Modelling distributor firm and manufacturer firm working relationships

Abstract

Past research has characterized business relationships using perceptual and sentiment constructs. This research has relied on an underlying assumption that ‘structure’, in the form of channel role, is more likely to explain firm behaviour in relationships than ‘strategy’ or any other formulation. A re-examination of the literature throws doubt on this assumption. An empirical study is used to explore an alternate hypothesis, with differentiated local models of distributor and manufacturing firms’ working relationships being found using a clusterwise regression technique. The results suggest that inter-firm cooperation is more effective than a self-centred approach to achieving relationship performance. In addition the results suggest that relationship ‘strategy’ is more important than ‘structure’ in modelling working relationships. Finally, directions for further research and management implications are considered.