Manufacturers Perspective of Retailers Power and Its Behavioural Consequences on Retailer-Manufacturer Outsourcing Relationship
GTU International Conference on 'Management of Globalized Business; Emerging Perspectives,' 2014
Posted: 20 Apr 2014
Date Written: February 22, 2014
Abstract
Purpose - The objectives of this research is to propose and test an effective conceptual model using selected behavioural constructs: "coercive power sources," "non-coercive power sources," "economic satisfaction," "non-economic satisfaction," "trust," "cooperation," "switching costs," and "commitment" and test in a distribution channel in the context of a Retailer and Manufacturer setting in India.
Method - This paper analyses primary data from 230 respondents from 128 apparel manufacturing through a structured questionnaire. Data was collected through Stratified simple random sampling eight strata's as Ahmedabad , Delhi and Delhi NCR, Indore, Jaipur, Ludhiyana, Mumbai, Surat and Tirupur.
Findings - India been a closed culture, just economic satisfaction w.r.t. monetary benefits to the manufacturer will not be sufficient to develop trust in relationship. Economic and non-economic satisfaction factors positively influence cooperation and trust among the Indian apparel retailer manufacturer relationship. Therefore, it is recommend that retailer who are engaged with manufacturers for direct outsourcing, must focus on trust and cooperation with Indian manufacturers.
Value/Originality - In vertical trade relationship, channel leadership in terms of locus of power is considered to be important in increasing channel efficiency. Also, western study on Power got less relevance for developing countries like India and very few studies of Indian supplier-buyer relationships have been published since economic liberalization in the 1990s. Specifically, previous channel relationship studies related to India (Kale, 1986; Frazier, Gill, and Kale, 1989) may no longer be applicable to the more current Indian market environment. A new study is needed to examine the dynamic Indian environment.
Keywords: Channel Relationship, Power, Retailer-Manufacturer relationship, Outsourcing relationship
JEL Classification: M00
Suggested Citation: Suggested Citation