The authors examine international distribution channels in terms of the coordination processes that govern the relationship between export manufacturers and their foreign-based distributors. Although this relationship is mediated by market prices, manufacturers can enhance performance by relying on certain nonmarket forms of governance—control and flexibility—to manage their overseas channel better. The authors develop a model that examines both the contextual antecedents and the performance consequences of these nonmarket governance forms. One form of controls—output control—along with flexibility, is shown to enhance export channel performance, but another control form—process control—has no performance effect.
Get full access to this article
View all access options for this article.
References
1.
AchrolRavi Singh, ReveTorger, and SternLouis W. (1983), “The Environment of Marketing Channel Dyads: A Framework for Comparative Analysis,”Journal of Marketing, 47 (Fall), 55–67.
2.
AchrolRavi Singh, and SternLouis W. (1988), “Environmental Determinants of Decision-Making Uncertainty in Marketing Channels,”Journal of Marketing Research, 25 (February), 36–50.
3.
AlbaumGerald, StrandskovJesper, DuerrEdwin, and DowdLaurence (1994), International Marketing and Export Management.Wokingham, England: Addison-Wesley.
4.
AndersonErin (1985), “The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis,”Marketing Science, 4 (3), 234–54.
5.
AndersonErin, and CoughlanAnne T. (1987), “International Market Entry and Expansion via Independent or Integrated Channels of Distribution,”Journal of Marketing, 51 (January), 71–82.
6.
AndersonErin, and GatignonHubert (1986), “Modes of Foreign Entry: A Transaction Cost Analysis and Propositions,”Journal of International Business Studies, 17 (3), 1–26.
7.
AndersonErin, LodishLeonard, and WeitzBarton A. (1987), “Resource Allocation Behavior in Conventional Channels,”Journal of Marketing Research, 24 (February), 85–97.
8.
AndersonErin, and OliverRichard L. (1987), “Perspectives on Behavior-Based Versus Outcome-Based Salesforce Control Systems,”Journal of Marketing, 51 (October), 76–88.
9.
AndersonJames C., and GerbingDavid W. (1988), “Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach,”Psychological Bulletin, 103 (3), 411–23.
10.
AndersonJames C., and NarusJames A. (1990), “A Model of Distributor Firm and Manufacturer Firm Working Partnerships,”Journal of Marketing, 54 (January), 42–58.
11.
AndersonPaul F., and ChambersTerry M. (1985), “A Reward/Measurement Model of Organizational Buying Behavior,”Journal of Marketing, 49 (Spring), 7–23.
12.
AngelmarReinhard, and PrasBernard (1984), “Product Acceptance by Middlemen in Export Channels,”Journal of Business Research, 12 (2), 227–40.
13.
ArmstrongScott, and OvertonTerry (1977), “Estimating Nonresponse Bias in Mail Surveys,”Journal of Marketing Research, 14 (August), 396–402.
14.
BagozziRichard P., and YiYoujae (1988), “On the Evaluation of Structural Equation Models,”Journal of the Academy of Marketing Sciences, 16 (1), 74–94.
15.
BelloDaniel C., and LohtiaRitu (1995), “Export Channel Design: The Use of Foreign Distributors and Agents,”Journal of the Academy of Marketing Science, 23 (2), 83–93.
16.
BelloDaniel C., UrbanDavid, and VerhageBronis J. (1991), “Evaluating Export Middlemen in Alternative Channel Structures,”International Marketing Review, 8 (5), 49–64.
17.
BelloDaniel C., and WilliamsonNicholas C. (1985), “The American Export Trading Company: Designing a New International Marketing Institution,”Journal of Marketing, 49 (Fall), 60–69.
18.
BollenKenneth A. (1989), Structural Equations With Latent Variables.New York: John Wiley & Sons.
19.
BradachJeffrey L., and EcclesRobert G. (1989), “Price, Authority and Trust: From Ideal Types to Plural Forms,”Annual Review of Sociology, 15, 97–118.
20.
BrowneMichael W., and CudeckRobert (1993), “Alternative Ways of Assessing Model Fit,” in Testing Structural Equation Models, BollenKenneth A., and Scott LongJ., eds. Newbury Park, CA: Sage Publications, 136–62.
21.
CateoraPhillip R. (1993), International Marketing, Homewood, IL: Richard D. Irwin.
22.
CavusgilTamer, and NaorJ. (1987), “Firm and Management Characteristics as Discriminators of Export Marketing Activity,”Journal of Business Research, 15 (3), 221–35.
23.
CavusgilTamer, ZouShaoming, and NaiduG. M. (1993), “Product and Promotion Adaptation in Export Ventures: An Empirical Investigation,”Journal of International Business Studies, 24 (3), 479–506.
24.
CavusgilTamer, ZouShaoming, and NaiduG. M. (1994), “Marketing Strategy-Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures,”Journal of Marketing, 58 (1), 1–21.
25.
CellyKirti Sawhney, and FrazierGary L. (1996), “Outcome-Based and Behavior-Based Coordination Efforts in Channel Relationships,”Journal of Marketing Research, 33 (2), 200–210.
26.
DavidsonWilliam H. (1982), Global Strategic Management.New York: John Wiley & Sons.
27.
EisenhardtKathleen M. (1985), “Control: Organizational and Economic Approaches,”Management Science, 31 (2), 134–49.
28.
EisenhardtKathleen M. (1989), “Agency Theory: An Assessment and Review,”Academy of Management Review, 14 (1), 57–74.
29.
EliashbergJehoshua, and MichieDonald A. (1984), “Multiple Business Goals Sets as Determinants of Marketing Channel Conflict: An Empirical Study,”Journal of Marketing Research, 26 (February), 75–88.
30.
EllicksonRobert C. (1987), “A Critique of Economic and Sociological Theories of Social Control,”Journal of Legal Studies, 16 (January), 67–99.
31.
FramEugene H. (1992), “We Can Do a Better Job of Selecting International Distributors,”Journal of Business and Industrial Marketing, 7 (2), 61–70.
32.
GaskiJohn F. (1984), “The Theory of Power and Conflict in Channels of Distribution,”Journal of Marketing, 48 (Summer), 9–29.
33.
GatignonHubert, and AndersonErin (1988), “The Multinational Corporation's Degree of Control Over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation,”Journal of Law, Economics and Organization, 4 (2), 305–36.
34.
GulliverP. H. (1979), Disputes and Negotiations: A Cross-Cultural Perspective.New York: Academic Press.
35.
GundlachGregory T. (1994), “Exchange Governance: The Role of Legal and Nonlegal Approaches Across the Exchange Process,”Journal of Public Policy & Marketing, 13 (2), 246–58.
36.
GundlachGregory T., and AchrolRavi S. (1993), “Governance in Exchange: Contract Law and Its Alternatives,”Journal of Public Policy & Marketing, 12 (November), 141–55.
37.
HeideJan B. (1994), “Interorganizational Governance in Marketing Channels,”Journal of Marketing, 58 (January), 71–85.
38.
HeideJan B., and JohnGeorge (1992), “Do Norms Really Matter?”Journal of Marketing, 56 (April), 32–44.
39.
HofstedeGeert (1984), Culture's Consequences: International Differences in Work Related Values.Beverly Hills, CA: Sage Publications.
40.
JausasAugustin (1994), Agency and Distributor Agreements: An International Survey.London: Graham and Trotman.
41.
JaworskiBernard J. (1988), “Toward a Theory of Marketing Control: Environmental Context, Control Types, and Consequences,”Journal of Marketing, 52 (July), 23–39.
42.
JaworskiBernard J., and MacInnisDeborah J. (1989), “Marketing Jobs and Management Controls: Toward a Framework,”Journal of Marketing Research, 26 (November), 406–19.
43.
JaworskiBernard J., StathakopoulosVlasis, and Shanker KrishnanH. (1993), “Control Combinations in Marketing: Conceptual Framework and Empirical Evidence,”Journal of Marketing, 57 (January), 57–69.
44.
JohansonJan, and VahlneJan-Erik (1990), “The Mechanism of Internationalisation,”International Marketing Review, 7 (4), 11–24.
45.
JohnGeorge, and WeitzBarton A. (1988), “Forward Integration Into Distribution: Empirical Test of Transaction Cost Analysis,”Journal of Law, Economics, and Organization, 4 (Fall), 121–39.
Journal of Commerce United States Importer and Exporter Directory (1994). New York: Journal of Commerce.
48.
KatsikeasConstantine S., and DalgicTevfik (1995), “Importing Problems Experienced by Distributors: The Importance of Level-of-Import Development,”Journal of International Marketing, 3 (2), 51–70.
49.
KleinSaul (1989), “A Transaction Cost Explanation of Vertical Control in International Markets,”Journal of the Academy of Marketing Science, 17 (Summer), 39–44.
50.
KleinSaul, FrazierGary, and RothVictor J. (1990), “A Transaction Cost Analysis Model of Channel Integration in International Markets,”Journal of Marketing Research, 27 (May), 196–208.
51.
KleinSaul, and RothVictor J. (1990), “Determinants of Export Channel Structure: The Effects of Experience and Psychic Distance Reconsidered,”International Marketing Review, 7 (5), 27–38.
52.
KorthChristopher M. (1991), “Managerial Barriers to U.S. Exports,”Business Horizons, 34 (2), 18–26.
53.
LaiAlbert Wenben, and NevinJohn R. (1995), “Interorganizational Behavior Controls: A Theoretic Framework,” working paper, University of Wisconsin, Madison, Wisconsin. [See also same title in Enhancing Knowledge Development in Marketing: 1995 AMA Summer Educators’ Conference Proceedings, SternBarbara B., and ZinkhanGeorge M., eds. Chicago: American Marketing Association, 226–27.)
54.
MacneilIan R. (1978), “Contracts: Adjustments of Long-Term Economic Relations Under Classical, Neoclassical and Relational Contract Law,”Northwestern University Law Review, 72 (6), 854–905.
55.
MacneilIan R. (1980), The New Social Contract: An Inquiry Into Modern Contractual Relations.New Haven, CT: Yale University Press.
56.
MacneilIan R. (1981), “Economic Analysis of Contractual Relations: Its Shortfalls and the Need for a ‘Rich Classificatory Apparatus’,”Northwestern University Law Review, 75 (February), 1018–63.
57.
MadsenTage Koed (1987), “Empirical Export Performance Studies: A Review of Conceptualizations and Findings,”Advances in International Marketing, 2, 177–98.
58.
MerchantKenneth A. (1988), “Progressing Toward a Theory of Marketing Control: A Comment,”Journal of Marketing, 53 (January), 70–79.
59.
MohrJakki, and NevinJohn R. (1990), “Communication Strategies in Marketing Channels: A Theoretical Perspective,”Journal of Marketing, 54 (October), 36–51.
60.
MorganRobert M., and HuntShelby D. (1994), “The Commitment-Trust Theory of Relationship Marketing,”Journal of Marketing, 58 (July), 20–38.
61.
MunroHugh J., and BeamishPhillip (1987), “Distribution Methods and Export Performance,” in Market Entry and Expansion Modes, RossonPaul, and ReidStanley, eds. New York: Praeger Publishers, 316–31.
62.
NevinJohn R. (1995), “Relationship Marketing and Distribution Channels: Exploring Fundamental Issues,”Journal of the Academy of Marketing Sciences, 23 (4), 327–34.
63.
OuchiWilliam G. (1979), “A Conceptual Framework for the Design of Organizational Control Mechanisms,”Management Science, 25 (9), 833–48.
64.
OuchiWilliam G. (1980), “Markets, Bureaucracies, and Clans,”Administrative Science Quarterly, 25 (March), 129–41.
65.
OuchiWilliam G., and MaguireMary Ann (1975), “Organizational Control: Two Functions,”Administrative Science Quarterly, 20 (December), 559–69.
66.
RamaswamiSridhar N. (1996), “Marketing Controls and Dysfunctional Employee Behaviors: A Test of Traditional and Contingency Theory Postulates,”Journal of Marketing, 60 (April), 105–20.
67.
ReidStanley (1983), “Export Research in a Crisis,” in Export Promotion: The Public and Private Sector Interaction, CzinkotaMichael R., ed. New York: Praeger Publishers, 129–53.
68.
RootFranklin R. (1994), Entry Strategies for International Markets.Lexington, MA: Lexington Books.
69.
RossonPhillip J. (1987), “The Overseas Distributor Method,” in Market Entry and Expansion Modes, RossonPhilip J., and ReidStan D., eds. New York: Praeger Publishers, 296–315.
70.
RossonPhillip J., and FordDavid (1982), “Manufacturer-Overseas Distributor Relations and Export Performance,”Journal of International Business Studies, 13 (2), 57–72.
71.
RubinPaul H. (1990), Managing Business Transactions.New York: The Free Press.
72.
SachdevHarash J., BelloDaniel C., and PillingBruce K. (1994), “Control Mechanisms Within Export Channels of Distribution,”Journal of Global Marketing, 8 (2), 31–50.
73.
ShipleyDavid, CookDavid, and BarnettEileen (1989), “Recruitment, Motivation, Training and Evaluation of Overseas Distributors,”European Journal of Marketing, 23 (2), 79–93.
74.
SternLouis W., El-AnsaryAdel I., and CoughlanAnne T. (1996), Marketing Channels.Upper Saddle River, NJ: Prentice Hall.
75.
SternLouis W., and ReveTorger (1980), “Distribution Channels as Political Economies: A Framework for Comparative Analysis,”Journal of Marketing, 44 (Summer), 52–64.
76.
StinchcombeArthur L. (1985), “Contracts as Hierarchical Documents,” in Organizational Theory and Project Management: Administering Uncertainty in Norwegian Offshore Oil, StinchcombeArthur L., and HeimerCarol A., eds. Oslo: Norwegian University Press, 121–71.
77.
TerpstraVern, and DavidKenneth (1991), The Cultural Environment of International Business.Cincinnati, OH: South-Western Publishing Company.
78.
VenkatramanN., and RamanujamVasudevan (1986), “Measurement of Business Performance in Strategy Research: A Comparison of Approaches,”Academy of Management Review, 11 (4), 801–14.
79.
WeitzBarton A., and JapSandy D. (1995), “Relationship Marketing and Distribution Channels,”Journal of the Academy of Marketing Sciences, 23 (4), 305–20.
80.
WelchLawrence S., and LuostarinenReijo (1988), “Internationalization: Evolution of a Concept,”Journal of General Management, 14 (Winter), 34–55.
81.
WilliamsonOliver E. (1985), The Economic Institutions of Capitalism.New York: The Free Press.
82.
WilliamsonOliver E. (1991), “Comparative Economic Organization: The Analysis of Discrete Structural Alternatives,”Administrative Science Quarterly, 36 (2), 269–96.
