A Model of Distributor Firm and Manufacturer Firm Working Partnerships
Author(s): James C. Anderson and James A. Narus
Source: Journal of Marketing , Jan., 1990, Vol. 54, No. 1 (Jan., 1990), pp. 42-58
Published by: Sage Publications, Inc. on behalf of American Marketing Association
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James C. Anderson & James A. Narus
A Model of Distributor Firm
and Manufacturer Firm
Working Partnerships
A model of distributor firm and manufacturer firm working partnerships is presented and is assessed
empirically on a sample of distributor firms and a sample of manufacturer firms. A multiple-informant
research method is employed. Support is found for a number of the hypothesized construct relations
and, in both manufacturer firm and distributor firm models, for the respecification of cooperation as an
antecedent rather than a consequence of trust. Some implications for marketing practice are discussed
briefly.
M ARKETPLACE trends have underscored the
need for a better understanding of working part-
commitments (Arthur Andersen & Co. 1987). As a
confluent result, manufacturer firms and distributor
nerships between manufacturer firms and distributor firms are involved in fewer, but increasingly signififirms. Sales through wholesaler-distributors have been cant, working partnerships in which better coordinagrowing at a rate faster than the U.S. gross national tion of marketing and technical activities is essential
product (GNP) and topped the $1.4 trillion mark in for their mutual success in the customer marketplace.
1987 (Arthur Andersen & Co. 1987). In another trend,
In this article, we report a study of distributor and
significant consolidation is occurring in the whole- manufacturer working partnerships, which we define
sale-distribution industry as larger, professionally as the extent to which there is mutual recognition and
managed firms acquire smaller "mom-and-pop" firms
at a rapid rate. Finally, end-user or customer firms
have signalled through the growth of systems contracts and preferred vendor programs an increased desire to concentrate their purchases with fewer wholesaler-distributors, to whom they offer longer-term
James C. Anderson is the William L. Ford Professor of Marketing and
Wholesale Distribution and Associate Professor of Behavioral Science
in Management, J. L. Kellogg Graduate School of Management, Northwestern University. James A. Narus is Associate Professor of Management, Babcock Graduate School of Management, Wake Forest University. The authors gratefully acknowledge the financial support of the
Marketing Science Institute and the Distribution Research & Education
Foundation, the helpful comments and suggestions of Erin Anderson,
F. Robert Dwyer, Gary Frazier, George John, Robert Spekman, Barton
Weitz, and the three anonymous JM reviewers, and the assistance of
Rajagopalan Sethuraman with the analysis.
understanding that the success of each firm depends
in part on the other firm, with each firm consequently
taking actions so as to provide a coordinated effort
focused on jointly satisfying the requirements of the
customer marketplace. Aspects of manufacturer and
distributor working partnerships have received considerable attention in channels research over the past
20 years (e.g., Frazier 1983a; Frazier and Sheth 1985;
Stern and Reve 1980). We attempt to contribute to
this knowledge and research in marketing channels in
at least two ways. First, we develop and present a
model of distributor firm and manufacturer firm work-
ing partnerships that is both broad in scope and spec-
ified in a testable form. Ster and Reve (1980) and
Frazier and Sheth (1985), in particular, have stressed
the need for constructing and testing more compre-
hensive models of marketing channel phenomena.
Second, we report an initial empirical assessment of
42 / Journal of Marketing, January 1990
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Journal of Marketing
Vol. 54 (January 1990), 42-58
this model with research employing multiple informants within distribution firms and within manufacturer firms drawn from a cross-section of industries.
Phillips (1981) has demonstrated the need to use multiple informants within each firm to obtain more valid
estimates of organizational properties, and rarely have
both the manufacturer's and the distributor's perspectives on channel partnerships been assessed empirically. John and Reve (1982) and Eliashberg and Michie
(1984) studied the joint perspective of manufacturers
and distributors, which has been referred to as a dyadic
perspective (cf. Achrol, Reve, and Stem 1983). In
contrast, we first assess separately the manufacturer
firm and distributor firm perspectives on working
partnerships. Then we assess the commonalities and
differences across perspectives.
ceived dependence on a working relationship, we contend that the firm's perception of its dependence relative
to its partner's dependence on the relationship is a
construct of greater interest in channels research. It is
this relative dependence that determines the extent to
which a firm will have influence over, and be influenced by, its partner. Relative dependence can be defined as a firm's perceived difference between its own
and its partner firm's dependence on the working part-
nership. This relative dependence construct is supported by previous conceptual and empirical work on
interdependence (Cadotte and Ster 1979; Robicheaux
and El-Ansary 1976), countervailing power (Etgar
1976), and "power advantage" (Emerson 1962).
A primary consequence of relative dependence is
influence, or power. The conceptualizations of "interfirm power," "potential for influence," and "achieved
A Model of Working Partnerships
influence" advanced by Frazier (1983b; Frazier and
Building on previous work in social exchange theory
(Kelley and Thibaut 1978; Thibaut and Kelley 1959)
and interorganizational exchange behavior (Anderson
and Narus 1984; Cadotte and Stem 1979; Frazier 1983a;
Robicheaux and El-Ansary 1976) and melding this work
with a series of interviews with 20 manufacturer firm
and distributor firm managers, we constructed a comprehensive model of ongoing, working partnerships in
marketing channels (Figure 1). Like previous conceptual models in this area (e.g., Cadotte and Ster 1979;
Dwyer, Schurr, and Oh 1987; Frazier 1983a;
Robicheaux and El-Ansary 1976), this model is meant
to apply to both manufacturer firm and distributor firm
perspectives on working partnerships. The rationale is
that both firms are participants in the same exchange
relationship and, though they differ in the marketing
functions they perform, symmetry is expected in the
behavioral constructs that underlie the relationship. In
contrast, differences between manufacturers and distributors are expected in terms of the indicators that
reflect these constructs and the presence or relative
strengths of the posited construct relationships. Finally, the constructs in this model are conceptualized
as firm-level representations of the critical factors in
working partnerships.
Summers 1984, 1986; Frazier and Sheth 1985), which
are compatible with social exchange theory, appear to
offer the most managerially germane theoretical explanation of the channel power phenomenon. Building upon this work, we use the constructs influence
over the partnerfirm and influence by the partnerfirm
to reflect the interdependent nature of working partnerships and the resultant need to have one's partner
firm take actions that can bring about (directly or indirectly through facilitation) better outcomes for one's
own firm. These constructs represent the extent to which
a firm has applied its power to induce desired actions
by its partner firm. By doing so, a firm can "shape
its relationship with another firm" (Frazier 1983a). This
conceptualization of the influence constructs also is
consistent with the concept of behavioral control (cf.
Anderson and Narus 1984; Kelley and Thibaut 1978),
where by varying its own actions, a firm can make it
in the best interest of the partner firm to covary its
actions.
We predict a positive link between relative dependence and influence by the partner firm and a negative
link between relative dependence and influence over
the partner firm. Specifically, we contend that the firm
with greater relative dependence has, by definition,
relatively greater interest in sustaining the relationDependence and working partnerships. Depen- ship, and that one way to do so is to be more receptive
dence, influence (i.e., power), and conflict are per- to requests and amenable to changes suggested by its
haps the most widely studied aspects of channel work- partner firm. In contrast, the firm with lesser relative
ing partnerships (Frazier 1983a; Heide and John 1988). dependence can use its superior position to request
Dependence on the working partnership is concep- changes of its partner that it believes will either mu-
tualized for each firm as outcomes given comparison
levelfor alternatives (CLat) (cf. Anderson and Narus
1984; Kelley and Thibaut 1978). CLalt in this context
is a standard that represents the overall quality of out-
comes (economic, social, and technical) available to
the firm from the best alternative exchange relation-
ship. Rather than simply considering a firm's per-
tually increase the outcomes of both partners or singly
increase its own outcomes from the relationship (which
will have the effect, though, of moving the relationship toward parity in relative dependence). These relationships are supported by substantial conceptual and
empirical work (e.g., Frazier and Summers 1986; Gaski
1984).
A Model of Distributor Firm and Manufacturer Firm Working Partnerships / 43
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FIGURE 1
Model of Manufacturer and Distributor Working Partnerships
In our model, conflict represents the overall level sessment of the results (rewards obtained minus costs
of disagreement in the working partnership (for a re- incurred) from a given working partnership in com-
view of channel conflict research, see Reve and Ster
parison with expectations based on present and past
1979). As such, conflict is determined by the fre-experience with similar relationships, and knowledge
quency, intensity, and duration of disagreements. Onof other firms' relationships (Anderson and Narus
the basis of past research (Frazier 1983a; Gaski 1984), 1984).
we predict a positive causal relationship between inClosely linked with outcomes given comparison
fluence by the partner firm and the level of conflict level is the construct communication, which can be
in the working relationship. Conversely, we posit adefined broadly as the formal as well as informal sharnegative causal relationship between influence overing of meaningful and timely information between firms
the partner firm and conflict (Gaski 1984). The greater(Anderson and Narus 1984). This definition has as its
the influence a firm has over its partner firm, the lessfocus the efficacy of information exchange rather than
conflict the firm encounters because it is in the best
the quantity or amount, and the construct inherently
interest of the partner to comply with the firm's retaps past communications. That is, an informant who
quests for action.
is asked to characterize his or her firm's communi-
cation with a partner firm reflects on recent past exCoordinating efforts in working partnerships. In
perience between the firms.
this section, we consider constructs that underlie the We predict a positive correlation between outprocess of working together within a partnership. Becomes given comparison level and communication
cause our modeling efforts focus on ongoing partner(Anderson and Narus 1984). An explanation for this
ships, we begin with the current evaluation of past
prediction is reciprocal facilitation, whereby attaining
relationship outcomes. The construct that captures this
outcomes that surpass the comparison level facilitate
evaluation is outcomes given comparison level (CL),
good communication between firms and communiwhich is a focal construct of social exchange theory
cation facilitates achieving outcomes that surpass the
(cf. Kelley and Thibaut 1978; Thibaut and Kelley
comparison level. We also predict a positive corre-
1959). Outcomes given CL is defined as a firm's as-lation between relative dependence and outcomes given
44 / Journal of Marketing, January 1990
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CL, based on the conceptualizations of CLalt and CL
given by Thibaut and Kelley (1959), whereby outcomes available from the best alternative relationship
are a part of the firm's experience and so contribute
to the firm's expectations.
Trust in a working relationship and its implica-
tions for a firm's actions have been defined as "the
firm's belief that another company will perform actions that will result in positive outcomes for the firm,
as well as not take unexpected actions that would result in negative outcomes for the firm. The strength
of this belief may lead the firm to make a trusting
response or action, whereby the firm commits itself
to a possible loss, depending upon the subsequent actions of the other company" (Anderson and Narus 1986,
p. 326). Trust still will be maintained, however, if the
firm believes its partner has taken the expected actions, but that forces beyond its control have negated
the expected outcomes. Some care must be taken,
though, in generalizing trust as a construct in interpersonal relations to trust in working partnerships. In
of communication as a construct, we posit that at any
one point in time, (inherently past) communication
causes (present) trust.
Considering the consequences of trust, we posit a
positive causal path from trust to cooperation (cf.
Anderson and Narus 1986; Dwyer, Schurr, and Oh
1987). Cooperation is defined here as similar or com-
plementary coordinated actions taken by firms in in-
terdependent relationships to achieve mutual out-
comes or singular outcomes with expected reciprocation
over time. Once trust is established, firms learn that
coordinated, joint efforts will lead to outcomes that
exceed what the firm would achieve if it acted solely
in its own best interests. In addition, within the context of a trusting relationship, firms sometimes are
willing to postpone temporarily the receipt of their own
outcomes until some later time. Managerial interviews underscored the important role of this notion of
expected reciprocity in channel partnerships.
Another posited consequence of trust is functionality of conflict, which can be defined as an evaluative
interpersonal relations, participants expose them-
appraisal of the results of recent efforts to resolve dis-
selves and their own resources to potential loss whereas
in interorganizational relations, it is the firm that potentially will incur the loss. Trust as a construct in
agreements (Rosenberg and Ster 1970; see also
Robicheaux and El-Ansary 1976; Rosenbloom 1973).
channel partnerships therefore may entail less intensity and personal commitment.
We posit a positive path from outcomes given
comparison level to trust. The rationale is that a re-
view of past results in comparison with expectations
leads to the firm's prediction or estimate of the extent
to which the partner firm will follow through on its
current promises. On the basis of these estimates, the
firm engages in or refrains from trusting responses or
actions. Ample support for this causal link can be found
in social science research reviewed by Anderson and
Narus (1986), the conceptual work of Dwyer, Schurr,
and Oh (1987), and the managerial interviews we con-
ducted.
Though the link between communication and trust
has received attention (e.g., Bialaszewski and
That is, in the minds of a firm's managers, to what
extent have recent disagreements with a partner firm
been productively resolved? When partner firms use
disagreements as a means of "clearing the air" of po-
tentially harmful tensions and ill-will, conflict can have
functional and productive consequences. By making
conflict functional, partner firms maintain cordial relations and tend to give each other the "benefit of the
doubt" in conflict episodes (Hardy and Magrath 1988).
We believe that firms that have developed strong trust
in a relationship are more likely to work out their disagreements amicably and, in fact, accept some level
of conflict as being "just another part of doing business." This view is shared by Dwyer, Schurr, and Oh
(1987).
We further hypothesize a negative causal relationship between functionality of conflict and conflict.
Firms that have the ability to resolve conflicts have a
Giallourakis 1985), researchers do not agree on the
direction of the relationship. For instance, Dwyer, lower overall level of conflict in their working part-
Schurr, and Oh (1987) hypothesize that trust causes
communication, whereas Anderson, Lodish, and Weitz
(1987) contend that communication leads to trust. Our
interpretation is that building and sustaining working
partnerships is an iterative process. Meaningful communication between firms in a working partnership is
a necessary antecedent of trust (cf. Anderson and Narus
1986). In subsequent periods, however, this accu-
mulation of trust leads to better communication. Our
model is meant to represent the working partnership
at one period of time. That is, it is a static model that
provides a single-time-period perspective of ongoing
partnerships, in contrast to a dynamic model or intertemporal perspective. Therefore, and given the nature
nerships, in part because there are fewer recurring
conflicts. Another rationale is that partner firms that
have functional conflict frame the issues differently
(Tversky and Kahneman 1981); conflict is seen as
"productive discussion" rather than an "argument."
Support for this path also is found in the work of
Robicheaux and El-Ansary (1976) and Frazier (1983a).
Sustaining satisfaction in working partnerships.
Satisfaction has been defined as "a positive affective
state resulting from the appraisal of all aspects of a
firm's working relationship with another firm"
(Anderson and Narus 1984, p. 66). Note that satis-
faction is affective and can be contrasted with an ob-
A Model of Distributor Firm and Manufacturer Firm Working Partnerships / 45
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jective or "rational" summary assessment of outcomes, as captured by the concept of outcomes given
comparison level (cf. Thibaut and Kelley 1959). Because of this conceptualization, a positive causal relationship is posited from outcomes given CL to sat-
isfaction.
Satisfaction is the focal consequence of working
partnerships in our model, which is consistent with
past interorganizational exchange models (e.g.,
Anderson and Narus 1984; Frazier 1983a; Frazier,
than 110 industries. A total of 504 wholesaler-distrib-
utor firms returned completed, usable research-information forms.
The research design called for each distributor firm
to evaluate its working partnership with one manufacturer firm. Preliminary field interviews revealed that
the working relationships with manufacturer firms that
supplied the first- or second-highest-selling product
lines tended to be uniformly positive, whereas relationships with the fourth manufacturer firms were more
Spekman, and O'Neal 1988). We contend that satis-variable. To avoid potential restriction in range prob-
faction, by its nature, is not only a close proxy for lems (Lord and Novick 1968) and to facilitate obtainconcepts such as perceived effectiveness, but also may ing variation in the relationships studied, the distribbe more predictive of future actions by partner firm utor executives were asked to specify as their
managers. Further, satisfaction has been found to leadmanufacturer partner the firm that supplied the fourthto the long-term continuation of relationships (Gladstein highest-selling product line and accounted for at least
1984).
5% of their total sales. As the typical distributor may
We posit a positive causal relationship between inrepresent more than 100 product lines, however, the
fluence over the partner firm and satisfaction and a
fourth relationships were still of considerable importance to the distributor. If the distributor firm did not
negative causal relationship between influence by the
carry four lines or if the fourth line did not account
partner firm and satisfaction (Dwyer 1980; Wilkinson
for at least 5% of total sales, the executives were in1979). Firms that perceive that they are "calling the
shots" in a relationship will experience greater satisstructed to use the manufacturer of the third-highestfaction. Conversely, given that firms often perceive
selling product line, and so on.
some cost in complying with a partner's requests, either
The research design also called for multiple in-
in taking some action or in foregoing some other positive outcomes, a firm will experience lower satisfac-
formants for each manufacturer firm and distributor
firm. The distributor executives were asked to name
tion to the extent that it perceives that it is influenced
the highest-level manager at the manufacturer firm with
by its partner firm. We further posit a negative causal
link between conflict and satisfaction (cf. Frazier 1983a;
Gaski 1984). Disagreements tend to block achievement of the firm's goals, eliciting frustration, and
thereby cause feelings of unpleasantness about the
partnership.
whom they dealt, as well as the operational-level
manager with whom they interacted most frequently.
Finally, they were asked to name the operational-level
manager in their own firm who interacted with this
manufacturer firm most frequently. Thus, the unit of
analysis for the study was the firm, represented by
Finally, we predict a positive path from cooperation to satisfaction. Working together with a partner
two informants.
Of the 504 sets of manufacturer and distributor firms
firm in pursuit of mutual benefits increases each firm's
perceptions of compatibility with its partner firm. This
mailed questionnaires, 16 returned the questionnaires
uncompleted (six partnerships had been terminated,
eight distributor firms had gone out of business, and
two manufacturer firms had gone out of business).
Therefore, the effective sample size was reduced to
perceived compatibility, as well as the fulfillment as-
sociated with attaining desired outcomes, affords a
strong feeling of "chemistry" and results in satisfaction with the partnership. This path has received longtime support from channels analysts (e.g., Dwyer 1980;
Mallen 1963; Sibley and Michie 1982).
Method
488 sets of firms or 1952 informants.
A total of 1365 informants completed and returned
questionnaires, an overall response rate of 70%; the
response rate was 75% (730) for distributors and 65%
(635) for manufacturers. The average percentage of
distributor firm sales accounted for by the evaluated
manufacturer firm was 16.8%. Of primary interest are
the 253 distributor firms and 217 manufacturer firms
Respondent Samples
To construct the samples of distributor firms and man-
for which both informants in each firm responded.
A critical assumption in multiple-informant recation Foundation (DREF) initially mailed letters to search is that random measurement errors across in-
ufacturer firms, the Distribution Research and Eduthe chief executive officers of 5000 member firms of
the National Association of Wholesaler-Distributors
formants' reports are uncorrelated. This assumption
will hold if the two informants independently answer
(NAW) inquiring about their firm's interest in partic-the questionnaire. If there is collusion in answering
ipating in the research. These firms represent more the measures or if only one individual answers both
46 / Journal of Marketing, January 1990
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questionnaires, the errors are likely to be correlated.
To assess this independence assumption, a correlation
between informants in each firm was computed across
responses to 55 questionnaire items (four measures for
each of the 10 constructs, plus 15 additional items that
were common across questionnaires). The two infor-
posited working partnership model in Figure 1.
Finally, a multiple-sample analysis was performed
to compare the manufacturer firm and distributor firm
perspectives (J6reskog 1971). Figure 2 is an overview
of the model-building task. For further exposition of
this confirmatory model-building approach, see
mants for four distributor firms and four manufacturer
firms had correlation coefficients greater than .99. Inspection of the two informant reports from each of
these eight firms revealed identical responses to all 55
questions in seven cases and only one response different in the eighth. As the independence of response
assumption appeared untenable for these firms, they
were eliminated from consideration. Thus, the final
samples for analysis consisted of 249 distributor firms
and 213 manufacturer firms.
Anderson (1987). The LISREL program (J6reskog and
Sorbom 1984) was used throughout for model esti-
mation.
Respecification. Two kinds of respecifications were
made. First, two measures were respecified as being
related to a single underlying indicator if the correlation between their original two indicators was not
significantly different from 1.0, suggesting that the
informants had not differentiated the indicators from
one another, and this finding was supported by content considerations. Support for these respecifications
Procedure
also was provided by the similarity coefficient (cf.
Preliminary field interviews were conducted with apAnderson and Gerbing 1982) for the two indicators.
proximately 20 manufacturer firm managers and disThe other respecification was elimination of meatributor firm managers. On the basis of these discussures, which was done under three circumstances. First,
sions, two questionnaires-one for manufacturer firms
measures were eliminated if perceptual agreement was
and one for distributor firms-were constructed to be
as parallel as possible. Four measures were included
for each of the 10 constructs in Figure 1. Both versions of the questionnaire were pretested with 15 distributor managers and manufacturer managers. In ad-
dition, the 12-person DREF Board of Directors
reviewed the drafts and offered comments on im-
provements.
Each of the 2016 individuals whose names were
obtained on the research-information forms was mailed
FIGURE 2
Overview of the Model-Building Task
I. COMPOSITION MODEL - SPECIFIES THE FUNCTIONAL
RELATIONSHIP BETWEEN MEASUREMENTS TAKEN FROM
MULTIPLE INFORMANTS AND THEIR CORRESPONDING
ORGANIZATION-LEVEL INDICATORS (OF CONSTRUCTS).
PROVIDES AN ASSESSMENT OF THE PRECEPTUAL
AGREEMENT BETWEEN INFORMANTS WITH RESPECT TO
EACH MEASURE.
under separate cover the appropriate version of the
questionnaire. An envelope addressed to one of the
researchers was enclosed. Two followup mailings were
sent to nonresponding informants. As a followup to II. ORGANIZATIONAL MEASUREMENT MODEL - RELATES THE
the research, several field interviews and two focus
INDICATORS TO THEIR POSITED, UNDERLYING ORGANIZA-
group interviews were conducted to gain additional
understanding of the results and to compare the re-
TIONAL CONSTRUCTS. PROVIDES AN ASSESSMENT OF
CONVERGENT VALIDITY AND DISCRIMINANT VALIDITY.
search-based explanations with those from the every-
day experience of managers (cf. Calder 1977).
Analyses
Modeling approach. The approach for confirmatory III. ORGANIZATIONAL STRUCTURAL MODEL - RELATES THE
measurement and structural equation modeling of or-
ganizational properties recently given by Anderson
(1987) was used. First, a confirmatory composition
model specified the functional relationship between
CONSTRUCTS TO ONE ANOTHER AS SPECIFIED BY THEORY
AND PAST RESEARCH. PROVIDES AN ASSESMENT OF
NOMOLOGICAL VALIDITY.
measurements taken from the two informants per firm
and their corresponding organization-level indicators
- SAMPLE ANALYSIS - GIVES AN ASSESSMENT
(of the organizational constructs). A confirmatory IV. MULTIPLE
OF THE COMMONALITIES AND DIFFERENCES BETWEEN
measurement or factor analysis model (cf. Joreskog
and Sorbom 1984, p. 1.9-10) next related the indi-
DISTRIBUTOR FIRMS AND MANUFACTURER FIRMS WITH
RESPECT TO THE SUBSTANTIVE, THEORETICAL MODEL
OF INTEREST.
cators defined in the composition model to their posited underlying organizational constructs. A confirmatory structural model then was used to assess the
A Model of Distributor Firm and Manufacturer Firm Working Partnerships / 47
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not significant (cf. James 1982), as revealed by a nonsignificant pattern coefficient for one or both informants on the underlying indicator. Second, multidimensional measures were eliminated. Such measures
practical sense as indicated by the normed fit index
(cf. Bentler and Bonett 1980) value of .86. This value
means that 86% of observed-measure covariation is
explained by the composition model (Anderson and
have underlying indicators that exhibit a pattern of Gerbing 1988). Further reinforcing this judgment are
correlations not significantly different from 1.0 withthe GFI value of .87 and the standardized RMR value
several indicators of different posited constructs. Fi-of .042, both of which are comparable to values exnally, measures that were not unidimensional were pected from sampling error (cf. Anderson and Gerbing
eliminated; that is, the presence of large normalized 1984). Though two normalized residuals remain that
residuals (Joreskog and Sorbom 1984) signalled that
have absolute values greater than two, the largest one
the alternate measures (from the two informants) could is only 2.32. Table 1 is a summary of the final comnot be related to an underlying indicator in a consis-position model for distributor firms.
tent way (cf. Gerbing and Anderson 1988).
All pattern coefficients relating the measures to their
It is important to note that respecifications in theunderlying indicators are positive and statistically sigcomposition model, as well as in the organizationalnificant, indicating perceptual agreement between inmeasurement model, are made independently of con-formants on each of the organization-level indicators.
siderations of the substantive, structural model. This Note that no hypothesized indicators of conflict
fact is a critical relative strength of staged estimation(CONFL) are able to be defined. The estimated corapproaches (cf. Anderson 1987) in comparison withrelation/covariance matrix for the indicators then bea "one-step" estimation approach whereby the com- comes the input covariance matrix for the organizaposition, measurement, and structural models are es-tional measurement model.
timated at the same time. In a staged approach, an
Organizational measurement model. After several
adequate goodness of fit for the composition model
respecifications, a final measurement model for disimplies nothing about the subsequent goodness of fit
(or need for respecification) of a posited measurementtributor firms was obtained that is judged to provide
acceptable goodness of fit, though its associated chi
model, just as in turn an adequate goodness of fit for
the measurement model implies nothing about thesquare value remains statistically significant (X13) =
89.27, p < .001). This judgment is based on mean-
subsequent goodness of fit (or need for respecificaingful interpretability of the model in terms of content
tion) of a posited structural model.
and theory, an acceptable value of .92 for the normed
fit index, and the absence of normalized residuals with
Results
absolute values greater than two. This judgment is
supported further by a GFI value of .95 and an RMR
value of .032. The parameter estimates for this meaDistributor Firm Perspective
surement model are reported in Table 2. Note that the
Composition model. After a series of respecifications
single indicator hypothesized to be related to satisfacguided by goodness-of-fit information in conjunction
tion (SATIS) was found to be multidimensional and
with content considerations, a final composition model
for the 249 distributor firms was obtained. This model was not retained. This final measurement model, which
can be thought of as a "saturated" structural model
retains 42 of the 80 measures and yields 17 organi(cf. Bentler and Bonett 1980) because each construct
zation-level indicators. Though the chi square goodis related to every other construct, served as a base
ness of fit is still statistically significant (X64) =
model for assessments of the structural model when
814.74, p < .001), this model is judged to provide
the measurement and structural submodels were esacceptable fit.' The bases for this judgment are that
timated simultaneously (cf. Anderson and Gerbing
this model has relatively unambiguous meaning in terms
1988).
of content and has acceptable goodness of fit in a
Organizational structural model. The initial struc'To provide a basis for comparison, eight-measure models, contural model, specified from the posited relationships
sisting of the four posited measures of each construct taken across the
in Figure 1, gave relatively poor goodness of fit
two informants, were estimated. These models are comparable to the
ones reported by Phillips (1981, Figure 2). For distributor firms,(X35)
six
= 341.30, p < .001). Several respecifications
of the 10 "single-construct" models have chi square goodness-of-fit
were made that were indicated in terms of goodness
values that are not significant (p > .05), two that have significant
of fit and made theoretical sense. Of perhaps greatest
values for chi square have acceptable values for GFI (.987 and .983)
and RMR (.028 and .046), and two are nonconvergent because of
a
interest
is the respecification of cooperation (COOPER)
lack of external consistency of the two informants on one measure.
as causally antecedent to trust (TRUST) rather than
The point is that what constitutes "acceptable" goodness of fit and
being consequent to it. Though causal ordering is difwhat amounts of respecification are to be expected should be framed
by considerations of the size and complexity of the model (cf. Bentler
ficult to ascertain with cross-sectional data, this resand Chou 1987).
pecified ordering does provide estimates that better re-
48 / Journal of Marketing, January 1990
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TABLE 1
Summary of Final Composition Model for Distributor Firms
Constructa
Indicators Example Measure
Influence b )y ,T Manufacturer X has considerable latitude in deciding how much field sales
partner firr n assistance and technical support they give to our firm for their product line
(7-point scale: strongly disagree/strongly agree)
Relative
T?, T3
dependenc;e
Computed as the difference between: (a) In your judgment, the total costs to
your firm in switching to a competing manufacturer's product line would be
and (b) In your judgment, the total costs to Manufacturer X in
replacing your firm with another distributor in your trade area would be
(5-point scales: prohibitive/negligible)
Communication
Manufacturer X lets our firm know as soon as possible of any unexpected
problems with things such as lead times, delivery schedules, or product
quality (7-point scale: strongly disagree/strongly agree)
Functionality of
Disagreements between Manufacturer X and our firm have the
productivity of our working relationship (5-point scale: considerably
increased/considerably decreased)
conflict
Trust
Based upon your past and present experience, how would you characterize
the level of trust your firm has in its working relationship with Manufacturer
X? (7-point scale: don't trust Manufacturer X/trust Manufacturer X
completely)
Cooperation
T11-T13 Computed as the sum of: (a) Our firm helps out Manufacturer X in whatever
ways they ask and (b) Manufacturer X helps our firm out in whatever ways
we ask (7-point scales: strongly disagree/strongly agree)
Satisfaction
T14 Our firm's working relationship with Manufacturer X has been an unhappy
one (7-point scale: strongly disagree/strongly agree)
Outcomes given
comparison level
T15 The financial returns our firm gets from Manufacturer X's product line are
what we look for in distributing a product line (5-point scale: greatly
above/greatly below)
Influence over
partner firm
T16, 717
To what extent does Manufacturer X follow whatever recommendations your
firm makes regarding the marketing and selling of their product line? (7-
point scale: not at all/to a great extent)
aPosited as underlying the given organizational indicator(s).
produce the construct correlations, given the pattern
the remaining explanatory ability of the 19 paths th
of posited relationships of TRUST and COOPER withwere constrained to zero is of little practical consetheir antecedent constructs and consequent constructs.
quence, as indicated by a decrement in the normed f
Consistent with this change in causal sequence, paths
index of only .046 for this structural model from th
were added from communication (COMMUN) and
measurement model (from .919 to .873). Second
outcomes given CL (CL) to COOPER. Further, paths
though adding the next path (INFLBY -> TRUST) tha
were added from influence over the partner firm (INwas indicated and could potentially be justified theFLOV) to influence by the partner firm (INFLBY) and
oretically produces a statistically significant differ
to functionality of conflict (FUNCON), and from
ence in goodness of fit (X2(l) = 8.2, p < .005), thi
COOPER to FUNCON.
path is judged not to be of practical significance
The hypothesized correlation between relativethat
de- the magnitude of the estimate is small (332 = -.1
pendence (RELDEP) and CL and the predicted path
and the increment in the normed fit index it provid
from TRUST to FUNCON were not significantis and
only .007.
thereafter were not estimated. This respecified structural model for distributor firms is shown in Figure 3.
Manufacturer Firm Perspective
Though this structural model still has a significant
chi square difference value in comparison with
the
Composition
model. As with the distributor firm model,
measurement model (X2(9) = 51.30, p < .001), after
it isa series of respecifications guided by goodness-
judged to provide acceptable goodness of fit in a pracof-fit information in conjunction with content consid-
tical sense. There are two bases for this judgment.
erations, a final composition model for the 213 manFirst, this structural model provides adequate explaufacturer firms was obtained. This model also retains
nation of the construct covariances; put differently,
44 of the 80 measures and yields 17 organization-level
A Model of Distributor Firm and Manufacturer Firm Working Partnerships /49
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TABLE 2
Final Organizational Measurement Model for Distributor Firms
Constructa Indicator
Indicator INFLBY RELDEP COMMUN FUNCON TRUST COOPER CL INFLOV Specificity
L1 .995 (.00)b 0c 0 0 0 0 0 0 .01 (.09)
12 0 .995 (.00) 0 0 0 0 0 0 .01 (.09)
15 0 0 .82 (.06) 0 0 0 0 0 .33 (.04)
L6
17
9L
0 0 .88 (.05) 0 0 0 0 0 .24
0 0 0 .995 (.00) 0 0 0 0 .01
0 0 0 0 .995 (.00) 0 0 0 .01
(.04)
(.09)
(.09)
11 0 0 0 0 0 .83 (.05) 0 0 .32 (.04)
L12 0 0 0 0 0 .90 (.05) 0 0 .19 (.03)
L15 0 0 0 0 0 0 .995 (.00) 0 .01 (.09)
16 0 0 0 0 0 0 0 .995 (.00) .01 (.09)
Organizational Construct Estimated Correlation (4D)d
INFLBY RELDEP COMMUN FUNCON TRUST COOPER CL INFLOV
INFLBY 1.000 .066 .069 .065 .065 .068 .064 .066
RELDEP .258 1.000 .070 .064 .064 .068 .064 .066
COMMUN -.126 -.028 1.000 .063 .063 .033 .069 .069
FUNCON -.120 -.051 .563 1.000 .071 .060 .065 .066
TRUST -.211 -.067 .558 .493 1.000 .058 .066 .064
COOPER -.098 -.089 .839 .667 .733 1.000 .067 .068
CL -.074 .080 .178 .153 .245 .328 1.000 .064
INFLOV .213 -.252 .153 .253 -.035 .085 .094 1.000
aParameter estimate with its standard error given in parentheses.
bParameter for constructs with single indicator fixed at .995.
CParameter fixed at zero.
dOrganization construct factor correlations are below the diagonal and
FIGURE 3
Model of Working Partnerships from the Distributor Firm Perspective
Influence over
Partner Firm
-.25
Relative
Dependence
.33
)
.20
Influence
Partner Firm
Communication 79 Cooperation .65 \
Co
opeA
\
Functionality
A~.82 .88 / .83 .91 of Conflict
.82 .88
.18
5
1
6
15/
~ 16
.18
11
12
73
Outcomes Given
Comparison
Levels
Note:
Trust
Indicators
and
thei
-- .-.- -. - r - -- --..., .W. %,WI.. . IOLI U *111 VV iL u i i i LI : inuicaiuiao ir ri e em ining constructs
were each defined by a single indicator with the pattern coefficient set at .995 and the indicator speci
parameter estimates are statistically significant (p < .05). Standardized estimates are given.
50 / Journal of Marketing, January 1990
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indicators. Though the chi square goodness of fit is
still statistically significant (X(722) = 1022.65, p <
.001), this model is judged to provide acceptable fit.2
This judgment is based on a value of .82 for the normed
fit index, a GFI value of .83, and a standardized RMR
value of .046. Though four normalized residuals remain that have absolute values greater than two, the
largest one is only 2.40. Table 3 is a summary of the
final composition model for manufacturer firms.
Again, all pattern coefficients relating the measures to their underlying indicators are positive and
statistically significant, indicating perceptual agreement between informants for each of the organizationlevel indicators. Note that no hypothesized indicators
of the constructs influence over the partner firm (INFLOV) or functionality of conflict (FUNCON) are able
to be defined. The estimated correlation/covariance
matrix for the indicators then becomes the input ma-
2As before, to provide a basis for comparison, eight-measure models,
consisting of the four posited measures of each construct taken across
the two informants, were estimated. For manufacturer firms, seven
of the 10 "single-construct" models have chi square values that are
not significant (p > .05) and three are nonconvergent, two because
of a lack of significant perceptual agreement between the two infor-
mants on one measure and the other because of a lack of external
consistency of the two informants on one measure. Note that Phillips
(1981) also obtained some nonconvergent solutions.
trix for the manufacturer organizational measurement
model.
Organizational measurement model. After several
respecifications, a final measurement model for manufacturer firms was obtained that is judged to provide
adequate goodness of fit, though its corresponding chi
square value remains statistically significant (X22) =
187.29, p < .001). This judgment is based on mean-
ingful interpretability in terms of content and theoretical considerations, an acceptable value of .88 for
the normed fit index, a GFI value of .88, and a stan-
dardized RMR value of .049. Only a single normalized residual has an absolute value greater than two
(-2.76). The parameter estimates for this final measurement model are reported in Table 4.
Organizational structural model. The initial struc-
tural model, again specified from the posited relationships in Figure 1, gave relatively poor goodness
of fit (X41) = 334.52, p < .001). Several respecifications were made that were indicated from goodness
of fit information and made substantive sense. As with
the distributor firm perspective, COOPER was respecified as causally antecedent to TRUST, rather than
being consequent to it. Consistent with this change in
causal sequence, paths were added from COMMUN
and CL to COOPER. However, in this model, a direct
TABLE 3
Summary of Final Composition Model for Manufacturer Firms
a.^
_
construct-
.m
Influence by
.
..
Indicators
T1, T2
partner firm
Relative
dependence
Example Measure
-- - - - - - u- - -- - - --- -1 -
Firm X exerts influence over the way our company markets our
product line through their firm (5-point scale: a great deal of/next to no)
73, 74
Communication
Computed as the difference between: (a) There are other manufacturers
available to Firm X who sell product lines comparable to those of our
company and (b) There are other distributors in Firm X's trading area who
could provide comparable distribution for our company's products (7-point
scales: strongly disagree/strongly agree)
Firm X lets our company know as soon as possible of any unexpected
problems they are experiencing with such things as poor cash flow or other
financial difficulties (7-point scale: strongly disagree/strongly agree)
Conflict
Firm X and our company have significant arguments in our working
relationship (7-point scale: strongly disagree/strongly agree)
Trust
Based upon your past and present experience, how would you characterize
the level of trust your company has in its working relationship with Firm X?
(7-point scale: don't trust Firm X/trust Firm X completely)
Cooperation
T13, T14
Outcomes given
Computed as the sum of: (a) Our company helps out Firm X in whatever
ways they ask and (b) Firm X helps our company out in whatever ways we
ask (7-point scales: strongly disagree/strongly agree)
T15, T16
Overall, how would you characterize the results of your company's working
comparison level
Satisfaction
relationship with Firm X? (7-point scale: it has fallen far short of
expectations/it has greatly exceeded our expectations)
T17
Our company's working relationship with Firm X has been an unhappy one
(7-point scale: strongly disagree/strongly agree)
aPosited as underlying the given organizational indicator(s).
A Model of Distributor Firm and Manufacturer Firm Working Partnerships / 51
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TABLE 4
Final Organizational Measurement Model for Manufacturer Firms
Constructa Indicator
Indicator INFLBY RELDEP COMMUN CONFL TRUST COOPER CL SATIS Specificity
L1 .995 (.0)b C 0 0 0 0 0 0 0 .01 (.10)
L4 0 .995 (.00) 0 0 0 0 0 0 .01 (.10)
L6
L7
L8
L9
,11
0
0
0
0
0
0
0
0
.63
(.07)
0
0
0
0
.91
(.07)
0
0
0
0
0
.995
(.00)
0
0
0
0
.95
(.05)
0
0
0
0
0
0
.61
.17
.01
.10
(.07)
(.07)
(.10)
(.02)
0 0 0 0 .88 (.05) 0 0 0 .22 (.03)
0 0 0 0 .81 (.06) 0 0 0 .35 (.04)
0 0 0 0 0 .995 (.00) 0 0 .01 (.10)
L15 0 0 0 0 0 0 .995 (.00) 0 .01 (.10)
i17
0
0
0
0
0
0
0
.995
.01
(.10)
L12
113
Organizational
Construct
Estimat
INFLBY RELDEP COMMUN CONFL TRUST COOPER CL SATIS
INFLBY 1.000 .078 .074 .069 .071 .076 .077 .070
RELDEP .520 1.000 .072 .070 .071 .073 .073 .071
COMMUN .295 .499 1.000 .073 .052 .072 .072 .073
CONFL .019 -.183 -.414 1.000 .059 .076 .076 .082
TRUST .144 .196 .668 -.778 1.000 .066 .062 .064
COOPER .456 .349 .452 -.437 .548 1.000 .086 .073
CL .481 .336 .475 -.456 .670 .731 1.000 .076
SATIS .079 .214 .348 -.644 .628 .347 .459 1.000
aParameter estimate with its standard error given in parent
bParameter for constructs with single indicator fixed at .995.
CParameter fixed at zero.
dOrganization construct factor
correlations
are below the dia
standard errors
are above the diagonal.
path from COMMUN to TRUST was still indicated.
working partnerships, two alternative multiple-sample
Paths were added from CL to INFLBY, TRUST to
models were estimated. First, we estimated a model
CONFL, and INFLBY to COOPER; also, a correlahaving no constraints across samples on the structural
tion parameter (421) was added between RELDEP and parameters. As this model gives the lowest chi square
COMMUN. The hypothesized direct path from IN-goodness-of-fit value that could be obtained with any
FLBY to SATIS was not significant and thereafter was model that has equality constraints, it provides the ba-
not estimated.
sis for judging the acceptability of models in which
This respecified structural model provides an ad- equality constraints are specified. We then estimated
equate explanation of the construct covariances, thougha model in which the five relationships that the disits goodness-of-fit difference from the measurementtributor firm and manufacturer firm structural models
model is statistically significant (X2() = 27.81, p <have in common were constrained to be equal across
.01). As in the distributor firm results, there is no lossthe two samples: RELDEP -- INFLBY, COMMUN
in explanation of practical consequence from con----> COOPER, CL -- COOPER, COOPER -> TRUST,
straining the remaining 13 paths to zero, as indicatedand the correlation between COMMUN and CL.
by a decrement in the normed fit index of only .017 The unconstrained model gives a chi square value
(from .885 to .868).3 The parameter estimates for thisof 355.67 (d.f. = 67, p < .001). Note that this chi
final model are reported in Figure 4.
square value and degrees of freedom are equal to the
respective sums for the structural models estimated
Multiple-Sample Analysis
To assess the commonalities and differences in man-
ufacturer firm and distributor firm perspectives on
separately for the two samples. The model with equality constraints on the five common relationships pro-
vides a chi square value of 416.29 (d.f. = 72, p <
.001). Of most interest here, though, is the rejection
of the hypothesis that these five relationships are in-
3Nonetheless, to provide another comparison model (as was done with
distributor firms), the manufacturer firm structural model that repre-variant across the two samples (X5) = 60.62, p <
sented the next-most-likely theoretical alternative was estimated. Adding .001). Relaxing the equality constraints on the COM-
a direct path from COOPER to SATIS did not result in even a staMUN -> COOPER and COOPER --- TRUST paths,
tistically significant improvement in goodness of fit (X2 = 1.59,
p > .05). Hence, the more parsimonious respecified structural modelin turn, results in a nonsignificant chi square differ-
was judged to give the best representation of the manufacturer firm ence value (Xd(3) = 2.44, p > .25). Hence, the RELperspective.
DEP -> INFLBY and CL -> COOPER paths and the
52 / Journal of Marketing, January 1990
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FIGURE 4
Model of Working Partnerships from the Manufacturer Firm Perspective
Note: Indicators and their pattern coefficients are depicted only for constructs with multiple indicators. The remaining construc
were each defined by a single indicator with the pattern coefficient set at .995 and the indicator specificity set at .01. A
parameter estimates are statistically significant (p < .05). Standardized estimates are given.
correlation between COMMUN and CL can be conplications for marketing practice.
sidered invariant across the distributor firm and man-
ufacturer firm samples. The structural parameter es-Implications for Channels Research
timates for this constrained model are reported in Table Theory development. Substantively, the final respe5. Note that the COMMUN -> COOPER and COOPER
cified structural models represent acceptable expla-
TRUST paths differ only in magnitude across the
nations of the construct covariances for the distributor
two samples and may reflect the differences in oper-firm perspective and the manufacturer firm perspecationalizations of the constructs across samples.
tive. Outcomes given comparison level and relative
dependence, constructs adapted from social exchange
theory
(Kelley and Thibaut 1978; Thibaut and Kelley
Discussion
1959), along with the construct of communication apWe have attempted to make several contributions
pearto
to be critical exogenous constructs in the explathe knowledge and study of channel relationshipnation
phe- of manufacturer and distributor working part-
nomena. We have provided a more comprehensive,
nerships. Cast within a nomological network that
testable model of manufacturer firm and distributor
encompasses the understudied constructs of trust, co-
firm working partnerships. Substantively, though
the
operation,
and satisfaction and the often-researched
research findings must be viewed as tentative because
constructs of influence and conflict, this social ex-
of the number of respecifications that were necessary,
change perspective appears to offer the basis for a
they provide a rich basis for further theory developcomprehensive model of channel working partner-
ment in this area. We also have applied a research
ships. The construct relationships present in these
method that enables more comprehensive assessments
models contribute to channel knowledge in two ways:
of models composed of firm-level constructs, such
as is gained for the robustness and generality of
support
those that typify channels of distribution. We firstrelationships
dispredicted from past research and the un-
cuss the implications of our research findings
for
anticipated
relationships provide a basis for further
channels research, then briefly speculate on some
imtheory development and research in this area. We limit
A Model of Distributor Firm and Manufacturer Firm Working Partnerships / 53
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Final Structural
Path
TABLE 5
Model for Distributor and Manufacturer Firms
Distributor Firms
Manufacturer Firms
Estimate S.E.
Estimate S.E.
RELDEP - INFLOV (y11)
RELDEP - INFLBY (Y21)a
-.25
.06
.00
.00
.37
.00
.00
.80
.17
.04
.00
.00
.07
.04
.00
.00
.37
.36
.50
.32
.17
.20
.04
.06
.07
.06
.04
.05
.31
.73
.00
.00
.00
.20
.65
.00
.00
.00
.00
.24
.06
.06
.00
.34
.29
.15
-.77
.00
.00
.25
-.41
.00
.06
.06
.05
.05
.00
.00
.08
.08
.46
.33
.24
.06
.06
.05
CL - INFLBY (723)
COMMUN -> TRUST (Y32)
COMMUN - COOPER (Y42)
CL - COOPER (Y43)a
CL - SATIS (Y73)
INFLOV - INFLBY (P21)
COOPER - TRUST (134)
INFLBY - COOPER (142)
INFLBY - CONFL (352)
TRUST CONFL (353)
INFLOV FUNCON (P61)
COOPER - FUNCON (P64)
TRUST - SATIS (173)
CONFL -, SATIS (175)
RELDEP, COMMUN (b21)
RELDEP, CL (b31)
COMMUN, CL (432)a
aParameter estimate constrained
.00
.00
.00
.05
.06
.00
.00
.00
.00
.05
to be equal between distributor firm and manu
facturer
firm
our
discussion
to
the
suppor
actions,
such as closer
bonding with
end-user firms.
specifications
of
greatest
theo
Relative dependence
may be a critical antecedent
to
The
relationship
relative
d
the enactment of
of these dependence-balancing
operaence
by
the
tions.
partner
firm
found
firm
and
distributor
firm
The respecification of greatest
interest in termspe
of
tionship
of
relative
dependen
theory development is the
respecification of cooperpartner
firm
found
for
the
ation as being causally
antecedent,
rather thandist
consupport
our
hypotheses.
A better
con
sequent, to trust. This respecification provided
velopment
is
the
of
relativ
explanation use
of the construct
covariances
for both perpendence
on
the
working
re
spectives. The reason
may be the way in which mandistributor informants think about copendence,
as ufacturer
weand conceptuali
more
fully
the operation
interdependent
and trust. When asked about their perceptions
n
ing
partnerships.
of their firm's trustFurther,
in a working relationship, infor(1962),
we
believe
relative
mants give a present
state report; that is, they an-de
extant
imbalance
in
the
"relat
swered on how
much their
firm trusts the
partner firm
dence.
Consequently,
"individ
at the current point in time. In
contrast, informant retaken
by
each ports
firm
to taprestor
on cooperation implicitly
past cooperation
resented
in
our
model
as
two
in that, when asked about their
perceptions
of their c
the
partner
firm
and
influenc
firm's cooperation
with the partner
firm, informants
contribution from the model for distributor firms is
considered recent past experiences when the two firms
that these two constructs appear to be distinct, thoughhad worked together. That past cooperation is a necrelated, constructs rather than opposite ends of a sin- essary antecedent of present trust is supported by the
gle continuum, supporting the notion of "individual research of Matthews and Shimoff (1979), which found
behavior" by each partner firm.
that trust in two-person exchange relationships develAn intriguing possibility for further theory devel- oped slowly over a number of cooperative exchanges,
opment and channels research is the linkage between even when a contingency was present that made low
relative dependence and the dependence-balancing levels of trust costly. Support also is provided by the
operations proposed by Heide and John (1988). Based work of Frazier (1983a) and Dwyer and Lagace (1986).
on transaction cost analysis, the premise of their work,
Iteratively, cooperation leads to trust which, in turn,
which was supported empirically, is that the more de-leads to a greater willingness to cooperate in the fupendent firm in a working relationship needs to pro- ture, which then generates greater trust, and so on.
tect its transaction-specific assets by taking various Thus, in a static model of working partnerships, co-
54 / Journal of Marketing, January 1990
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operation tentatively appears to be causally antecedent
to trust. To our knowledge, the relationship between
cooperation and trust has not previously been assessed
empirically in marketing channels. Given the critical
nature of these constructs, further channels research
is needed in which these constructs again are embedded in a nomological network. Naturally, longitudinal
research or laboratory studies would better enable researchers to make inferences about the causal ordering
of cooperation and trust.
As a consequence of this change in causal sequence for cooperation and trust, several related re-
There is an implicit tradeoff between making models
of some set of phenomena, such as channel working
partnerships, more comprehensive and the subsequent
ability to obtain "acceptable" goodness of fit for such
"large" models. In discussing this tradeoff, Bentler
and Chou (1987) suggest the heuristic that in areas
where knowledge about the variables is limited (as in
marketing channels), models be limited to, at most,
20 variables. Hence, with three or preferably four
measured variables per construct, a model would contain about five or six constructs. Note, though, that
the use of multiple informants further accentuates this
specifications were made. Direct paths from com-
tradeoff.
munication and from outcomes given comparison level
to cooperation were substituted for those leading to
Future work in channel partnerships might advance in two complementary ways. First, greater
trust, though a direct path from communication to trust
for the manufacturer firm perspective was retained.
The classical work of Deutsch (1958, 1960, 1962) on
the conditions that promote trust and cooperation supports these direct paths.
Finally, the five relationships that the distributor
firm and manufacturer firm structural models have in
common can be thought of as the "core" set of sub-
stantive findings. The multiple-sample analysis re-
vealed that distributor firms and manufacturer firms
share similar perspectives on the positive effect of relative dependence on influence by the partner firm, the
positive effect of outcomes given comparison level (CL)
on cooperation, and the positive correlation between
communication and outcomes given CL. Also, though
knowledge of channels variables can be gained through
more rigorous construct definition, pretesting, and scale
development (cf. Angleitner, John, and Lohr 1986).
Second, longitudinal research would make great contributions to our understanding of these channels variables. Longitudinal research could be directed at sets
of "core" constructs, making possible better inferences about both their development over time and their
causal sequence.
In this research approach, multiple informants
within each firm each respond to several measures for
each construct. This affords a more precise delineation of firm-level constructs from potential sources of
measurement error contained in multiple-informant
reports (cf. Anderson 1987). The crucial component
there are differences in magnitude across perspec- in this representation is informant bias; the extent of
tives, manufacturers and distributors appear to have
its presence determines whether multiple informants
similar perspectives on the positive effect of com- are needed or a single informant is sufficient. Firmmunication on cooperation and the positive effect of
level representation of marketing channel constructs
cooperation on trust. Further study of these relation- necessitates the use of multiple informants unless one
ships, either in greater depth within smaller models or can justify the assumption that informant bias is of no
again embedded within a larger nomological network,
practical consequence. In other words, the individual
is particularly recommended for future empirical reinformant's perceptions of the firm must be reasonasearch in marketing channels.
bly veridical. To enable channel researchers to make
Research approach. We used a structural equation
modeling approach in conjunction with a multiple-in-
a better informed decision on the usage of multiple
versus single informants, further research is needed to
determine the research contexts and marketing chan-
formant method. Structural equation models com- nel phenomena for which informant bias is likely to
posed of a "large" number of constructs have some be substantial, thus necessitating multiple informants.
comparative strengths in terms of their ability to contribute to knowledge and understanding. Though twoor three-construct studies, which characterize much of
past channels research, contribute to our knowledge
of marketing channels, many such studies would have
to be done to investigate systematically all of the construct interrelationships specified by a more compre-
hensive model. Moreover, comprehensive testing of
such models enables one to make more meaningful
assessment of nomological validity (Campbell 1960),
an essential part of construct validity (Cronbach and
Meehl 1955).
Several considerations in employing multiple informants certainly make the research process more
difficult. First, a multiple-informant method involves
the independent participation of two or more individuals at each firm, exacerbating the problem of ob-
taining adequate sample sizes. In addition, as demonstrated in our research, the assumption that the
multiple informants are answering the questionnaires
independently can be untenable for some firms, es-
pecially when mail questionnaires are used. Finally,
the cost of conducting key informant research increases at a rate greater than simply the number of
A Model of Distributor Firm and Manufacturer Firm Working Partnerships / 55
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informants per firm because of incomplete firm participation.
Implications for Marketing Practice
Research findings and the followup qualitative research suggest several ways in which both manufacturer firms and distributor firms can actively manage
their working partnerships. Relative dependence is
found to be a significant antecedent of influence in
the working partnership, which suggests that a less
dependent firm can enact successfully the various in-
fluence strategies (e.g., requests, information exchange) proposed by Frazier and Summers (1984,
1986). A more dependent firm, in contrast, should seek
ways to add value (or reduce cost) to the exchange
planning seems a worthwhile mechanism for bringing
these essential constructs together in practice. Such a
planning process would entail mutually defining performance objectives for each partner, thereby estab-
lishing expectations with which outcomes can be
compared; specifying the cooperative efforts each firm
requires of its partner to attain its objectives; periodic
communication on progress toward the performance
objectives, including discussion of any changes in
marketplace or production conditions that would significantly affect them; and finally a formal retrospective review of each partner's performance. Meeting or
exceeding the performance objectives through cooperation leads to trust and satisfaction with the working
partnership.
for the partner firm at a relatively small cost to itself
Even firms in successful partnerships would readily
acknowledge that disagreements are inevitable. Rather
than allowing these conflicts to run their course ca-
(1988), the more dependent firm can protect its trans-
mediating mechanisms to defuse and settle their dif-
(cf. Narus and Anderson 1987, 1988). At the same
time, as suggested by the work of Heide and John
action-specific assets through various dependence-
balancing actions.
Another implication for marketing practice comes
from consideration of the two social exchange constructs, which can be expressed managerially as out-
comes compared with expectations and outcomes
compared with alternatives. In our experience, firms
typically have only a coarse understanding of how the
outcomes they are providing to partner firms compare
with these two standards. Hence each firm needs to
gain and periodically update its understanding of its
partner firm's requirements or expectations and the alternative outcomes competitors are offering. This understanding then can be translated into responsive programs and systems that enable the partnership to be
mutually satisfying over time.
Trust is a core construct in our model, with antecedents of outcomes given comparison level, communication, and cooperation. Meaningful joint annual
priciously, however, adroit partner firms develop
ferences rapidly. Three such mechanisms can be suggested. First, firms can train their boundary-spanning
personnel (e.g., salespersons, purchasing managers)
to be sensitive to inherent channel relationship trouble
spots (e.g., warranty claims handling). These individuals also should be given appropriate authority to
expedite problem resolution before conflicts escalate.
Second, a distributor council can be established. When
managed successfully, a council serves as a forum for
airing complaints, discussing emerging channel prob-
lems, and developing mutually acceptable solutions.
Finally, an office of distributor ombudsman can be
created (Jacobs 1985). An ombudsman might be a retired distributor, employed by the manufacturer, who
would have credibility with both parties. Serving as a
"friend of the distributor," the ombudsman listens to
distributor concerns, draws upon experience to assist
the manufacturer firm in finding equitable solutions,
and then helps explain those solutions to distributors.
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