Antecedents and consequences of channel process integration: An empirical investigation in the pharmaceutical supplier - pharmacy dyad

Channel integration traditionally was studied in marketing literature as a structure variable describing the extent of ownership between channel partners, In this study I defined integration as the extent to which channel processes are integrated within a dyad. The purpose of this research was to answer the following questions: (1) what antecedents influence channel process integration, (2) what are the consequences of channel process integration and (3) do governance mechanisms such as trust and monitoring moderate the relationship between channel process integration and outcome variables?; Based on the literature, three dimensions of channel process integration (transactional, operational and strategic) were identified. In the proposed model based on resource dependence, transaction cost, and social network theories two groups of antecedents were identified. They were (1) motivation variables (resource importance, asset specificity, environmental dynamism environmental complexity, and performance ambiguity) and (2) ability variables (channel ownership, and network membership). The outcomes of channel process integration were effectiveness, procurement costs, satisfaction with coordination and distributive equity. Also the relationship between channel process integration and channel outcomes was proposed to be moderated by trust and supplier's monitoring. Trust has two distinct dimensions, credibility and benevolence.; A combined telephone and mail survey was used to collect data from a sample of 600 pharmacies in seven midwestern states. Data from 184 (30.7%) pharmacies were analyzed. The refined measures were used to test the modeled relationship using regression analyses. Resource importance, asset specificity, performance ambiguity and channel ownership had strong positive influences on channel process integration. Environmental complexity and dynamism had strong negative influences on channel process integration. Network membership did not have a significant influence on channel process integration.; Channel process integration had a significant direct effect on all the channel outcome variables. Trust (credibility and benevolence) was found to behave as a quasi-moderator on the relationship between channel process integration and channel outcomes (channel effectiveness and distributive equity). Trust (credibility) and supplier's monitoring behaved as a quasi-moderator on the relationship between channel process integration and satisfaction with coordination. Supplier's monitoring also had direct effects on channel effectiveness and distributive equity.