Governance of international distributors: addressing distinct organizational levels and impacts on performance

Abstract

The purpose of this study is to examine how internationally operating manufacturers can govern the management team and the salesforce of their channel members. Through the application of governance mechanisms on two distinct levels within the distributorship and the investigation of their effects on performance and social satisfaction the study contributes to channel management research in which the influence on individuals of intermediaries are still under-represented. A survey of 120 Austrian machinery and equipment manufacturers was conducted and partial least squares path analysis tested the conceptualized model. The findings indicate that the management team is the key to success and by focusing on them, outcome- and behavior-based control methods and interpersonal socialization improve performance. Normative control mechanisms positively influence satisfaction with psychosocial aspects of the relationship. On the other hand, governing the distributor’s salesforce only impacts performance and the degree of social satisfaction if all efforts are aligned with activities targeted at the distributor’s management team. In particular, governance mechanisms applied to the management team fully mediate control mechanisms dedicated to the salesforce. Thus, these results show internationally operating manufacturers how they can globally improve their marketing channel activities.