Outcome- and behaviour-control in distribution partnerships: the role of trust and dependence and their effects on performance

Abstract

In dyadic channel partnerships, specific outcomes and behaviours are often emphasised to signal desirable objectives and actions that would lead to adequate levels of coordination. Much of the research regarding the outcome- and behaviour-based controls has adopted the perspective of the firm that manages the relationship (source). However, questions remain as to how, or even whether, the managed firm (target) benefits from these coordination efforts. Drawing on the most recent literature on channel governance, this research posits that both the target's trust in, and dependence on, the source moderate the effects of outcome- and behaviour-control on the target's performance. Formal hypotheses are tested on a sample of 157 agricultural cooperatives involved in channel partnership with larger, downstream second-order marketing cooperatives. The results indicate that the target's trust in the source enhances the positive effects of both types of controls. However, the target's dependence on the source decreases the positive effects of behaviour-based controls on the target's performance.

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