Relational Risk, Control Mechanisms And Role Performance In Marketing Channels

Channel members usually choose cooperation to gain competitive advantage with the greater competitive intensity. But, many studies have found the cooperation between channel members with high failure rates. One cause is the high level of risk associated with cooperation, compared to in-house activities. So, it’s an important issue to study how to deal with this high risk.Previous studies have mainly focused on the effects of control mechanisms on relational risk, but few studies focus on the effects of perceived relational risk on the options of control mechanisms. Therefore, this paper will explore the effects of buyer’s perceived relational risk on the buyer’s options of output and process control and their effects on supplier role performance from decision-process perspective.The respondent companies were distributors from furnishing, computer and its components industries in China. The questionnaire survey collected 206 valid questionnaires which provide data for the empirical research. SPSS20 and AMOS20 were used to analysis the data to insure the reliability and validity of the indexes. Then, multivariate hierarchical regression model was used to test the hypotheses. The empirical results indicate that buyer’s perceived relational risk increase its use of output and process control. The buyer’s emphasis on output control has an inverted U-shaped effect on supplier role performance and the buyer’s emphasis on process control has a U-shaped effect on supplier role performance. The interaction effect of output control and process control enhances supplier role performance.The major contribution of the study lies in exploring the relationship between relational risk, control mechanisms and role performance from decision-process perspective. Based on research results, channel members need to emphasis output control or process control to reduce perceived relational risk. Meanwhile, it’s necessary to notice that the use of control mechanisms may not achieve desired effects. Channel members need to emphasis control mechanisms appropriately can reduce relational risk and keep harmony channel relationships, because the effects of control mechanisms rely on their strength.