The Impact Of Reward And Coercive Power On Compliance And Conflict

At present, the theory of marketing channels mainly composed of two general research areas:channel structure and the channel behavior, and the latter how to establish and manage channel relationship is one the hottest stream in business research. In this paper we take reward and coercive powers, which are the main variables of channel behavior, as the independent variable, compliance and conflict (important measures of channel relationship quality) as the dependent variable.This paper tests the effects of reward and punishment powers exercised by power holder on weak partner’s compliance and channel conflict in the context of marketing channel in Kazakhstan in the setting of tobacco company and their retailers. The objective of this study is to expose the prejudicial and beneficial effects of reward and punishment powers’ usage on compliance and channel conflict in Kazakhstan. In doing so, the research highlights the need for power awareness and promotes the benefit of effective power management.Theoretical implications:first, many researchers provide different conclusions about relationship between reward, coercive powers and conflict, and most of the existing studies do not take into account the specific channel situations, difference between power types in different categories. In this paper we trying to investigate the influence of two different types of power (reward and coercion) on conflict. Second, already published a lot of academic articles, which more focus on the influence of the power use on the conflict, satisfaction and commitment, and less on the specific impact of the power use on compliance of the channel members. This paper in context of power asymmetry pay attention to influence of reward and punishment power on compliance, thus trying enrich the content of the channel behavior theory.Practical implications:first, last years cooperation of Kazakhstan with China and Russia and other countries become more intensive. Therefore, for successful practitioners’ operation in Kazakhstan is need to know more about the influence of power use on compliance and conflict in the marketing channel. Second, tobacco company is the main tax payment industry in Kazakhstan, the development of the tobacco industry directly impact on country’s tax revenue. Our research may help tobacco company in improving their managerial activities.The empirical results indicate:under the situation of asymmetric dependence, use of reward power won’t facilitate channel compliance, and doesn’t significantly affect channel conflict; use of coercive power won’t facilitate channel compliance and will increase the level of channel conflict. The research results show new lights on channel power field as well as provide helpful guidelines on managerial practice and it tests the degree of cross-cultural generalization of established channel constructs.