How does the distributors’ “banding together” affect contract governance in marketing channels?

Abstract

Purpose Based on social network theory and the literature of contract governance, the purpose of this study is to explore how distributors’ “banding together” (network intensity) affects contract governance (detailed contracts), which, in turn, influences channel conflict and simultaneously tests the moderating effect of network centrality. Design/methodology/approach The authors collect the data from the side of 288 manufacturers. Findings This study finds that, first, distributors’ network intensity positively affects detailed contracts between manufacturers and distributors; second, detailed contracts, in turn, declines channel conflict; and third, network centrality will weaken the positive influence of network density on detailed contracts. In addition, an ex post analysis finds that detailed contracts play a negative mediating role between distributors’ network density and channel conflict and this negative mediating effect would be weakened by distributors’ network centrality. Originality/value The current study not only helps to make up for the shortcomings of using the dyadic analysis paradigm to analyze channel behavior but also helps manufacturers to understand and respond to the phenomenon of distributors’ “banding together” comprehensively and deeply.

Influence of marketing channel conflicts on channel innovation capability: the mediating role of channel cohesion and the moderating role of channel network structure

“…Although marketing channel literature is increasingly focussing on network embeddedness, existing studies emphasise channel network structure's influence on contract enforcement (Antia and Frazier, 2001), relationship formation (Wuyts and Geyskens, 2005), value creation (Swaminathan and Moorman, 2009) and contract governance (Feng et al, 2020). As such, little is known about the influence of channel network structure on conflict outcomes.…”