Deterrence or Conflict Spiral Effect? Exercise of Coercive Power in Marketing Channels: Evidence from China

Abstract

Purpose: The article aims to test the appropriateness of deterrence and conflict spiral models in marketing channels. Both models have been alternatively used as bases to explain firms’ power-related behaviors in marketing channels. However, the issue of the appropriateness of such an application in various contexts has not yet been addressed.

Methodology/approach: The authors develop the hypotheses based on deterrence theory and their alternatives based on conflict spiral theory. They gather data from 204 sales representatives of suppliers in China and use linear regression analysis to test their hypotheses versus alternatives.

Empirical findings: The data analysis offers supportive evidence for the deterrence logic but with unexpected results. By elaborating on the empirical results, the original assumption of deterrence theory, and the nature of interfirm relationship in marketing channels, the authors modify the deterrence model for research on power related-behaviors in the given context. The analysis implies a possible explanation for inconsistent findings in the literature regarding exercises of coercive power.

Originality/value/contribution: This article proposes a revised deterrence model that can interpret the empirical results with a consistent logic and better predict power-related behaviors in marketing channels.

Research limitations/implications: The research results may lack generalizability with respect to channel type and culture. It does not directly test the cognitive mechanisms that mediate the impact of power on its exercise. Researchers are encouraged to directly test the mediating constructs in other channels or countries.

Practical implications: The article includes some insights and implications for managers in understanding power structure and implementing influence strategies in business-to-business marketing.

KEYWORDS:

• business marketing
• buyer–seller relationship
• China
• conflict spiral theory
• deterrence theory
• exercise of coercive power
• industrial marketing
• marketing channels
• power

Notes

1. Power advantage versus power disadvantage (i.e., relative power) should not be treated as one-sided such that if a firm is more powerful than its partner, its partner would have no power. Because there are many aspects of business relationships an actor may have more power in one aspect but less or no power in other aspects of the relationship. Power advantage thus only means that the actor in power advantage is more powerful than the actor in power disadvantage in most aspects, or the most important aspects, not in all aspects of the relationship (Ganesan 1993; Kumar et al. 1998; Lawler 1986; Molm 1997).

2. This article was published in Advances in Group Processes, Vol. 3, E. J. Lawler, “Bilateral Deterrence and Conflict Spiral: A Theoretical Analysis”, page nos. 107–130, Copyright Elsevier (1986).

3. We use the term source to indicate the firm using power and the term target to indicate the firm being targeted by the power usage following the convention of Frazier and Summers (1986) and others.

4. Note that Venkatesh, Kohli, and Zaltman (1995), in the context of an intrafirm decision-making process (buying center in a firm), classified influence strategies into noncoercive (requests and information exchange), soft coercive (promises, recommendation), and hard coercive (threats, legalistic pleas). However, no channel researchers appear to follow this typology.

5. To make it clear, see Part II in Figure 1. Let “A” be the advantaged actor and “B” be the disadvantaged actor. As the power imbalance increases, A will be even more powerful than before. This will make A use more coercive power according to its own power following the path “A’s Capability↑ (+) A’s Temptation↑ (+) A’s Use of Punitive Tactics↑” and B uses more coercive power according to A’s power following the path “A’s Capability ↑(+) B’s Expectation of Attack by A↑(+) B’s Use of Punitive Tactics↑.”