The purpose of our paper is to develop a conceptual framework which explains the determinants of channel members' long-term orientation according to the relationship life cycle from an evolutionary perspective. For our discussion, we focus on a dyadic...
The purpose of our paper is to develop a conceptual framework which explains the determinants of channel members' long-term orientation according to the relationship life cycle from an evolutionary perspective. For our discussion, we focus on a dyadic relationship between a manufacturer and its supplier firms.
By conceptualizing a channel dyad as a living organism, we bring the lifecycle theory to explain how two parties in a relationship go through distinct phases along the passage of time. We draw on the literature of social psychology and use Thibaut and Kelley's (1959) inclusive theory of interpersonal attraction as our conceptual basis. Interpersonal attraction theory posits that the mechanism of how one party is likely to choose his/her partner; a party is likely to choose the following partners (1) with whom s/he has a greater opportunity to interact and (2) who has characteristics most desirable, (3) who are most similar to him in social backgrounds, (4) who sees as s/he sees himself, and (5) whose company leads to gratification of his needs. This theory suggests that one has to see some things that are valuable from his/her partner to continue to grow together within a relationship.
What is interesting is that what we want from a relationship can change as times passes. For example, when a relationship first starts we have little information about the intrinsic virtues of a potential partner and we tend to rely on external factors such as dependence in our choice criteria. As the relationship passes the initial exploratory stage, we begin to accumulate experiences with the partner, which enables a prediction of how the partner will act in the relevant relational affairs. Trust as "a particular level of the subjective probability with which an agent assesses that another agent or group of agents will perform a particular action that is beneficial or at least not detrimental to us" (Gambetta 1988, p.217), is important in the "build-up" stage for one to determine to continuously engage in cooperation with the partner. In the third mature stage, the relationship glue has to evolve from the calculative trust into something that is of a more secure nature. Benevolence is affect-based trust, the emotional security and bond partners develop for each other. When we affectively trust the partner we believe that the partner will honestly work for us even without control mechanisms. The last stage is declining stage when the both partners lose interest and energy to sustain the relationship and eventually the relationship dies out.
By bringing the time dimension, we adopt an evolutionary approach to interfirm relationships. We identity the four stages in a relationship life cycle as the following: (1) exploratory stage, (2) build-up stage, (3) mature stage, and (4) declining stage (Jap and Ganesan, 2000). The determinant of long-term orientation by these four lifecycle stages is identified in Table 1. In the next sections, we develop research propositions for the determinant of interfirm long-term orientation for each relationship life cycle phase.
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Determinants of Interfirm Long-Term Orientation (LTO): Definitions
In this section, we provide conceptual definitions for our focal constructs. First, a manufacturer's long-term orientation is the perception of interdependence of outcomes in which both a supplier's outcomes and joint outcomes are expected to benefit the manufacturer in the long run (Kelly and Thibaut 1978).
Manufacturer's dependence on its supplier refers to a manufacturer's need to maintain the channel relationship with its suppliers achieve desired goals (Frazier 1983). Heide and John (1988) indicate that dependence of manufacturer on supplier is increased when (1) outcomes obtained by the manufacturer from the supplier are important and highly valued and the magnitude of the exchange is high, (2) outcomes obtained by the manufacturer exceed outcomes available to the manufa