A study was conducted to understand when and why manufacturers might convert from an independent salesforce to a direct salesforce. On the basis of hypotheses developed from channel distribution theory and ecological theory of organizational change, the authors estimate a model of a firm's intention to “go direct” with survey data from 243 manufacturers currently using manufacturers’ representatives. Results indicate considerable inertia in the manufacturer/agent relationship and suggest some reasons for the stability of those arrangements.
Get full access to this article
View all access options for this article.
References
1.
AlchianArmen (1950), “Uncertainty, Evolution, and Economic Theory,”Journal of Political Economy, 58(1), 211–21.
2.
AndersonErin (1985), “The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis,”Marketing Science, 4(Summer), 234–54.
3.
AndersonErin, and CoughlanAnne T. (1987), “International Market Entry and Expansion Via Independent or Integrated Channels of Distribution,”Journal of Marketing, 51(January), 71–82.
4.
AndersonErin, and OliverRichard L. (1987), “Perspectives on Behavior-Based and Outcome-Based Salesforce Control Systems,”Journal of Marketing, 51(October), 76–88.
5.
AndersonErin, and WeitzBarton (1989), “Determinants of Continuity in Conventional Industrial Channel Dyads,”Marketing Science, 8(Fall), 310–23.
6.
AndersonJames C., and NarusJames A. (1984), “A Model of the Distributor's Perspective of Distributor-Manufacturer Working Relationships,”Journal of Marketing, 48(Fall), 62–74.
7.
AndersonJames C., and NarusJames A. (1990), “A Model of Distributor Firm and Manufacturer Firm Working Partnerships,”Journal of Marketing, 54(January), 42–58.
8.
ArmstrongJ. Scott, and OvertonTerry S. (1977), “Estimating Nonresponse Bias in Mail Surveys,”Journal of Marketing Research, 14(August), 396–403.
9.
BourgeoisL. J. (1981), “On the Measurement of Organizational Slack,”Academy of Management Review, 6(1), 29–39.
10.
BrehmJack W. (1966), A Theory of Psychological Reactance.New York: Academic Press, Inc.
11.
BruderlJosef, and SchusslerRudolf (1990), “Organizational Mortality: The Liabilities of Newness and Adolescence,”Administrative Science Quarterly, 35(September), 530–47.
12.
CampbellD. T. (1955), “The Informant in Quantitative Research,”American Journal of Sociology, 60(January), 339–42.
13.
CarrollGlenn R. (1984), “Organizational Ecology,”Annual Review of Sociology, 10, 71–93.
14.
CavesR. E., and PorterM. E. (1977), “From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition,”Quarterly Journal of Economics, 91(May), 241–61.
15.
ChurchillGilbert A.Jr. (1979), “A Paradigm for Developing Better Measures of Marketing Constructs,”Journal of Marketing Research, 16(February), 64–73.
16.
CoreyE. Raymond, CespedesFrank V., and Kasturi RanganV. (1989), Going to Market: Distribution Systems for Industrial Products.Boston: Harvard Business School Press.
17.
CoughlanAnne T. (1985), “Competition and Cooperation in Marketing Channel Choice: Theory and Application,”Marketing Science, 4(Spring), 110–29.
18.
DayGeorge S., and KleinSaul (1987), “Cooperative Behavior in Vertical Markets: The Influence of Transaction Costs and Competitive Strategies,” in Review of Marketing 1987, HoustonMichael J., ed. Chicago: American Marketing Association,39–66.
19.
DiMaggioPaul J., and PowellWalter W. (1983), “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields,”American Sociological Review, 48(April), 147–60.
20.
DwyerF. Robert, and Ann WelshM. (1985), “Environmental Relationships of the Internal Political Economy of Marketing Channels,”Journal of Marketing Research, 22(November), 397–414.
21.
FrazierGary L. (1983), “On the Measurement of Interfirm Power in Channels of Distribution,”Journal of Marketing Research, 20(May), 158–66.
22.
GaskiJohn F. (1984), “The Theory of Power and Conflict in Channels of Distribution,”Journal of Marketing, 48(Summer), 9–29.
23.
GibbonsJames (1988), How to Start and Build a Successful Manufacturers’ Agency.Englewood Cliffs, NJ: Prentice-Hall, Inc.
24.
GilbertRichard J. (1989), “Mobility Barriers and the Value of Incumbency,” in Handbook of Industrial Organization, Vol. 1, SchmalenseeRichard, and WilligRobert, eds. Amsterdam: North-Holland Publishing Company.
25.
GuiltinanJoseph P. (1974), “Planned and Evolutionary Changes in Distribution Channels,”Journal of Retailing, 50(Summer), 79–103.
26.
GuptaNina (1980), “Some Alternative Definitions of Size,”Academy of Management Journal, 23(4), 759–66.
27.
HananMichael T., and FreemanJohn (1984), “Structural Inertia and Organizational Change,”American Sociological Review, 49(April), 141–64.
28.
HarriganKathryn Rudie (1985), “Exit Barriers and Vertical Integration,”Academy of Management Journal, 28(September), 686–97.
29.
HeideJan B., and JohnGeorge (1988), “The Role of Dependence Balancing in Safeguarding Transaction-Specific Assets in Conventional Channels,”Journal of Marketing, 52(January), 20–35.
30.
JacksonBarbara Bund (1985), Winning and Keeping Industrial Customers: The Dynamics of Customer Relationships.Lexington, MA: Lexington Books.
31.
JohnGeorge, and WeitzBarton (1988), “Forward Integration Into Distribution: Empirical Test of Transaction Cost Analysis,”Journal of Law, Economics, and Organization, 4(Fall), 121–39.
32.
JohnGeorge, and WeitzBarton (1989), “Salesforce Compensation: An Empirical Investigation of Factors Related to Use of Salary Versus Incentive Compensation,”Journal of Marketing Research, 26(February), 1–14.
33.
JudgeGeorge G., GriffithsWilliam E., and Carter HillR., and LeeTsoung-Chao (1985), The Theory and Practice of Econometrics, 2nd ed.New York: John Wiley & Sons, Inc.
34.
KleinSaul, FrazierGary L., and RothVictor J. (1990), “A Transaction Cost Analysis Model of Channel Integration in International Markets,”Journal of Marketing Research, 27(May), 196–208.
35.
KlempererPaul (1987), “The Competitiveness of Markets With Switching Costs,”Rand Journal of Economics, 18(Spring), 138–50.
36.
LevinthalDaniel A., and FichmanMark (1988), “Dynamics of Interorganizational Attachments: Auditor-Client Relationships,”Administrative Science Quarterly, 33(September) 345–69.
37.
LilienGary L. (1979), “ADVISOR 2: Modeling the Marketing Mix Decision for Industrial Products,”Management Science, 25(February), 191–204.
38.
LordRobert G., and MaherKaren G. (1990), “Alternative Information-Processing Models and Their Implications for Theory, Research, and Practice,”Academy of Management Review, 15(1), 9–28.
39.
MacauleyStewart (1963), “Non-Contractual Relations in Business,”American Sociological Review, 18(April), 55–70.
40.
NelsonRichard R., and WinterSidney G. (1982), An Evolutionary Theory of Economic Change.Cambridge, MA: Belknap Press.
41.
NunnallyJum C. (1978), Psychometric Theory, 2nd ed.New York: McGraw-Hill Book Company.
42.
OliverRichard L. (1980), “A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions,”Journal of Consumer Research, 17(November), 460–9.
43.
PettyRichard E., and CacioppoJohn T. (1981), Attitudes and Persuasion: Classic and Contemporary Approaches.Dubuque, IA: William C. Brown Co. Publishers.
44.
PorterMichael (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors.New York: The Free Press.
45.
Research Institute of America (1975), “When, Where, and How to Use Manufacturers’ Representatives,” staff report.
46.
RuekertRobert W., and ChurchillGilbert A.Jr. (1984), “Reliability and Validity of Alternative Measures of Channel Member Satisfaction,”Journal of Marketing Research, 21(May), 226–33.
47.
RyansAdrian B., and WeinbergCharles B. (1987), “Territory Sales Response Models: Stability Over Time,”Journal of Marketing Research, 24(May), 229–33.
48.
SmithGerald F. (1988), “Towards a Heuristic Theory of Problem Structuring,”Management Science, 34(December), 1489–1506.
49.
StawBarry M. (1980), “Rationality and Justification in Organizational Life,”Research in Organizational Behavior, 2, 45–80.
50.
StawBarry M., and RossJerry (1987), “Behavior in Escalation Situations: Antecedents, Prototypes, and Solutions,”Research in Organizational Behavior, 9, 39–78.
51.
SternLouis W., and El-AnsaryAdel I. (1988), Marketing Channels, 3d ed.Englewood Cliffs, NJ: Prentice-Hall, Inc.
52.
WilliamsonOliver E. (1983), “Credible Commitments: Using Hostages to Support Exchange,”American Economic Review, 85(September), 519–40.
53.
WilliamsonOliver E. (1985), The Economic Institutions of Capitalism.New York: The Free Press.
54.
Yasai-ArdekaniMasoud (1986), “Structural Adaptations to Environments,”Academy of Management Review, 11(1), 9–21.