Managing International Distribution Channel Partners: A Cross-Cultural Approach

Abstract

Although the topic of conflict has been extensively studied in the distribution channels literature from a domestic perspective, there is relatively little published research examining the construct within the international distribution channels context. This is of particular concern because cross-national channel partnerships are on the rise, and divergent cultures may engender heightened conflict, which has a deleterious effect on channel performance. This article explores the extent to which different channel leadership styles, predicated on Hofstede's dimensions of national culture, can be effective strategies to manage conflict in international distribution channels. Specifically, the article examines whether the relationship between leadership style and conflict in international distribution channels is moderated by national culture. Additionally, the impact of manifest conflict on international channel partner performance is investigated. A conceptual model and research propositions are developed. The use of leadership styles to manage disagreements among international channel partners is argued to be culturally specific. International channel management implications and directions for future research are suggested.

KEYWORDS:

• channel conflict
• channel leadership styles
• channel management
• Hofstede
• partnering

The authors gratefully acknowledge the valuable feedback and contributions of the reviewers and the editor.

Notes

¹The article examined only participative, supportive, and directive leadership styles for four reasons. First, as already noted, Barnett and Arnold (1989) espouse that these three styles are especially relevant in distribution channel management. Second, these three offer a range of distinctly different leadership styles; this situation allows for unique explained variance to be extracted vis-à-vis the leadership style/manifest conflict relationship. Third, each of the three is an action-oriented leadership style; given that distribution channels tend to have leaders to function as an integrated team of channel partners, including less active leadership styles seemed inappropriate. Fourth, we employed participative, supportive, and directive leadership styles to be compatible with the distribution channels literature.

²Other leadership styles could also have been included in the model. For instance, the laissez faire leadership style identified by Lewin, Lippit, and White (1939) was not included in the model because distribution channel partners cannot be “left to their own devices” (Rosenbloom, 2004). Because distribution channels are viewed as an interorganizational network of interdependent firms that coalesce for collective and individual goals, it is necessary for a channel leader to coordinate performance of distribution functions, thus reducing the possibility of the inefficient allocation of distribution tasks among channel participants (Ridgeway, 1962). Much to the contrary, distribution channels should not be left to evolve or else they will suffer the consequences of entropy (Rosenbloom, 2004). Consequently, as channel leadership is necessary for the distribution channel to operate as a highly efficient integrated network, the inclusion of laissez faire leadership style seemingly could not be justified. Democratic and autocratic leadership styles (Lewin et al., 1939), however, were implicitly included in the model, as they conceptually overlap with participative and directive leadership styles, respectively.

³Four dimensions were initially identified in Hofstede's original study. Later a fifth dimension was added, originally referred to as Confucian Dynamism but now often referred to as long- vs. short-term orientation. Because there is evidence that this dimension and the individualism vs. collectivism dimension are highly correlated (Yeh & Lawrence, 1995), the long- vs. short-term orientation dimension was excluded in the current work.

⁴The authors thank one of the anonymous reviewers for this idea.