The Impact Of Interfirm Relationship Strength On Channels Contractual Governance

Since the1990s, the circulation domain has undergone many changes, the traditional channel model suffered unprecedented impacts, the channel members has launched a fierce battle around the channel control, the contradictions and conflicts occurrenced frequently between retailers and suppliers and the situation has a further escalation trend, this has seriously affected the harmony and stability of the relationship between the channel members. In such a competitive market, how to maintain the stability of the cooperative relationship, improve business performance between retailers and suppliers has become an urgent problem for business managers. While in review of existing literature, the research of channel areas still stuck on the building of the channel structure, lack of research on channel behavior and channel relationships, especially Chinese scholars started late in this field, and the results of the study is limited, this has resulted in a lack of guidance of channels theory on our corporate practice. At the same time,"Guanxi" has a rich cultural connotations in Chinese society, affecting every aspect of people’s lives and business activities. In real life, successful channel relationship management has become the key sources of competitive advantage, therefore, the introduction of the concept of relationship strength, which represent the depth and maturity of the relationship between the channel members to contractual channels governance, This has important practical significance for guidance related Chinese enterprises how to handle the relationship between the channel members correctly.In this paper, based on review of channel contractual governance and relationship strength theory, this paper proposes the theoretical framework and hypothesis to be tested. In empirical research, we commissioned a professional survey company to collect the questionnaire, this paper studies the relationship between manufacturers and major distributors (distributors, agents or retailers) in Manufacturing by collecting the date from Shenyang, Dalian, Changchun, Guangzhou, Xi’an and Zhengzhou6cities, and examines how relationship strength impact the contractual governance and other related hypothesis. We get the conclusions of this study:First, the affect of relationship length on the contractual channels governance is not significant, mutual confiding, reciprocal services and emotional intensity have significant positive impact on the enterprise contractual channel governance. In addition, the contractual channel governance has a significant positive impact on the channel performance.The contributions of this paper include:First, we introduction the dimensions of relationship strength to the study of impact of contractual channel governance mechanisms. This paper study the relationship strength, which represent the depth and maturity of the relationship between the channel members as the antecedents of contractual governance mechanisms, this enriched channels governance theory. Second, this paper different from previous studies, we measure the relationship strength from four dimensions(relationship length, mutual confiding, reciprocal services and emotional intensity), rather than only from the overall measurement or just concerned about a dimension or a few dimensions in previous studies. Therefore, this paper make up the lack of emotional factors in research relationship strength in the past studies.Finally, based on the conclusions, we make management recommendations for manufacturing enterprises, and point out the inadequacy of existing research for subsequent scholars to research and study.