Making partner relationship management systems work: The role of partnership governance mechanisms

While the adoption of Partner Relationship Management (PRM) systems by suppliers to manage and monitor its network of partners (i.e. resellers) has been on the rise, the performance improvements have not been consistently realized. Governance theory suggests this may be due to how the PRM system builds on the mechanisms employed by the supplier to oversee their partners. This study investigates how the two capabilities of PRM systems (relationship and fulfillment capabilities) and two partnership governance mechanisms – formal (certification control) and informal (service support) – reinforce each other. These are then related to partner performance in terms of trust, commitment and customer satisfaction. Analysis of data collected from 192 partners in the information and communications technology (ICT) sector suggest a complex relationship. In terms of direct effects, a relationship capability increased trust yet, surprisingly, a fulfillment capability reduced commitment. In terms of moderating effects, certification control weakened the positive link between the relationship capability and performance. Service support, on the other hand, negated some of the detrimental impact of the fulfillment capability on performance. The results suggest the need of to tailor PRM systems in response to the specific performance expectations around them as well as a need to clearly understand how existing partnership governance mechanisms employed by the supplier will affect the performance of these systems.