Skip to main content
Log in

Exploring the effect of relational governance on retailer-perceived performance

  • Original Paper
  • Published:
Eurasian Business Review Aims and scope Submit manuscript

Abstract

Relational governance is generally believed to lead to the development of long-term relationships and an increased emphasis on cooperation among channel participants. Although relational governance may not be an appropriate approach for all firms in all market situations, it might help firms build long-term relationships and gain sustainable competitive advantages. After a review of the relevant literature, we formulated six hypotheses. Data were collected from 286 usable questionnaires completed by retailers in the Taiwanese automobile industry. All hypotheses were verified with data from a sample of the respondents by using a structural equation model. Our results indicated that retailers’ trust and relationship satisfaction are positively related to their perceived performance. Relational governance is positively related to retailers’ trust and relationship satisfaction. Perceived market uncertainty and customer orientation are positively related to relational governance. Finally, this study concludes with a discussion on managerial implications and provides suggestions for future research.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

References

  • Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: a review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423.

    Article  Google Scholar 

  • Bejou, D., Ennew, C. T., & Palmer, A. (1998). Trust, ethics and relationship satisfaction. International Journal of Bank Marketing, 16(4), 170–175.

    Article  Google Scholar 

  • Bentler, P. M. (1995). EQS: structural equations program manual. Los Angeles: BMDP Statistical Software.

    Google Scholar 

  • Bollen, K. A. (1989). Structural equations with latent variable. New York: Wiley.

    Book  Google Scholar 

  • Bradach, J. L., & Eccles, R. G. (1989). Price, authority and trust: from ideal types to plural forms. Annual Review of Sociology, 15, 97–118.

    Article  Google Scholar 

  • Byrne, B. M. (1994). Structural equation modelling with EQS and EQS/Windows. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Cannon, J. P., & Perrault, W. D, Jr. (1999). Buyer-seller relationships in business markets. Journal of Marketing Research, 36(4), 439–460.

    Article  Google Scholar 

  • Carbonell-Foulquie´, P., Rodriguez-Escudero, A. I., & Pujari, D. (2008). Positive effect of customer involvement in new service development. Universia Business Review, 19, 100–117.

    Google Scholar 

  • Chang, S., Willeloostuijn, A., & Eden, L. (2010). Common method variance in international business research. Journal of International Business Studies, 41, 178–184.

    Article  Google Scholar 

  • Claro, D. P., Hagelaar, G., & Omta, O. (2003). The determinants of relational governance and performance: how to management business relationship? Industrial Marketing Management, 32(8), 703–716.

    Article  Google Scholar 

  • Coulter, K. S., & Coulter, R. A. (2003). The effects of industry knowledge on the development of trust in service relationships. International Journal of Research in Marketing, 20(1), 31–44.

    Article  Google Scholar 

  • Crosby, L., Evans, K., & Cowles, D. (1990). Relationship quality in services selling: an interpersonal influence perspective. Journal of Marketing, 54, 68–81.

    Article  Google Scholar 

  • Dahlstrom, R., & Nygaard, A. (1999). An empirical investigation of ex post transaction costs in franchised distribution channels. Journal of Marketing Research, 36(2), 160–170.

    Article  Google Scholar 

  • Dekker, H. C. (2004). Control of inter-organizational relationships: evidence on appropriation concerns and coordination requirements. Accounting, Organizations and Society, 29(1), 27–49.

    Article  Google Scholar 

  • Deshparde, R., & Farley, J. U. (1998). Measuring market orientation: generalization and synthesis. Journal of Market Focused Management, 2(3), 213–232.

    Article  Google Scholar 

  • Dunn, G., Everitt, B., & Pickles, A. (1994). Modelling covariances and latent variables using EQS. London: Chapman and Hall.

    Google Scholar 

  • Dyer, J. H. (1997). Effective interfirm collaboration: how firms minimize transaction costs and maximize transaction value. Strategic Management Journal, 18(7), 535–556.

    Article  Google Scholar 

  • Elg, U., & Paavola, H. (2008). Market orientation of retail brands in the grocery chain: the role of supplier relationships. The International Review of Retail, Distribution and Consumer Research, 18(2), 221–233.

    Article  Google Scholar 

  • Fink, R. C., Edelman, L. F., & Hatten, K. J. (2007). Supplier performance improvements in relational exchanges. Journal of Business & Industrial Marketing, 22(1), 29–40.

    Article  Google Scholar 

  • Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 24, 337–346.

    Article  Google Scholar 

  • Frazier, G. L. (1983). On the measurement of interfirm power in channels of distribution. Journal of Marketing Research, 20(May), 158–166.

    Article  Google Scholar 

  • Ganesan, S. (1994). Determinants of long-term orientation in buyer-seller relationships. Journal of Marketing, 58(1), 1–19.

    Article  Google Scholar 

  • Ganesan, S., George, M., Jap, S., Palmatier, R. W., & Weitz, B. (2009). Supply chain management and retailer performance: emerging trends, issues, and implications for research and practice. Journal of Retailing, 85(1), 84–94.

    Article  Google Scholar 

  • Gladstein, D. L. (1984). Groups in context: a model of task group effectiveness. Administrative Science Quarterly, 29, 499–517.

    Article  Google Scholar 

  • Gundlach, G. T. (1994). Exchange governance: the role of legal and nonlegal approaches across the exchange process. Journal of Public Policy & Marketing, 13(2), 246–258.

    Google Scholar 

  • Gundlach, G. T., & Achrol, R. S. (1993). Governance in Exchange: contract law and its alternatives. Journal of Public Policy & Marketing, 12(4), 141–155.

    Google Scholar 

  • Hatcher, L., (Ed.) (1998). A Step-by-step Approach to Using the SAS System for Factor Analysis and Structural Equation Modeling, 3rd edn, SAS Institute Inc.

  • Heide, J. B. (1994). Interorganizational governance in marketing channels. Journal of Marketing, 58(1), 71–85.

    Article  Google Scholar 

  • Hoetker, G., & Mellewigt, T. (2009). Choice and performance of governance mechanisms: matching alliance governance to asset type. Strategic Management Journal, 30(1), 1025–1044.

    Article  Google Scholar 

  • Holmlund, M. (2008). A definition, model, and empirical analysis of business-to-business relationship quality. International Journal of Service Industry Management, 19(1), 32–62.

    Article  Google Scholar 

  • Jap, S. D., & Ganesan, S. (2000). Control mechanisms and the relationship life cycle: implications for safeguarding specific investments and developing commitment. Journal of Marketing Research, 37, 227–245.

    Article  Google Scholar 

  • Johnson, M. D., Herrmann, A., & Huber, F. (2006). The evolution of loyalty intentions. Journal of Marketing, 70(2), 122–132.

    Article  Google Scholar 

  • Joreskog, K. G., & Sorbom, D. (Eds.). (1993). LISREL 8:user’s reference guide. Chicago: Scientific Software International.

    Google Scholar 

  • Lambert, D., & Harrington, T. (1990). Measuring nonresponse bias in mail surveys. Journal of Business Logistics, 11(2), 5–25.

    Google Scholar 

  • Lessler, J. T., & Kalsbeek, W. D. (1992). Nonsampling error in surveys. New York: Wiley.

    Google Scholar 

  • Leuthesser, L. (1997). Supplier relational behaviour: an empirical assessment. Industrial Marketing Management, 26(3), 245–254.

    Article  Google Scholar 

  • Li, N., Boulding, W., & Staelin, R. (2010). General alliance experience, uncertainty, and marketing alliance governance mode choice. Journal of the Academy Marketing Science, 38, 141–158.

    Article  Google Scholar 

  • Lindell, M. K., & Whitney, D. J. (2001). Accounting for common method variance in cross-sectional research designs. Journal of Applied Psychology, 86(1), 114–121.

    Article  Google Scholar 

  • Lines, R., Selart, M., Espedal, B., & Johansen, S. T. (2005). The production of trust during organizational change. Journal of Change Management, 5(2), 221–245.

    Article  Google Scholar 

  • Liu, Y., Li, Y., & Zhang, L. (2010). Control mechanisms across a buyer-supplier relationship quality matrix. Journal of Business Research, 63(1), 3–12.

    Article  Google Scholar 

  • Luo, X., Hsu, M. K., & Liu, S. S. (2007). The moderating role of institutional networking in the customer orientation- trust/commitment-performance causal chain in China. Journal of the Academy Marketing Science. doi:10.1007/s11747-007-0047-z.

    Google Scholar 

  • Lusch, R. F., & Brown, J. R. (1996). Interdependency contracting and relational behavior in marketing channels. Journal of Marketing, 60(3), 19–38.

    Article  Google Scholar 

  • Macintosh, G. (2007). Customer orientation, relationship quality, and relational benefits to the firm. Journal of Services Marketing, 21(3), 150–159.

    Article  Google Scholar 

  • Macneil, I. R. (Ed.). (1980). The new social contract: an inquiry into modern contractual relations. New Haven: Yale University Press.

    Google Scholar 

  • Mallard, A. G. C., & Lance, C. E. (1998). Development and evaluation of a parent-employee interrole conflict scale. Social Indicator Research, 45, 343–370.

    Article  Google Scholar 

  • Miller, K. D. (1992). A framework for integrated risk management in international business. Journal of International Business Studies, 23(2), 311–331.

    Article  Google Scholar 

  • Moorman, C., Deshpande, R., & Zaltman, G. (1993). Factors affecting trust in market research relationships. Journal of Marketing, 57(1), 81–101.

    Article  Google Scholar 

  • Morgan, R. M., & Hunt, S. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38.

  • Munkirs, J. R. (1993). The automobile industry, political economy, and a new world order. Journal of Economic Issues, 27(2), 627–638.

    Google Scholar 

  • Nunally, J. C. (1978). Pshycometric theory (2nd ed.). New York: McGraw-Hill.

    Google Scholar 

  • Orth, U. R., & Green, M. T. (2009). Consumer loyalty to family versus non-family business: the roles of store image, trust and satisfaction. Journal of Retailing and Consumer Services, 16(4), 248–259.

    Article  Google Scholar 

  • Palmatier, R. W., Dant, R. V., Grewal, D., & Evans, K. R. (2006). Factors influencing the effectiveness of relationship marketing: a meta-analysis. Journal of Marketing, 70(3), 136–153.

    Article  Google Scholar 

  • Podsakoff, P., MacKenzie, S., Podsakoff, N., & Lee, J. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.

    Article  Google Scholar 

  • Poppo, L., & Zenger, T. (2002). Do formal contracts and relational governance function as substitutes or complements? Strategic Management Journal, 23(8), 707–725.

    Article  Google Scholar 

  • Sanchez, J. N. L., Vijande, M. L. S., & Gutierrez, J. A. T. (2010). The impact of relational variables on value creation in buyer-seller business relationships. Journal of Business-to-Business Marketing, 17, 62–94.

    Article  Google Scholar 

  • Sanzo, M. J., Santos, M. L., Vazquez, R., & Alvarez, L. I. (2003). The effect of market orientation on buyer-seller relationship satisfaction. Industrial Marketing Management, 32, 327–345.

  • Saxton, T. (1997). The effects of partner and relationship characteristics on alliance outcomes. The Academy of Management Journal, 40(2), 443–461.

    Article  Google Scholar 

  • Siguaw, J. A., Baker, T. L., & Simpson, P. M. (2003). Preliminary evidence on the composition of relational exchange and its outcomes. Journal of Business Research, 56(4), 311–322.

    Article  Google Scholar 

  • Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value and loyalty in relational exchanges. Journal of Marketing, 66(1), 15–37.

    Article  Google Scholar 

  • Torkzadeh, G., Koufteros, X., & Pflughoeft, K. (2003). Confirmatory analysis of computer self-efficacy. Structural Equation Modeling, 10(2), 263–275.

    Article  Google Scholar 

  • Ulaga, W., & Eggert, A. (2006). Relationship value and relationship quality. European Journal of Marketing, 40(3/4), 311–327.

    Article  Google Scholar 

  • Venkataraman, N. (1989). The concept of fit in strategy research: toward verbal and statistical correspondence. Academy of Management Review, 14(3), 423–433.

    Google Scholar 

  • Walter, A., & Ritter, T. (2003). The influence of adaptations, trust, and commitment on value-creating functions of customer relationships. Journal of Business and Industrial Marketing, 18(4/5), 353–365.

    Article  Google Scholar 

  • Wathne, K. H., & Heide, J. B. (2004). Relationship governance in a supply chain network. Journal of Marketing, 68(1), 73–89.

    Article  Google Scholar 

  • Weitz, B. A., & Jap, S. D. (1995). Relationship marketing and distribution channels. Journal of the Academy of Marketing Science, 23(4), 305–320.

    Article  Google Scholar 

  • Williamson, O. E. (Ed.). (1985). The economic institutions of capitalism. New York: The Free Press.

    Google Scholar 

  • Wilson, D. T. (1995). An integrated model of buyer-seller relationships. Journal of the Academy of Marketing Science, 23(4), 335–345.

    Article  Google Scholar 

  • Wray, B., Palmer, A., & Bejou, D. (1994). Using neural networks analysis to evaluate buyer-seller relationships. European Journal of Marketing, 23(2), 109–122.

    Google Scholar 

  • Yeh, Y. P. (2005). Identification of factors affecting continuity of cooperative electronic supply chain relationships: empirical case of the Taiwanese motor industry. Supply Chain Management An International Journal, 10(5), 327–335.

    Article  Google Scholar 

  • Yu, C. M. J., Liao, T. J., & Lin, Z. D. (2006). Formal governance mechanisms, relational governance mechanisms, and transaction-specific investments in supplier-manufacturer relationships. Industrial Marketing Management, 35, 128–139.

    Article  Google Scholar 

  • Zhou, K. Z., Poppo, L., & Yang, Z. (2008). Relational ties or customized contracts? an examination of alternative governance choices in China. Journal of International Business Studies, 39(3), 526–534.

    Article  Google Scholar 

  • Zhuang, G., & Zhang, X. (2011). Impact of relationship marketing orientation on the exercise of interfirm power and relational governance in marketing channels: empirical evidence from China. Journal of Marketing Channels, 18, 279–302.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Ying-Pin Yeh.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Yeh, YP. Exploring the effect of relational governance on retailer-perceived performance. Eurasian Bus Rev 5, 1–22 (2015). https://doi.org/10.1007/s40821-014-0011-z

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40821-014-0011-z

Keywords

Navigation