A model of trust and compliance in franchise relationships

Despite the danger of franchisee non-compliance as a severe impediment to overall franchise operation and performance, there is currently minimal understanding of the key factors that lead to these behaviors. Using a foundation of relational exchange theory, we construct and test a model that demonstrates how two distinct forms of trust, based upon perceptions of franchisor integrity and franchisor competence, are critical to explaining the roles that relational conflict and satisfaction play in influencing franchisee compliance. Implications of these findings are then demonstrated to have compelling relevance to the effective management of franchise systems.     

Managing customer loyalty through the mediating role of satisfaction in the DIY retail loyalty program

The focus of this study is the determinants of customer loyalty among members of retail loyalty programs. With data collected from a DIY loyalty program in a Central European country (a preliminary sample of 116 club members and a representative sample of 416 members), the study empirically tests the nature of the effect of the quality of personal interactions and perceptions of the quality of the loyalty program on customer loyalty through the mediating variable of customer satisfaction. Although the findings suggest that the quality of personal interactions bears no direct influence on members’ loyalty, it has a stronger influence on members’ satisfaction than the perceived quality of the loyalty program does. Influence on members’ loyalty is stronger from the mediating variable of customer satisfaction than from perceived quality of the loyalty program. This finding confirms the role of customer satisfaction as an important determinant of customer loyalty in the DIY setting. Offering a diagnostic tool in terms of selected direct and indirect determinants influencing customers’ loyalty, the paper also contributes to comprehension of loyalty programs’ effectiveness and members’ responses to the quality of loyalty programs, which contribution provides important implications for management and development of retail loyalty programs.     

The role of trust in buyer-seller conflict management

The present study merges work in the interpersonal relationship and buyer-seller literature to address how trust interacts with attributions to impact the effect of partner communication on conflict resolution perceptions in buyer-seller relationships. Understanding the processes underlying conflict resolution is important given that conflict is inherent in relational exchange and that conflict resolution is related to investments, satisfaction, and commitment. Results of the present research suggest that partner use of editing in communication (the ability to self-censor overreaction to negative behavior) influences conflict resolution efficacy of response through the process of responsibility attribution. Further, the combined influence of attribution of partner blame and trust is important in understanding conflict resolution efficacy of response.     

The Effects of Conflict Types, Dimensions, and Emergent States on Group Outcomes

In this study, we examine three types of conflict (task, relationship, and process) and four dimensions of conflict (emotions, norms, resolution efficacy, and importance) in decision making groups. We also investigate emergent states (e.g., trust, respect, cohesiveness; Marks et al. 2001; Acad Manag Rev 26: 530–547) as mediating the effects of the conflict types and dimensions on group outcomes (productivity and viability). All three types of conflict decreased positive emergent states in groups and this led to a decrease in group viability (the ability of a team to retain its members through their satisfaction and willingness to continue working together; Balkundi and Harrison 2006; Acad Manag J 49: 49–68). This effect was alleviated by resolution efficacy (the belief that the conflict can be easily resolved) regarding process conflict, but could be exacerbated by any negative emotion associated with relationship conflict. Norms that encouraged task conflict also increased positive emergent states within groups, which marginally and positively influenced group performance.     

Relational benefits,their consequences,and customer membership types

The purpose of this research is to develop and test a theoretical model in which customer satisfaction mediates the relationship between a firm's relational benefits efforts (i.e. psychological, social, and special treatment benefits) and customer voluntary performance behaviors. Through a review of literature, a conceptual model was developed and then tested utilizing data collected from 522 hotel restaurant patrons. The results indicated that customer relational benefits influence customer voluntary behaviors, the impact of which is mediated by customer satisfaction. More importantly, it was found that the relationships among relational benefits, customer satisfaction, and customer voluntary performance differ depending on whether the surveyed customers had paid or free memberships with the companies in question. The managerial implications of these findings are discussed in the latter part of this article.     

Guanxi,Communication, Power,and Conflict in Industrial Buyer-Seller Relationships: Mitigations Against the Cultural Background of Harmony in China

Purpose: This research aims to investigate how guanxi influences conflict occurrence and conflict-related behavior in transactions of equipment with state-owned enterprises (SOEs) against the cultural background of harmony in China. The influence of guanxi on conflict-avoidance behaviors is discussed, and a model is proposed depicting the relationship between guanxi, the selection of communication modality, the exercise of power, and manifest conflict.

Methodology/Approach: Data was collected from persons selling equipment in the oil industry. The partial least squares method is applied to analyze the collected data.

Findings: Guanxi at the individual level positively influences the use of informal communication and the exercise of non-coercive power and negatively influences the use of formal communication and the exercise of coercive power at the organizational level. The use of informal communication is inversely related to the intensity of conflict, whereas the use of formal communication and the exercise of coercive power are positively related to the intensity of conflict. The combination of these effects is that the guanxi between representatives of business partners is negatively related to manifest conflict at the organizational level.

Contribution: This empirical research is among the earliest studies attempting to examine how guanxi influences interorganizational conflict occurrence and conflict-related behavior in industrial buyer-seller relationships in China, and it reveals a significant relationship between guanxi and the selection of communication modality, the exercise of power, and the occurrence of conflict in a guanxi-intensive market in China.

Practical Implications: First, our findings will help members of the seller's management team, especially foreign members, to better understand the behavior of their Chinese employees. Secondly, our findings should help sellers improve the effectiveness of their conflict management to increase good word-of-mouth and maximize reorders. Thirdly, our findings should help the purchasing managers of SOEs to better understand how to manage conflict to lower the project risk. Lastly, firms doing business with SOEs should take both cultural and political factors into account in their business activities.     

Business,peace, and world politics: The role of third parties in conflict resolution

With the growing role of the private sector in global politics comes increasing challenges and opportunities, an example of which is conducting business in pre- and post-conflict environments. While the extant business literature discusses the work these actors can do to reduce tensions in conflict zones, the role of these actors is notably absent in studies of conflict resolution. In this article, I offer an overview of the findings on conflict resolution processes by scholars in the field of political science. I then draw from business scholarship and offer an overview of the positive contributions the private sector can and does make toward peace. I conclude by highlighting the problems of having disjointed approaches and offering a conceptual framework for how these distinct approaches can be combined to generate a more comprehensive understanding of conflict resolution.     

Attributions of noncooperative incidents and response strategies: The role of national character

Economic and relational equity in global inter-organizational relationships can be enhanced if partners correctly attribute the cause of noncooperative incidents and employ appropriate response strategies. Integrating attribution theory, national character theory and elements of the inter-organizational management literature, we construct a conceptual framework of global inter-organizational managers’ responses to incidents of noncooperation aimed at maximizing relationship economic and relational equity. A managerial assessment process, emphasizing the importance of inpatriation, is provided to assist firms engaged in global inter-organizational relationships in minimizing attribution error in assessing and responding to noncooperative incidents.     

Internal Audits as a Source of Ethical Behavior,Efficiency, and Effectiveness in Work Units

This study of internal auditors and auditees, who engage in both financial and operational internal audits in Israel, extends theory and research on internal audits in organizational units. It develops and tests a model that examines the role of top management and internal auditors in facilitating learning from internal audits and driving perceived performance improvement. We argue that support from the top management for the internal audit as well as the auditor’s capacity (skills, resources, and behaviors) facilitate learning from audits and help audited units to improve ethicality, efficiency, and effectiveness in organizations. The results of time-lagged survey data provide general support for the hypothesized indirect relationships between auditor capacity, auditor–auditee relational exchanges, learning from audits, and three different perceived performance measures: ethical behavior, efficiency, and effectiveness. We discuss the implications for research on internal audits, proactive learning, ethics, and performance improvement of organizational units in the public sector.     

The Impact of Environmental,Firm, and Relational Factors on Entrepreneurs' Ethically Suspect Behaviors

Entrepreneurs' engagement in ethically suspect behaviors (ESBs) can have seriously negative business and social consequences. Yet what defines entrepreneurs' ESBs remains unclear. Further, little is known about what factors contribute to such behaviors. This study provides conceptual clarification of entrepreneurs' ESBs and examines environmental, firm, and individual factors in relation to them. Results, based on data from 158 Chinese entrepreneurs, indicate that dynamism, firm performance, and relational social capital are all negatively related to ESBs. Firm performance partially mediates the relationship between dynamism and ESBs, and albeit with marginal support, the relationship between entrepreneurs' relational social capital and their ESBs.     

Knowledge-based human resource management practices,intellectual capital and innovation

This paper proposes a conceptual model in which a human resource management (HRM) system of explicitly knowledge-based HRM practices impacts a firm's intellectual capital, producing higher innovation performance. We have empirically tested this idea in a survey dataset of 180 Spanish companies using structural equation modelling (SEM) based on partial least squares (PLS). The results show that intellectual capital positively mediates the relationship between knowledge-based HRM practices and innovation performance and illustrate the pivotal role of human capital in this relationship: knowledge-based HRM practices impact structural and relational capital partially through human capital, and human capital affects innovation performance by enhancing structural and relational capital.     

Modelling the Link Between Management Practices and Financial Performance. Evidence from Small Construction Companies

This paper develops a structural model to investigate the direct and indirect effects of owner–manager and company characteristics and selected management practices on the financial performance of a sample of 218 small Belgian construction companies. The results show that the owner–manager and company characteristics (experience, education, financial knowledge, knowledge of cost accounting, company size and age) have no direct significant impact on financial performance. However, several significant paths have been found between the owner–manager and company characteristics and management practices. As far as the direct effects of the management practices are concerned we observe several significant paths from the management practices to financial performance. Our findings indicate that a model approach by including owner–manager and company characteristics and management practices in an intertwined way is necessary when exploring their effects on small business financial performance.     

A behavioral model of international channel relationships

Purpose: The main purpose of the study is to fill the existing gap in international relationship marketing (IRM) literature by developing and testing empirically a comprehensive conceptual model of firms’ relationship with their marketing channels in export markets. Whereas concepts such as power, conflicts, trust, commitment, and communication have been shown to be related to the economic success of interfirm cooperation in general and buyer–seller relations in particular, the need for a comprehensive model is often expressed in the literature.

Methodology/approach: The authors combine commitment-trust theory with resource-based and knowledge-based view perspectives to develop a new comprehensive conceptual model of firms’ relationship with their marketing channels in export markets. Data from 104 strategic business units in Israel was used to test the model empirically.

Findings: Notably, the model tested explained a higher percentage of the variance in performance. The findings suggest that noncoercive power enhances relationship quality (i.e., communication, trust, and commitment), which in turn improve cooperation and export performance. Conflict had a negative effect on relationship quality. In addition, cooperative conflict management strategies had a positive moderating effect on the conflict— relationship quality link, whereas competitive conflict management strategies had a negative moderating effect on the impact of conflict on relationship quality. Finally, the results suggest that there are strong positive relations between communication and trust and between trust and commitment.

Research implications: The research develops and tests empirically a conceptual comprehensive model of firms’ relationship with their marketing channels in export markets by including major performance drivers. The model incorporates conflict management strategies and combines commitment-trust theory with resource-based view (RBV) and knowledge-based view (KBV), an innovative combination with great explanatory potential. Based on the findings, there is sufficient support for using the suggested model as a new integrative behavioral model that explains channel relationships.

Practical implications: The results indicate that managers should use noncoercive power and cooperative conflict management strategies in order to positively affect relationship quality (i.e., communication, trust, and commitment), which in turn enhances cooperation and export performance.

Originality/value/contribution: The suggested research model presents a novel combination of existing relationship marketing (RM) knowledge with the limited IRM knowledge into a comprehensive IRM model. It includes new relationships beyond those studied before. Integrating and synthesizing results from a large body of conceptual and empirical literature led to the final model. Accordingly, it contributes elements of newness. First, the model includes major antecedents of performance. To the best of our knowledge, this is the most comprehensive model of firms’ relationship with their international marketing channels in export markets. Second, there are almost no studies investigating conflict management strategies neither in RM nor in IRM models. Accordingly, a contribution of this research is incorporating conflict management strategies within the model and analyzing their effects.     

Measuring the Financial Benefits of Cross‐Functional Integration Influences Management's Behavior

While many have suggested that cross‐functional, cross‐firm integration is beneficial, functional managers will have competing priorities and thus different perceptions of its benefits. Performance measurements tend to reward functional behaviors and are often in conflict across functions. Since senior management is held responsible for financial results, the benefits of cross‐functional integration should be measured in financial terms. The supply chain management literature provides little insight about the behavioral changes that can result when managers are provided with financial measures of the value created with customers and suppliers. Using a case study approach, the authors measured value in perceptual and financial terms using pairs of buyer–supplier relationships. In each pair of relationships, one involved cross‐functional teams and the other did not. Managers perceived that the relationships with cross‐functional involvement were more profitable. However, it was not until managers received financial measures showing the impact of joint initiatives on the profitability of each pair of relationships that their behaviors changed with regard to the implementation of cross‐functional relationships with key customers and suppliers. We developed a conceptual model comprised of five theoretical propositions that characterize the role of financial measurements as an enabler of cross‐functional integration and value co‐creation.     

Commitment and conflict in the restaurant industry: Perceptions from the Generation Y viewpoint

This study investigates Generation Y restaurant employees’ perceptions of conflict and the extent to which the presence of management team conflict influences employee organizational commitment. Regression analysis found that perceptions of task and process conflict negatively impact organizational commitment, while relationship conflict was not found to have a statistically significant impact on organizational commitment. This study represents the first attempt to understand the carryover effects of management team conflict on employees and offers insights into the perceptions of the Generation Y restaurant worker. Theoretical and managerial implications of the empirical findings as well as directions for future research are discussed.     

The performance effects of vertical and horizontal subsidiary knowledge outflows in multinational corporations

Horizontal and vertical subsidiary knowledge outflows in multinational corporations (MNCs) are argued to be central to effective MNC performance. Building on the knowledge-based view of the firm, we develop a conceptual model to investigate the performance consequences, determinants and interaction effects due to coordination and control mechanisms, of horizontal and vertical MNC subsidiary knowledge outflows. The hypotheses are empirically tested with a dataset comprised of survey and archival data from over 200 MNC subsidiaries. Results indicate that explicitness and communication positively influence vertical and horizontal subsidiary knowledge outflows and that national cultural distance, centralization, formalization, and specialized resources moderate these influences. We also find that knowledge outflows to headquarters and to peer subsidiaries enhance an MNC's financial performance (i.e., return on assets). The results provide substantive evidence as to how vertical and horizontal knowledge operate within MNCs.     

The Role of Emotions in Envisioning Outcomes in Conflict Analysis

A conceptual framework is proposed that accounts for the role of emotions in shaping conflict behavior. The isomorphism between the characteristics that define and drive conflict and those that engender emotions makes it feasible to reconcile emotions with current conflict analysis techniques. Building on Damasio's somatic markers hypothesis, the concept of possibility facilitates modeling the effects of emotion on the scenarios apprehended by the decision makers. Attention is focused on two subsets of the conventional set of feasible states, the hiddenstates that are invisible because of existing emotions (usually negative), and the possiblestates that are invisible because of missing emotions (usually positive). These new concepts can be incorporated within the Graph Model for Conflict Resolution. A model of the confrontation between the United States and North Korea over nuclear weapons demonstrates that the new concepts can simplify analysis and make new predictions that are consistent with the actual unfolding of events. Our main goals are to draw attention to the centrality of emotion in conflict and to the need for research on the incorporation of emotions into conflict analysis and resolution methods.     

An examination of communication behaviors as mediators in individual‐level interorganizational exchanges

This research attempts to address some of the gaps in our understanding of individual‐level interorganizational exchanges. To this end, a conceptual framework that integrates cooperative norms, communication behaviors, and perceived problem‐solving efficacy is developed. Qualitative and quantitative methodologies were employed to explore relevance and significance of proposed constructs and relationships. Findings support the viability of constructs and proposed relationships. Specifically, communication behaviors were found to mediate the relationship between cooperative norms and problem‐solving confidence to resolve conflict. These results hold implications for future research and management practice. © 2006 Wiley Periodicals, Inc.     

Managing conflict to improve the effectiveness of retail networks

Retailers are becoming involved with networks consisting of multiple firms in order to more effectively perform business activities such as supply chain management. This research develops and tests a framework outlining the effects of conflict in networks and how conflict management can mitigate and exacerbate these effects. A study of 81 simulated networks finds that inter-personal and task conflict have a negative effect on network member satisfaction and desire to be a member of the network. The use of a collaborative conflict management style has a positive effect on satisfaction and desire for continuity, but the effects of accommodative and confrontational styles depend on the level of inter-personal and task conflict present in the network.     

Caving,role playing,and staying home: Shopper coping strategies in a negotiated pricing environment

This interpretive study reveals specific behaviors that shoppers enact in order to cope with the tensions they experience in an environment where negotiated pricing is the expected norm. Consumers experience inner conflict, or tension, when they feel that a pleasant shopping experience may only be attained at the risk of a poor financial outcome. These tensions, derived from 34 depth interviews with auto shoppers, include “truth versus deception,” “self‐presentation versus testing the limits,” and “reciprocation versus looking out for number one.” Some coping strategies emanating from these tensions include using analogies, role playing, and bringing one's own audience. Implications for academicians and retailers are discussed. © 2004 Wiley Periodicals, Inc.