Conflict and Performance in Channels: A Comparative Synthesis of Empirical Findings

Author(s): Kamran Eshghi and Sourav Ray
Web Index: 2015-06
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We conduct a comprehensive meta-analysis of the literature on the role of channel conflict in channel performance. In particular, we assess the existing empirical evidence to compare two rival views of conflict. In the first view, conflict is a residual outcome of business processes that reduces joint profit and is efficiency depleting. Reduction or elimination of conflict is the firms’ objective. In the second view, conflict is an inevitable part of the channel’s business process and is a mediating construct that affects channel performance. Here the firms focus their efforts not so much on conflict “reduction” as on conflict “management” such as conflict resolution techniques to maximize business performance. We adopt the popular Trust- Commitment and Interdependence models as our theoretical bases and the Intrachannel conflict model to integrate the empirical evidence on conflict, its antecedents, and consequences. We find that models in which conflict acts as a mediating construct outperform models in which conflict acts an outcome construct. We also find that models based on the Trust-Commitment perspective outperform models based on the Interdependence perspective in explaining the relationships among conflict, performance and some other key relational channel constructs. We base our conclusions on analyses performed using a two-stage meta-analytic structural equation modeling (TSSEM) technique.

Valuation Insight

Eshghi and Ray consider the impact on business valuation of inefficient transactions due to distribution channel conflicts. The paper performs a meta-analysis regarding the relationship between channel conflict and financial business performance based on empirical results from five decades of scholarly studies. The aggregate results suggest a negative link between conflict and performance. Eshghi and Ray then discuss different ways to manage conflict and mitigate its adverse impact on valuation.
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