Conflict management in dual distribution channel systems: the moderating role of learning capabilities

Abstract

Purpose In dual distribution channel systems, integrated channels (manufacturer-owned) and independent channels (distributor-owned) are likely to adopt destructive behaviours. To suppress such behaviours, manufacturers need to implement conflict management systems. The purpose of this study is to examine the moderating role of conflict-learning capability (CLC) in the relationship between conflict management system and destructive behaviour. This study also investigates whether interactions between conflict management systems and CLC improve the overall channel performance. Design/methodology/approach Using survey data from 157 Japanese industrial manufacturers, this study conducted regression analyses and mediation analyses. Findings The results show that boundary and compensation systems have different effects on destructive behaviours. On the one hand, compensation systems with strong CLC have a larger impact, although those with weak CLC can also suppress destructive behaviours to some degree. On the other hand, boundary systems with strong CLC suppress destructive behaviours, but those with weak CLC do not. In addition, this study reveals that manufacturers with strong CLC can indirectly improve overall channel performance by implementing conflict management systems and suppressing destructive behaviours. Originality/value Previous studies reveal that boundary and compensation systems suppress destructive behaviours. However, these studies neglect the importance of organisational capability in the successful implementation of conflict management systems. By focusing on CLC, this study advances our understanding of dual distribution and channel conflict.

The influence of conflict with suppliers on retailers’ private label performance

“…Compensation means offering an appropriate economic incentive to PL suppliers (Ishii, 2020; Webb, 2002; Webb and Lambe, 2007). Economic incentives may be used for accommodating and compromising on goal incompatibility and offer a powerful means to reduce the risk associated with destructive supplier behavior caused by inter-organizational conflict.…”

“…In line with the classifications, we expect that a retailer’s perceived levels of conflict with PL suppliers differ between PL types. Conflict is defined as a situation in which one perceives another to be engaged in behavior that prevents or impedes it from achieving its goals (Ishii, 2020; Stern and El-Ansary, 1988). Hence, a retailer can enhance PL performance, defined as the contribution of PLs to sales volume and profit in a store for purpose of our study, when a retailer perceives less conflict with a PL supplier.…”

Manufacturers' and distributors' capabilities influencing dual channel choice

“…(Jindal et al, 2007). Similarly, many business-to-business manufacturers deal directly with end-users while also using traditional wholesale distributors to sell their products (Ishii, 2020;Sa Vinhas and Anderson, 2005). Manufacturers rely on both integrated and independent channels of distribution for the same product line to better meet customer needs and increase their market penetration.…”