of relationships with distributors, which affect both the distributor's ability and willingness to achieve performance goals. These initial resource commitments affect the commitment of further resources, after the receipt of negative outcomes, both directly (through a mental budgeting process) and indirectly (through the attributions made about the cause of the disappointment). The authors use resource theory, attribution theory, and research on escalation of commitment to structure their conceptual framework and research propositions. © 1997 John Wiley & Sons, Inc.

Partnering relationship activities: Building theory from case study research

Both qualitative and quantitative techniques are used to gain an understanding of partnering activities in manufacturer-distributor relationships. This article is a meta-analytic summary of data gained from semi-structured interviews conducted by multiple teams of researchers. The process of building theory from case study research is illustrated in the context of business marketing relationships using guidelines developed by Eisenhardt (1989). Based on the results of our analyses, partnering activities are generally geared more toward marketing, planning, and communication between firms. Surprisingly, there were few reported incidences of partnering activities in logistics and information exchange (i.e., electronic access to information between firms).

Patterns of Credible Commitments: Territory and Brand Selectivity in Industrial Distribution Channels

The authors propose a new theoretical rationale that explains the paired existence of both a manufacturer's decision to limit the number of intermediaries operating in a specific geographic market and a distributor's decision to limit brand assortment in a product category. Using transaction cost reasoning, they suggest that channel selectivity agreements can be understood as interrelated exchanges of pledges, or credible commitments, that counterbalance exposure to opportunism and neutralize sources of relationship instability, thereby strengthening an interorganizational relationship. The empirical results, which are based on dyadic data from 362 manufacturer–distributor relationships, are broadly supportive of their framework.

The political economy of manufacturer-distributor relationships : Aranda, Euangelina, 1994, “La politica económica en las relaciones produccion/distribución”, Distribucion y Consumo (Spain), Vol. 4 (17), pp. 20–35

The political economy of manufacturer-distributor relationships : Aranda, Euangelina, 1994, “La politica económica en las relaciones produccion/distribución”, Distribucion y Consumo (Spain), Vol. 4 (17), pp. 20–35