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Holding Distribution Channel Relationships Together: The Role of Transaction-Specific Assets and Length of Prior Relationship

Author

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  • Allen M. Weiss

    (Department of Marketing, Marshall School of Business, University of Southern California, Los Angeles, California 90089-1421)

  • Nancy Kurland

    (Department of Management and Organization, Marshall School of Business, University of Southern California, Los Angeles, California 90089-1421)

Abstract

The authors investigate the effect of managers' perceptions of two types of transaction-specific investments on their intention to terminate a current interorganizational relationship: (1) the specific knowledge necessary for a manufacturer's representative (rep) to carry out the selling function for a given manufacturer and (2) the specific knowledge reps acquire about their own customer accounts. The extent to which the length of prior relationship strengthens or weakens the hypothesized linkages is also examined. The authors test the hypotheses within the context of distribution channels (i.e., between a manufacturer and its selling agent), which are characteristic of many vertical organizational relationships. The results replicate in an additional setting some prior findings on the influence of transaction-specific investments between two parties directly involved in a relationship. The authors also find that specialized investments by a downstream partner (i.e., a manufacturer's rep) in relationships that are even farther downstream (i.e., customer accounts) can influence a manufacturer's intention to terminate the manufacturer-rep relationship. Moreover, the length of prior relationship between a manufacturer and its rep is shown to moderate this effect.

Suggested Citation

  • Allen M. Weiss & Nancy Kurland, 1997. "Holding Distribution Channel Relationships Together: The Role of Transaction-Specific Assets and Length of Prior Relationship," Organization Science, INFORMS, vol. 8(6), pages 612-623, December.
    • Handle: RePEc:inm:ororsc:v:8:y:1997:i:6:p:612-623
    DOI: 10.1287/orsc.8.6.612
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    Cited by:

    1. Nilesh Saraf & Christoph Schlueter Langdon & Sanjay Gosain, 2007. "IS Application Capabilities and Relational Value in Interfirm Partnerships," Information Systems Research, INFORMS, vol. 18(3), pages 320-339, September.
    2. Roden, Sinéad & Lawson, Benn, 2014. "Developing social capital in buyer–supplier relationships: The contingent effect of relationship-specific adaptations," International Journal of Production Economics, Elsevier, vol. 151(C), pages 89-99.
    3. De Cannière, M.H. & De Pelsmacker, P. & Geuens, M., 2006. "The moderating impact of relational strength on the relationship between relationship quality and purchasing behavior," Vlerick Leuven Gent Management School Working Paper Series 2006-16, Vlerick Leuven Gent Management School.
    4. Gázquez-Abad, Juan Carlos & Canniére, Marie Hélène De & Martínez-López, Francisco J., 2011. "Dynamics of Customer Response to Promotional and Relational Direct Mailings from an Apparel Retailer: The Moderating Role of Relationship Strength," Journal of Retailing, Elsevier, vol. 87(2), pages 166-181.
    5. Joseph P. Broschak & Emily S. Block & Sharon Koppman & Idris Adjerid, 2020. "Will We Ever Meet Again? The Relationship between Inter‐Firm Managerial Migration and the Circulation of Client Ties," Journal of Management Studies, Wiley Blackwell, vol. 57(6), pages 1106-1142, September.
    6. Olivier Habimana, 2016. "From Coase to Williamson: Evolution, Formalization and Empirics of Transaction Cost Economics," Journal of Social Economics, Research Academy of Social Sciences, vol. 3(1), pages 36-42.
    7. Leinan Zhang & Qingyan Zeng & Silin Zhang & Shuqin Li & Liang Wang, 2022. "Transaction-Specific Investment and Organizational Performance: A Meta-Analysis," Sustainability, MDPI, vol. 14(9), pages 1-18, April.
    8. Brian R. Murtha & Goutam Challagalla & Ajay K. Kohli, 2011. "The Threat from Within: Account Managers' Concern About Opportunism by Their Own Team Members," Management Science, INFORMS, vol. 57(9), pages 1580-1593, February.
    9. Wu, Lei-Yu & Chen, Kuan-Yang & Chen, Po-Yuan & Tung, Pei-Ju, 2016. "Revisiting associations between specific asset investment and loyal and cooperative behavior: A complexity theory perspective," Journal of Business Research, Elsevier, vol. 69(9), pages 3545-3552.
    10. Kim, Keysuk, 2001. "On the effects of customer conditions on distributor commitment and supplier commitment in industrial channels of distribution," Journal of Business Research, Elsevier, vol. 51(2), pages 87-99, February.

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