Research Article
The Effect of Distribution Channel Environment Munificence and Distribution Channel Form on Internal Economic Structure within Channels
Published: January 1992 · Vol. 21, No. 2 · pp. 29-54
Full Text
Abstract
The purpose of this study is to examine how the munificence of the distribution channel environment facing retail outlets, along with differences in channel form, affects the bureaucratic structuring of decision-making (formalization, centralization, participation) and relational solidarity (satisfaction, minimal opportunism, trust) within channel systems, by targeting both the automobile distribution channel, which adopts a corporate vertically integrated channel in Korea, and the distribution channels of three home appliance companies, which adopt franchise contractual channels. From the resource dependence theory perspective, hypotheses were proposed that the bureaucratization of decision-making structures among distribution channel members would be highest in corporate-type distribution channels with lean channel environments and relatively lower in contractual-type distribution channels with munificent channel environments. Additionally, it was expected that the stronger the bureaucratic control, the lower the relational solidarity among channel members. The research results, though partial, showed as expected that formalization and centralization were higher in corporate-type channels with lean environments and lower in contractual-type channels with munificent environments. Regarding the relationship between bureaucratic structuring and relational solidarity, formalization had a positive effect on both satisfaction and trust, while centralization had a positive effect not only on opportunism but also on trust. These results differed from expectations, suggesting the need for supplementary research in the future.
