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.
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.
Bejou, D., Ennew, C. T., & Palmer, A. (1998). Trust, ethics and relationship satisfaction. International Journal of Bank Marketing, 16(4), 170–175.
Bentler, P. M. (1995). EQS: structural equations program manual. Los Angeles: BMDP Statistical Software.
Bollen, K. A. (1989). Structural equations with latent variable. New York: Wiley.
Bradach, J. L., & Eccles, R. G. (1989). Price, authority and trust: from ideal types to plural forms. Annual Review of Sociology, 15, 97–118.
Byrne, B. M. (1994). Structural equation modelling with EQS and EQS/Windows. Thousand Oaks: Sage Publications.
Cannon, J. P., & Perrault, W. D, Jr. (1999). Buyer-seller relationships in business markets. Journal of Marketing Research, 36(4), 439–460.
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.
Chang, S., Willeloostuijn, A., & Eden, L. (2010). Common method variance in international business research. Journal of International Business Studies, 41, 178–184.
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.
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.
Crosby, L., Evans, K., & Cowles, D. (1990). Relationship quality in services selling: an interpersonal influence perspective. Journal of Marketing, 54, 68–81.
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.
Dekker, H. C. (2004). Control of inter-organizational relationships: evidence on appropriation concerns and coordination requirements. Accounting, Organizations and Society, 29(1), 27–49.
Deshparde, R., & Farley, J. U. (1998). Measuring market orientation: generalization and synthesis. Journal of Market Focused Management, 2(3), 213–232.
Dunn, G., Everitt, B., & Pickles, A. (1994). Modelling covariances and latent variables using EQS. London: Chapman and Hall.
Dyer, J. H. (1997). Effective interfirm collaboration: how firms minimize transaction costs and maximize transaction value. Strategic Management Journal, 18(7), 535–556.
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.
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.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 24, 337–346.
Frazier, G. L. (1983). On the measurement of interfirm power in channels of distribution. Journal of Marketing Research, 20(May), 158–166.
Ganesan, S. (1994). Determinants of long-term orientation in buyer-seller relationships. Journal of Marketing, 58(1), 1–19.
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.
Gladstein, D. L. (1984). Groups in context: a model of task group effectiveness. Administrative Science Quarterly, 29, 499–517.
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.
Gundlach, G. T., & Achrol, R. S. (1993). Governance in Exchange: contract law and its alternatives. Journal of Public Policy & Marketing, 12(4), 141–155.
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.
Hoetker, G., & Mellewigt, T. (2009). Choice and performance of governance mechanisms: matching alliance governance to asset type. Strategic Management Journal, 30(1), 1025–1044.
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.
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.
Johnson, M. D., Herrmann, A., & Huber, F. (2006). The evolution of loyalty intentions. Journal of Marketing, 70(2), 122–132.
Joreskog, K. G., & Sorbom, D. (Eds.). (1993). LISREL 8:user’s reference guide. Chicago: Scientific Software International.
Lambert, D., & Harrington, T. (1990). Measuring nonresponse bias in mail surveys. Journal of Business Logistics, 11(2), 5–25.
Lessler, J. T., & Kalsbeek, W. D. (1992). Nonsampling error in surveys. New York: Wiley.
Leuthesser, L. (1997). Supplier relational behaviour: an empirical assessment. Industrial Marketing Management, 26(3), 245–254.
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.
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.
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.
Liu, Y., Li, Y., & Zhang, L. (2010). Control mechanisms across a buyer-supplier relationship quality matrix. Journal of Business Research, 63(1), 3–12.
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.
Lusch, R. F., & Brown, J. R. (1996). Interdependency contracting and relational behavior in marketing channels. Journal of Marketing, 60(3), 19–38.
Macintosh, G. (2007). Customer orientation, relationship quality, and relational benefits to the firm. Journal of Services Marketing, 21(3), 150–159.
Macneil, I. R. (Ed.). (1980). The new social contract: an inquiry into modern contractual relations. New Haven: Yale University Press.
Mallard, A. G. C., & Lance, C. E. (1998). Development and evaluation of a parent-employee interrole conflict scale. Social Indicator Research, 45, 343–370.
Miller, K. D. (1992). A framework for integrated risk management in international business. Journal of International Business Studies, 23(2), 311–331.
Moorman, C., Deshpande, R., & Zaltman, G. (1993). Factors affecting trust in market research relationships. Journal of Marketing, 57(1), 81–101.
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.
Nunally, J. C. (1978). Pshycometric theory (2nd ed.). New York: McGraw-Hill.
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.
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.
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.
Poppo, L., & Zenger, T. (2002). Do formal contracts and relational governance function as substitutes or complements? Strategic Management Journal, 23(8), 707–725.
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.
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.
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.
Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value and loyalty in relational exchanges. Journal of Marketing, 66(1), 15–37.
Torkzadeh, G., Koufteros, X., & Pflughoeft, K. (2003). Confirmatory analysis of computer self-efficacy. Structural Equation Modeling, 10(2), 263–275.
Ulaga, W., & Eggert, A. (2006). Relationship value and relationship quality. European Journal of Marketing, 40(3/4), 311–327.
Venkataraman, N. (1989). The concept of fit in strategy research: toward verbal and statistical correspondence. Academy of Management Review, 14(3), 423–433.
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.
Wathne, K. H., & Heide, J. B. (2004). Relationship governance in a supply chain network. Journal of Marketing, 68(1), 73–89.
Weitz, B. A., & Jap, S. D. (1995). Relationship marketing and distribution channels. Journal of the Academy of Marketing Science, 23(4), 305–320.
Williamson, O. E. (Ed.). (1985). The economic institutions of capitalism. New York: The Free Press.
Wilson, D. T. (1995). An integrated model of buyer-seller relationships. Journal of the Academy of Marketing Science, 23(4), 335–345.
Wray, B., Palmer, A., & Bejou, D. (1994). Using neural networks analysis to evaluate buyer-seller relationships. European Journal of Marketing, 23(2), 109–122.
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.
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.
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.
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.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
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
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40821-014-0011-z