Entry mode choice in China's regional distribution markets: Institution vs. transaction costs perspectives

In this paper, we investigate the entry mode choice of a leading Taiwanese food company in setting up regional distributors in China's 312 sales districts. Our study shows that, in entry mode decisions, the institutional factors are more important than transaction cost considerations. Both formal and informal institutions are considered. Formal institutions refer to government prescribed institutions (laws and regulations), while informal institutions refer to rules prescribed by the industry and the society. Both institutions are shown to affect the entry mode choices but one important type of institution, professional norms, is conspicuously missing in China. Professional norms exert peer pressures on the practitioners in the same profession, forcing their behaviors to conform to a common pattern. In the absence of professional norms, the roles of network ties and mimetic behaviors are heightened and they become a proxy for professional norms. As a foreign enterprise operating in China's local markets, the Taiwanese food company attained legitimacy by forming alliances with local wholesalers and by following its predecessors in selecting organization forms.     

A dyadic approach to the impact of differences in organizational culture on relationship performance

The authors extend previous research on relationship management by investigating the potential effect of differences in organizational culture on relationship performance among 124 dyads. Theory suggests that partner similarity may improve the feeling of we-ness thereby contributing to the perceived success of inter-firm cooperation. The findings reveal that differences in organizational culture are larger in less successful inter-firm relationships, but do not influence the perceived relationship success significantly. Our results suggest that relationship managers should not confuse compatibility with similarity; personal chemistry is important for relationship atmosphere but does not solely depend on similarities. Future research in this area may wish to concentrate on a more complete measure of organizational (sub)culture(s), the different levels of analysis (personal, organizational, dyad), relationship life cycles (stage models) and the role of organizational identity.     

Explaining alliance success: Competences, resources, relational factors, and resource-advantage theory

Business alliances, by filling critical resource gaps, enable firms to have positional advantages that lead to superior financial performance. Some alliances, however, are more successful than others. The three prominent theoretical approaches to explaining alliance success rely on resources, competences, and relational factors. The authors theorize that the three approaches are interdependent and, using resource-advantage (R-A) theory as a framework, develop an integrative model. This model proposes that the three approaches are linked by means of relationships among (1) alliance competence, (2) complementary resources, (3) idiosyncratic resources, and (4) cooperation. A test of the model, using a sample of alliance professionals, finds support for the theory that the three approaches are, indeed, interdependent and that resources, construed in the manner of R-A theory, influence alliance success through positional advantage.     

The impact of e-business infusion on channel coordination, conflict and reseller performance

Manufacturer-reseller interactions are becoming more technology-enabled as channels of distribution increasingly utilize e-business tools on the Internet. This research examines the performance consequences for resellers as these technological advances are applied to distribution activities between channel members. Using a sample of 216 resellers of computer products, the research explores the impact of e-business tools in 2 areas of manufacturer-reseller interactions: supply tasks and demand tasks. The results suggest that e-business in supply tasks increases relationship coordination between manufacturer and reseller, whereas e-business in demand tasks increases coordination as well as conflict within the channel dyad. The increase of conflict constitutes a potential “dark side” of e-business in channel relationships that may provide an explanation for e-business implementation failures and negative returns on investment in technology.     

Diverging expectations in buyer-seller relationships: Institutional contexts and relationship norms

Many firms assume that outsourcing partnerships may allow them to strengthen their overall competitiveness. Lured by its intuitive appeal, several enter into such partnerships, only to realize that they represent a marginal rather than a magical solution to their quest for increasing market performance. An important reason for this is the diverging beliefs and expectations held by both parties in the buyer-seller dyad. The purpose of this contribution is to develop a framework for understanding the divergences in expectations and relationship norms in cross-cultural business relationships among SMEs. We discuss four relational expectations derived from the B2B literature on relational norms for addressing these divergences: Quality, frequency and scope of communication, role specifications and coordination of work nature of planning horizons, and trustworthiness and link these to relationship performance. We explore the proposed impact of diverging relationship norms on relationship expectations using data from an ongoing field study of Danish buyers and Chinese suppliers. We link these diverging expectations to the business practices of Danish buyers and Chinese and their institutional contexts. In the concluding part of the paper, we discuss our findings and outline implications for management and academia.     

The positive effects of relationship learning and absorptive capacity on innovation performance and competitive advantage in industrial markets

This study utilized structural equations modeling (SEM) to explore the positive effects of relationship learning and absorptive capacity on competitive advantages of companies through their innovation performances in Taiwanese manufacturing industry. The results of this study showed that relationship learning and absorptive capacity positively influence upon innovation performances of companies, and further have positive effects on competitive advantages of companies. In addition, this study divided the sample into three groups by the levels of relationship learning and absorptive capacity and found that there was a significant difference of innovation performance among these three groups: ‘Highly Capable Companies’, ‘Medially Capable Companies’, and ‘Lowly Capable Companies’. It is important for ‘Lowly Capable Companies’ to increase both of their relationship learning and absorptive capacity to enhance their innovation performances.     

Transitioning and co-evolving to upgrade value offerings: A competence-based marketing view

This article shows how subcontractors in the steel and metalworking industry can effectively upgrade their customer value offerings. The study intends to identify internal and external drivers for successful transitions. It builds on the IMP's (Industrial Marketing and Purchasing Group) research tradition by looking into value creation and competence-based marketing within business networks. Using qualitative methods, the research identifies ‘ideal’ value-added market positions and relates these to specific competence configurations. It also reveals the need to manage co-evolution with other network partners in order to make a successful transition from basic to value-added offerings. The paper contributes to business marketing science by looking explicitly into the mechanisms of internal alignment when upgrading value offerings (a pre-condition often overlooked in extant literature) and by extending the concept of co-evolution.     

Complaint management expectations: An online laddering analysis of small versus large firms

This study explores complaint management expectations in business relationships, particularly the qualities and behaviours that affect buying companies as part of the complaint handling encounter with a supplier. An exploratory empirical study uses a hard laddering approach which also allows us to compare the expectations of large and small companies to understand size-effects. The research indicates that complaining companies perceive disruptions of their supplier relationships in the context of the business network within which they are embedded, especially vis-à-vis the benefits associated with long-term supplier ties. However, these network concerns are more pronounced for large companies. Issues of effective complaint management in business-to-business settings therefore need to be addressed not just as isolated managerial activities with limited benefits for the parties involved, but should be seen as being part of a wider activity set of strategic networking activities with an impact on whole business systems. Thus, the findings enrich the existing limited stock of knowledge on the context of complaint management in business relationships and networks.     

Twists and turns of triadic business relationship recovery

This study focuses on triadic business relationship recovery processes through a single case study. We address the question of what kind of process takes place when a business relationship on the verge of ending is recovered and what roles a third actor can play in the process. As a result, we model a process through which a triadic business relationship is recovered and attraction, trust, and commitment are restored.