The role of interpersonal liking in building trust in long-term channel relationships

This article explores the important role of liking in the development of the buyer’s trust in the sales rep. The authors argue that liking’s role is richer and qualitatively different from that of the more cognitive antecedents of trust. They posit that many cognitive antecedents of trust operate mainly through liking. They argue that as the buyer-sales rep relationship matures, liking plays an even more important role in influencing trust. The authors empirically test a model delineating the mediating role of liking in developing trust. They find that when the relationship between the buyer and the sales rep is young, liking partially mediates the effect of similarity of business values and fully mediates the influence of frequency of personal interaction on trust. Moreover, as the buyer’s relationship with the rep ages, liking takes the foreground in trust development, while more cognitive antecedents recede into the background. Carolyn Y. Nicholson (Ph.D., Virginia Polytechnic Institute and State University) is an assistant professor of marketing at Stetson University. Her current research areas include forms and uses of communication in distribution channels, trust and commitment in marketing relationships, and Internet marketing. Her research has appeared in theJournal of Retailing, along with numerous national conference proceedings. Larry D. Compeau (Ph.D., Virginia Polytechnic Institute and State University) is an associate professor of marketing at Clarkson University. His research has appeared in theJournal of Public Policy & Marketing and theJournal of Business Research. He has recently coedited a special issue of theJournal of Public Policy & Marketing on pricing. His research has appeared in numerous national conference proceedings. Rajesh Sethi (Ph.D., University of Pittsburgh) is an assistant processor of marketing at Clarkson University. His current research areas include new product development, cross-functional teams, Web-based new product development, and electronic commerce. He has published in theJournal of Marketing, theJournal of Marketing Research, theJournal of the Academy of Marketing Science, and theJournal of Social Policy and Public Management. He also has published in numerous national conference proceedings.     

FDI distribution within China: An integrative conceptual framework for analyzing intra-country FDI variations

The literature on foreign direct investment (FDI) has evolved in separate theoretical silos and a holistic conceptualization is yet to emerge. Research has focused mostly on inter-country differences and not much on explaining intra-country FDI variations. Traditionally FDI locations have been evaluated through country-level FDI determinants even though provinces differ widely in infrastructure and other attributes. Further, neither is the varying importance of FDI determinants to different industries factored in, nor are the differing FDI incentives from national and provincial governments integrated into a single framework. To address these gaps this study synthesizes insights from three streams of FDI research and develops an integrative conceptual framework that can comprehensively analyze intra-country FDI inflows. We demonstrate the usefulness of the framework by empirically analyzing FDI trends within China’s 31 provinces. The study thus makes a substantive contribution by offering scholars, policy-makers, and practitioners a holistic conceptual and methodological approach for understanding FDI trends within a country.     

Relating strategy and structure to flexible automation: A test of fit and performance implications

This study analyzed various strategy and structure choices to determine their fit relationship with flexible automation (FA). ¹Using the moderator hypothesis, we proposed that the more strategy and structure choices complemented FA's competences, the higher would be the performance impact of FA. Data from 87 FA users indicate that quality and flexibility strategies, described as complementary to FA's strengths, interact positively with FA. Low cost strategy, described as conflicting with FA, interacts negatively. Organic structure, viewed as complementary to FA, has only main effects whereas a mechanistic structure interacts negatively. At the manufacturing level, skill diversity and team approaches, considered as complementary to FA, interact positively. While a subgroup analysis of high-low performers lends additional support to these relationships, analysis of industry subgroups indicates that some relationships are industry specific. We discuss the implications of these findings for research and practice.     

Optimal Financing of a Corporation Subject To Random Returns

We consider the problem of finding an optimal financing mix of retained earnings and external equity for maximizing the value of a corporation in a stochastic environment. We formulate the problem as a singular stochastic control for a diffusion process. We show that the value function satisfies a free-boundary problem. We characterize the value function and show that the optimal policy can be characterized in terms of two threshold parameters. With asset level below the lower threshold, optimal policy is to finance the firm's growth by retaining all earnings and raising the required external equity financing. With asset level above the higher threshold, optimal policy is to pay all retained earnings as dividends and to bring in no new equity. Between the two thresholds, the optimal policy is to retain all earnings but not raise any external equity. We obtain an explicit solution for the value function when there is no brokerage commission in floating external equity. We provide economic interpretations of the results obtained in the paper.     

Operational modes for multinational corporations in post-apartheid South Africa: A proposal for a code of affirmative action in the marketplace

The economic and socio-political impact of multinational corporations (MNCs) on third world countries has been the subject of intense debate and controversy leading to charges of exploitation and colonization on the one hand, and demands for codes of conduct on the other. This article examines the working of one of the most comprehensive of such codes under the most reprehensible political conditions, i.e., the operations of U.S.—based multinational corporations in South Africa under the acgis of the Sullivan Principles. It is argued that despite the best intentions, and considerable social goodwill, the Sullivan Principles were seriously flawed both as to goals and as to means of achieving them. Finally, it suggests a new approach to developing standards of MNC behavior in third world countries which emphasizes those areas of activities that are directly under the control of MNCs, and offers targets of achievement to which MNCs can and should be held accountable.The paper is a revised and expanded version of a keynote speech delivered by the author at the First Biannual Conference on Advances in Management, Orlando, Florida March 25–28, 1992.S. Prakash Sethi is Professor and Associate Director, Center for Management, Baruch College, The City University of New York. He is also the Economic Policy Advisor to the National African Federated Chamber of Commerce and Industry (NAFCOC), which is the largest and the oldest organization of Black business and industry people in South Africa.     

Tariff Rates, Tariff Revenue, and Tariff Reform: Some New Facts

This article compares the statutory ad valorem tariff rates(official rates) with the ratio of tariff revenues to importvalues (collected rates) for Jamaica, Kenya, and Pakistan. Itidentifies four general features of the tariff codes, considerswhether these features apply to all developing countries, anddiscusses four implications of these features for tariff reform.First, the collected rate for any given item in the tariff codeis only weakly related to the official rate for that item. Second,the variation of collected rates around the official rate increaseswith the level of the official rate. Third, the collected rates,on average, increase much less than the official rates. Fourth,the relation between official rates and collected rates is nonlinear,because the slope is lower at higher levels of the officialrate.     

Reappraising liabilities of foreignness within an integrated perspective of the costs and benefits of doing business abroad

Several international business scholars have elaborated upon Hymer's [Hymer, S. H. (1960). The international operations of national firms: A study of direct investment. Unpublished Ph.D. dissertation, MIT, Cambridge, MA] costs of doing business abroad through the liability of foreignness notion. While this research has made important contributions, there is need for more conceptual refinement and synthesis due to the vastly increased scale and scope of MNE operations in recent years. Consequently, this study attempts to more precisely delineate the liabilities of foreignness component of costs of doing business abroad from other costs/liabilities that arise from the increasing complexity of global business. Further, we synthesize both the costs and benefits of cross-border operations that accrue to the foreign subsidiary into an integrated conceptual framework, and advance 11 theoretical propositions on how those impact its competitive dynamics. We illustrate these notions through a longitudinal case study on the operations of Ford Motor Company in India over the past 80 years.     

Structural and contextual correlates of charged behavior in product development teams

Firms increasingly use cross‐functional teams to develop new products, yet we know little about the processes that make teams excel. Although studies have focused on within‐team processes like cooperation between and integration of individuals from various functional areas, some emerging literature suggests that the processes that make teams excel are richer and more complex than cooperation and integration. In order to capture the processes that lead to excellent market performance of new products, we introduce the concept of charged team behavior, the extent to which cross‐functional product development teams are enthusiastically and jointly driven to develop superior new products. Charged team behavior captures not only the drive, commitment, and joy of team members, but also their collaborative behaviors to achieve an exceptional outcome. We propose and test a series of hypotheses concerning how charged behavior affects new product market performance and how charged behavior is, in turn, influenced by both team structural characteristics (physical proximity, team longevity, and outcome interdependence) and contextual factors (senior management encouragement to take risk, quality orientation, exposure to customer input, extent of competition, and interdepartmental connectedness). It is particularly important to examine the antecedents of charged behavior because there are concerns that some of the team‐related factors generally considered to be useful for teams may not necessarily lead to charged teams. Data from new consumer product development teams is analyzed though structural equation modeling for hypothesis testing. We find evidence that highly charged teams are more likely to develop successful new products. Results also indicate that outcome interdependence, exposure to customer input, extent of competition, and interdepartmental connectedness are positively related to charged behavior. Physical proximity, team longevity, encouragement to take risk, and quality orientation do not improve teams' charged behavior. Data suggests that charged team behavior: 1) fully mediates the effects of outcome interdependence and interdepartmental connectedness on performance, 2) partially mediates the influence of exposure to customer input and the extent of competition on performance, and 3) does not mediate the effects of quality orientation and physical proximity on performance. Our study highlights the importance of creating highly charged product development teams in order to achieve exceptional performance. Further, our results indicate that some of the factors suggested by traditional social psychology research for enhancing team effectiveness (e.g., physical proximity and team longevity) may not necessarily create charged teams. Instead, charged teams need a special arrangement, in which members are accountable to the team and where their evaluations and rewards are also linked to the performance of the team. In addition, although a strong emphasis on quality is considered to be beneficial for new products, as our results indicate, such emphasis cannot create a charged atmosphere. Moreover, our research suggests that if the organization structure does not permit frequent contact between individuals across functional boundaries, the creation of a strongly charged team and development of a successful new product will be hindered.