Governance Effects Of Manufacturer Triadic Governance

Effective governance mechanism is vital to interorganizational relationship management.Though a variety of governance strategies have been widely researched,the complexity of this phenomenon has not been fully explored.With few exceptions,these previous research limits to a dyadic perspective to manage channel members’ behaviors and only focuses on governance mechanism in dyadic relationships.This only focusing on the governance of dyadic channel relationships can neither fully explain the behaviors of networks of channel members,nor design an effective governance mechanism for the entire channel networks.In marketing channel research,more and more scholars explore the interaction mechanism between channel members from the perspective of triadic relationship.However,some theoretical questions deserve further study.First,although more and more scholars go beyond the dyadic analysis paradigm and adopt the perspective of triadic network to conduct channel governance research,designing a channel governance mechanism that can regulate the triadic network has been neglected.This limits the improvement of channel network governance effects.To further break through the limitation of taking dyadic channel relationship as the focus of analysis,a new governance mechanism that considers the triadic network relationship should be explored.Second,accordingly,the existing research gives limited attention to the governance effects of the channel network governance mechanism and its boundary condition.According to the social network theory,the structure of the network where a firm is embedded in impacts its channel network governance effects.Extant literature has shown that firms can take initiatives and optimize their network structure position to improve interfirm relationships and channel performance.In the triadic channel network,manufacturers can change their position in the channel network by implementing a channel network governance mechanism to achieve better channel governance effects.However,this may influence the interests of other channel members and accordingly change their channel behaviors.Furthermore,how to better exert the positive governance effect of the governance mechanism and weaken its negative impact is also a research issue to be explored.Then,this research needs to seek answers to the following research questions.（1）What governance effects could the governance mechanism achieve?Specifically,could the governance mechanism always have positive effects?Are there any negative effects?（2）Whether there is any boundary condition of the governance effects,such as the market status of manufacturers?（3）How to help manufacturers choose appropriate strategic orientation to achieve desirable governance effects?The exploration of the above issues will help to understand the governance effects of the governance mechanism that designed to triadic channel network,which could shed light on channel governance literature and provide useful managerial implications for channel governance.In view of this,based on structural hole theory and channel governance literature,this research proposes a new governance mechanism,manufacturer triadic governance,which is also called "breaking the bridge"governance.Traditionally,in the triadic network of"manufacturer-distributor-retailer",the connection between manufacturer and retailer is very weak,or there is no direct connection at all.The distributor acts as an intermediary between them.According to structural hole theory,there is a"break" between the manufacturer and the retailer,which is called"structural hole".Distributors occupy the"bridge" position in the network and enjoy information advantages and control advantages.Therefore,distributors are likely to take advantages of "bridge" position to conduct opportunistic behaviors towards manufacturers or retailers,reducing the performance of the whole channel network and eventually harming the interests of manufacturers.Therefore,to improve the performance of the triadic channel network,manufacturers should take measures to optimize the existing network structure,weaken dealers’information advantage and control advantage.This means that the design of manufacturers’governance mechanism must focus on the triadic channel network and could be implemented on the whole triadic channel network.The new governance mechanism proposed by this research,manufacturer triadic governance,which is also called "breaking the bridge" governance,enables manufacturers to establish direct non-transactional connections with retailers while maintaining the"mamufacturer-distributor-retailer" channel structure and channel distribution unchanged.By bridging the structure hole between manufacturers and retailers,distributors’information and control advantages brought by the structure hole have been deprived.In marketing channel management practice,this form of governance mechanism has already been implemented.For example,some manufacturers’ salespersons can directly obtain retailer information by setting up offices in the regional market,which is generally called customer-relationship maintenance.There are also some manufacturers establish virtual WeChat groups which include distributors and retailers.Companies,such as Master Kong and Coca-Cola have already practiced this governance mechanism.This governance mechanism can change the network position of distributors in the distribution network and restructure the network where manufacturers are embedded in.This can effectively regulate channel behaviors of distributors,thereby helping manufacturers to improve the governance effects of the channel network.However,the existing research gives limited attention to this governance mechanism,and we barely know how it is practiced in marketing channel management and whether it can achieve desirable governance effects.The main works of the present study are as followings:First,by reviewing on the existing research on channel governance,this research finds the theoretical gap and the expected contributions.Based on literature review,this study constructs theoretical framework and propose theoretical hypotheses.Second,this research uses a multimethod research design,combining qualitative research and quantitative research methods.Study one conducts semi-structured,qualitative interviews with 18 experienced sales managers and salespersons from different industries.Following standard qualitative data analysis procedures,the preliminary study assesses the various manifestations of manufacturer triadic governance in marketing management practices,detects the driving forces of it and investigates dealers’ reactions towards this governance mechanism.Study two and study three conduct two experiments,using parallel approaches.In each study,we employ a between-subjects factorial design.A series of work need to be done to complete the experiments,including experimental scenario development.Sales managers from multiple industries such as food,beverages,daily necessities,and electronic products are selected as respondents.The purposes of study two and study three are to investigate the governance effects of manufacturer triadic governance,its boundary conditions and strategy fit.The measures of the constructs in this study are adapted from the literature using 5-point Likert scales.Based on the interview,experts’suggestion,and pilot study,we revise the original scales in order to reflect the present study context.Third,according to the empirical results,this research confirms the casual relationships between the variables in the research framework.Based on the above and combined with the extant literatures,we discuss the results to ascertain the theoretical contributions.And finally,this research provides corresponding managerial suggestions and points out the future research direction.The main findings of the present study include:First,study one finds that the manufacturer triadic governance has three realistic manifestations,namely the offline form,the cooperation with e-commerce platforms form,and the self-built online platform form.Each form has its pros and cons.The driving forces for manufacturers to adopt this governance mechanism mainly come from two key factors.One is the external environmental factor,causing by the pressure of the market environment.The other is the internal factor,coming from the requirement of channel management.This study specifies the reactions of distributors to this governance mechanism from two aspects.Distributors will consciously improve the normality of their channel behaviors,but meanwhile,their enthusiasm for distribution would also be weaken.Second,study two confirms that manufacturer triadic governance has both positive and negative governance effects.On the one hand,it can mitigate distributors’opportunism.But on the other hand,it will also reduce distributors’ trust in manufacturers.The governance effects are moderated by manufacturers’ market status.In terms of the positive governance effect,reducing distributors’ opportunism,when manufacturers’market status is low,compared to not using manufacturer triadic governance mechanism,using manufacturer triadic governance mechanism results in less distributors’opportunistic behaviors.Regarding the negative governance effects that cause distributors’slackness and reduce distributors’ trust in the manufacturer.when manufacturers’ market status is high,compared with not using manufacturer triadic governance mechanism,using manufacturer triadic governance mechanism results in less distributors’trust but more slackness.When manufacturers’market status is low,compared with not using manufacturer triadic governance mechanism,using manufacturer triadic governance mechanism results in less distributors’slackness,but there is no significant difference regarding to distributors’trust.Finally,study three uncovers that under manufacturer triadic governance mechanism,there is a fit effect between the manufacturers’ market status and strategic orientation.The study finds that,to achieve better governance effects,high-market status manufacturers are suitable for the use of collaborating orientation,while low-market status manufacturers are suitable for arbitraging orientation.This study contributes to existing literature in three ways.First,it extends the dyadic view of marketing channel governance to a triadic network level and puts forwards a new type of governance mechanism,manufacturer triadic governance,which is also called "breaking the bridge" governance,enriching our understanding of channel network governance research.It provides a preliminary understanding of manufacturers’ channel network governance mechanism and offers deep insights for the further exploration through follow-up queries,additional responses,and practical examples.Second,it underscores that manufacturer triadic governance mechanism is a double-edged sword and the moderating effects of manufacturers’ market status.Confirming that manufacturer triadic governance mechanism has both positive and negative governance effects and manufacturers’ market status works as boundary conditions of these governance effects provide empirical evidence for the channel network governance mechanism.This research reminds manufacturers to take a more balanced view to this network governance mechanism.In addition,to achieve desirable governance effects,the governance mechanism should be used according to manufacturers’ market status.Third,this research reveals that there is a fit effect between manufacturers’ market status and strategic orientation,which helps manufacturers to further improve channel network governance effects.It contributes to manufacturers with different market statuss to initiatively choose appropriate strategic orientations to improve their governance effects.