Joseph P. Cannon

An Examination of the Nature of Trust in Buyer-Seller Relationships

The authors integrate theory developed in several disciplines to determine five cognitive processes through which industrial buyers can develop trust of a supplier firm and its salesperson. These p...

Buyer-Supplier Relationships and Customer Firm Costs

Academic literature and business practice are directing increased attention to the importance of creating value in buyer–supplier relationships. One method for creating value is to reduce costs in commercial exchange. The authors develop a model that explains how supplier behaviors and the management of suppliers affect a customer firms direct product, acquisition, and operations costs. The model proposes that these costs mediate the relationship between buyer–supplier relationship behaviors and the customer firms intentions to expand future purchases from the supplier. The model is tested on data collected from almost 500 buying organizations in the United States and Germany. The results indicate that increased communication frequency, different forms of supplier accommodation, product quality, and the geographic closeness of the suppliers facilities to the customers buying location lower customer firm costs. In addition, customer firms intend to increase purchases from suppliers that provide value by lowering each of these costs.

Contracts, Norms, and Plural Form Governance

The organization of interfirm exchanges has become of critical importance in today’s business environment. Many scholars have criticized the inadequacies of legal contracts as mechanisms for governing exchange, especially in the face of uncertainty and dependence. Other scholars argue that it is not the contracts per se but the social contexts in which they are embedded that determine their effectiveness. This study investigates the performance implications of governance structures involving contractual agreements and relational social norms, individually and in combination (plural form) under varying conditions and forms of transactional uncertainty and relationship-specific adaptation. Hypotheses are developed and tested on a sample of 396 buyer-seller relationships. The results provide support for the plural form thesis—increasing the relational content of a governance structure containing contractual agreements enhances performance when transactional uncertainty is high, but not when it is low. Implications for theory and future research are discussed.

Slotting allowances and fees : schools of thought and the views of practicing managers

Slotting allowances and fees have attracted considerable attention and controversy since their introduction in the mid-1980s. Currently, two schools of thought dominate the debate on these fees. One considers them a tool for improving distribution efficiency, whereas the other proposes that the fees operate as a mechanism for enhancing market power and damaging competition. Managers and public policymakers are uncertain as to the effects of slotting fees and the appropriate strategy to adopt. The current study attempts to inform the debate surrounding slotting fees and provide guidance to managers and policymakers. The authors summarize the arguments of the two schools and investigate the views of managers toward them through a large-scale survey of manufacturer, wholesaler, and retailer grocery institutions. Though exploratory, the findings suggest that slotting fees shift the risk of new product introductions and help apportion the demand and supply of new products. The authors find that slotting fees are also associated with the exercise of retailer market power, are applied in a discriminatory fashion, and lead to higher retail prices. The authors encourage further research that examines slotting fees and their effects and indicate prospective directions.

Customer Satisfaction in Transnational Buyer-Supplier Relationships

This study analyzes customer satisfaction in buyer–supplier relationships across national boundaries (transnational business relationships) with manufacturing firms on both sides of the dyad. The analysis is based on data from 511 industrial customers from the United States and Germany, 201 of which reported on a transnational relationship. The results indicate that quality and flexibility are important antecedents of customer satisfaction. These antecedents were significantly lower in transnational relationships than in domestic ones. Using equity theory and the confirmation/disconfirmation paradigm, the authors develop alternative models for describing the relationships between customer satisfaction and its antecedents in transnational as opposed to domestic relationships. The findings reveal that there are no structural differences between transnational and domestic relationships regarding the relationships between customer satisfaction and its antecedents. Specifically, a lower level of customer satisfaction in transnational relationships is due to lower levels of the antecedents and does not constitute an effect of transnationality per se.

Governance of International Business Relationships: A Cross-Cultural Study on Alternative Governance Modes

The authors examine the effects of both transnationality (cross-border versus domestic exchange) and national culture (U.S. versus German buyers) on the use of three primary modes of governance: (1) the market mechanism, (2) trust, and (3) formal contracts. Drawing on theory, the authors develop a series of hypotheses. Then, they test the model on a sample of more than 500 buyer–supplier relationships. The results show that transnationality and culture both affect the choice of governance modes.

Free Riding and Resale Price Maintenance: Insights from Marketing Research and Practice

Although a topic of considerable interest and debate for nearly 100 years, antitrust understanding of resale price maintenance (RPM) has been informed primarily through theory developed in antitrust economics with limited empirical evidence. Addressing calls for research on RPM and its related practices, the current article draws upon existing academic and practitioner research in marketing to identify relevant insights and findings for understanding the primary justification for RPM—the so-called free rider explanation. Through its examination of research on multi-channel shopping and multi-channel marketing, distribution, retailing, and customer management, the article augments antitrust understanding in important and novel ways.

Resale Price Maintenance After Leegin: Behavioral, Evolutionary, and Institutional Insights for Advancing the Free Rider Thesis

Resale price maintenance (RPM) is a controversial channel pricing strategy that restricts the price at which a product can be resold. Contemporary understanding of RPM is derived mainly from economics, in which various perspectives have been applied to explain its use and effects. Motivated by a recent Supreme Court decision that altered prior restrictions on the use of minimum RPM, the authors propose three new perspectives and related theoretical propositions to enhance understanding of the primary procompetitive explanation of minimum RPM: the free rider thesis. The perspectives and propositions advance knowledge of RPM in ways that are important to academic scholarship, public policy, and managerial practice.