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Managing International Distribution Channel Partners: A Cross-CulturalApproachRajiv Mehta a; Rolph E. Anderson b; Alan J. Dubinsky cd; Pia Polsa ef;Jolanta Mazur g

a School of Management, New Jersey Institute of Technology, Newark, New Jersey, USA b LeBowCollege of Business, Drexel University, Philadelphia, Pennsylvania, USA c Sogang Business School,Sogang University, Seoul, Korea d Center for Sales Innovation, St. Catherine University, St. Paul,Minnesota, USA e Hanken School of Economics and Business Administration, Helsinki, Finland f

School of Management, Fudan University, Shanghai, China g Warsaw School of Economics, Warsaw,Poland

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To cite this Article Mehta, Rajiv , Anderson, Rolph E. , Dubinsky, Alan J. , Polsa, Pia andMazur, Jolanta(2010) 'ManagingInternational Distribution Channel Partners: A Cross-Cultural Approach', Journal of Marketing Channels, 17: 2, 89 — 117To link to this Article: DOI: 10.1080/10466691003635051URL: http://dx.doi.org/10.1080/10466691003635051

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Managing International Distribution ChannelPartners: A Cross-Cultural Approach

RAJIV MEHTASchool of Management, New Jersey Institute of Technology, Newark, New Jersey, USA

ROLPH E. ANDERSONLeBow College of Business, Drexel University, Philadelphia, Pennsylvania, USA

ALAN J. DUBINSKYSogang Business School, Sogang University, Seoul, Korea, and Center for Sales Innovation,

St. Catherine University, St. Paul, Minnesota, USA

PIA POLSAHanken School of Economics and Business Administration, Helsinki, Finland, and

School of Management, Fudan University, Shanghai, China

JOLANTA MAZURWarsaw School of Economics, Warsaw, Poland

Although the topic of conflict has been extensively studied in thedistribution channels literature from a domestic perspective, thereis relatively little published research examining the constructwithin the international distribution channels context. This is ofparticular concern because cross-national channel partnershipsare on the rise, and divergent cultures may engender heightenedconflict, which has a deleterious effect on channel performance.This article explores the extent to which different channel leader-ship styles, predicated on Hofstede’s dimensions of nationalculture, can be effective strategies to manage conflict in inter-national distribution channels. Specifically, the article examineswhether the relationship between leadership style and conflict ininternational distribution channels is moderated by national

The authors gratefully acknowledge the valuable feedback and contributions of thereviewers and the editor.

Address correspondence to Rolph E. Anderson, PhD, Royal H. Gibson Sr. Professor ofMarketing, LeBow College of Business, Drexel University, Philadelphia, PA 19104, USA.E-mail: [email protected]

Journal of Marketing Channels, 17:89–117, 2010Copyright # Taylor & Francis Group, LLCISSN: 1046-669X print=1540-7039 onlineDOI: 10.1080/10466691003635051

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culture. Additionally, the impact ofmanifest conflict on internationalchannel partner performance is investigated. A conceptual modeland research propositions are developed. The use of leadership stylesto manage disagreements among international channel partners isargued to be culturally specific. International channel managementimplications and directions for future research are suggested.

KEYWORDS channel conflict, channel leadership styles, channelmanagement, Hofstede, partnering

INTRODUCTION

In the 1970s and 1980s, marketing scholars devoted a great deal of attentionto power and conflict (Frazier, 1999), which were the dominant topics in thedistribution channels literature. However, from the 1990s onward, attentionin the marketing literature turned toward relationship marketing, focusingon constructs such as trust, commitment, and cooperation. This may belargely owing to organizations’ emphasis on creating new alliances and part-nerships to better compete in the competitive global environment (Gaughan,2002; Mergerstat Review, 2001), unremitting growth in formation of strategicalliances within Europe (Schoenberg, Denuelle, & Norburn, 1995), andincreasing strategic reorganization in Southeast Asia (Gaughan). With thisdynamism in place, marketing scholars began to investigate techniques thatenable partnerships to integrate smoothly and thrive.

Given the increase in various forms of strategic alliances and the scholarlyfocus on cooperation in such alliances, how many firms successfully attainsmooth integration and collaboration is unclear (Wittmann, Hunt, & Arnett,2009). Studies of alliances have shown failure rates of close to 50% (Inkpen& Ross, 2001). Furthermore, Bleeke and Ernst (1995) stated that the medianlife span for alliances is only about 7 years and that nearly 80% of joint ventures(one form of alliance) ultimately end in a sale by one of the joint venturepartners. These two studies imply that successful coalescence amonginter-organizational partners is fraught with difficulty and that conflict islikely to emerge in such situations, especially when alliances cross nationalborders. Indeed, Schoenberg et al. (1995, p. 8) stated that in cross-nationalpartnerships ‘‘ . . . the potential for conflict may well be inherent.’’

Despite the probability that the scope for conflict increases as the num-ber of cross-border alliances increases (Norburn & Schoenberg, 1994), thereis a paucity of research that suggests how conflict between international dis-tribution channel partners should be managed. Further, the extant inter-national distribution channels literature tends to be more descriptive thannormative. Whereas, the research literature has examined conditions thatare antecedents and consequences of conflict in international channels, it

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has virtually neglected the study of proactive conflict management in distri-bution to reduce the deleterious effects of conflict on channel partnerperformance (Duarte & Davies, 2003; Vaaland & Hakansson, 2003; Nordin,2006; Zhou, Zhuang, & Yip, 2007; Chang & Gotcher, 2010; Zhuang & Tsang,2010), which can lead to long-term, successful collaborative relationships(Wong, Tjosvold, & Zhang, 2005; Spekman & Carraway, 2006; Ploetner &Ehret, 2006). For example, Shoham, Rose, and Kropp (1997) examined twodeterminants of international channel conflict. They found that the moreculturally distant the target market is from the exporter and the lower the dis-tribution system quality, the higher the level of conflict in the channel.Accordingly, they averred that conflict is an important consideration and thatcultural distance should serve as a red flag to managers. In short, frequentface-to face visits may help mitigate this situation.

Although differing manufacturer-distributor perspectives have beenfound to cause conflict in distribution channels in the United States, thesituation may be compounded in the international arena. Different culturalperspectives influence distributor attitudes and behavior, which may causeintense disagreements—manifest conflict—beyond those found withindomestic distribution channels. Indeed, research suggests that culture cansignificantly affect distribution channel structure, strategy, and relationshipsamong international channel partners (e.g., Hall, Knapp, & Winsten, 1972;Shimaguchi & Rosenberg, 1979; Kaikati, 1993; Rose & Shoham, 2004; Byrne& Bradley, 2007; Nevins & Money, 2008; Lohtia, Bello, & Porter, 2008;Skarmeas, Katsikeas, Spyropoulou, & Salehi-Sangari, 2008). Based on thefindings from those studies, one can infer that for international channel stra-tegies to be successful, channel leaders should take into consideration thecultural context when seeking to proactively attenuate conflict among chan-nel partners. This knowledge is important because developing internationaldistribution channels requires tremendous time and capital investment andinvolves considerable risk. Consequently, there is much at stake if conflictmanifest between international channel partners is not managed because itcan inevitably result in failure of a firm’s overseas marketing program.

Unfortunately, studies advocating how channel leaders should proac-tively manage manifest conflict with their international distribution partnersare virtually nonexistent. Furthermore, recognizing cultural differences fromcountry to country, the international marketing literature suggests that stan-dardized approaches may not be appropriate especially in managing theinterrelationships between manufacturers and their international channelpartners.

To help fill this gap in the literature, this article examines whetherdistribution channel leadership paradigms developed in the United Statesto manage conflict between a firm and its international distribution partnerscan be extended to other cultural settings. Admittedly, research has foundthat certain leadership styles (those examined here) are invariant with the

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impact they have on managing distribution conflict (Schul, Pride, & Little,1983). However, whether distribution channels research based on domesticsettings (largely the United States) can be extended to the international con-text is unknown. Thus, one potential contribution of our work is describing aset of conditions (culture) under which leadership styles do vary in theireffectiveness in managing international channel partner conflict. Specifically,this research seeks to investigate whether national culture moderates theimpact of leadership style on manifest conflict, which, in turn, influenceschannel partner performance. In particular, it focuses on discerning whichleadership styles may be appropriate to employ when managing the interre-lationships between manufacturers and their channel partners in differentcross-national settings.

We begin with a review of the relevant literature on the focal constructs:leadership, manifest conflict, and national culture. A conceptual model isthen presented and discussed. Next research propositions vis-a-vis the fore-going key constructs are proffered. The article concludes with internationalchannel management implications and directions for future research.

BACKGROUND LITERATURE

Distribution channels have traditionally been viewed as a network composedof interdependent institutions that have banded together for purposes oftrade (Rosenbloom, 2004) and mutual advantage (Kotler & Keller, 2009).Despite the differing goals of independent channel partners, the distributionchannel needs to function effectively as an integrated system so as to reducethe redundancy of work effort and the possibility of the inefficient allocationof distribution tasks and functions among channel participants (Ridgeway,1962). To achieve this in an intensely competitive global environment, orga-nizations have recognized the need to develop long-term relationships andforged coalitions and arrangements with their international channel partnersin which the distribution channel operates as an integrated inter-firm systemunder the leadership of one participant (English & Michie, 1985; Etgar &Valency, 1983).

More recent evidence indicates that firms have been employing rela-tional exchanges as a means of attaining competitive advantage (Webster,1992; Mehta, Larsen, Rosenbloom, & Ganitsky, 2006; Hult, Ketchen, &Chabowski, 2007). This has led to the development of long-term buyer-sellerrelationships by forging coalitions and partnerships among channel parti-cipants (Fontenot & Wilson, 1997). Despite these arrangements, however,partner asymmetries (Harrigan, 1988) may exist that can create an unequalbalance of power. Thus, a dominant partner may emerge as the de factoleader even in highly ordered, relational exchange social systems such as dis-tribution channels. Consequently, the need for leadership in distribution

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channels continues to be important despite the move from discrete torelational exchanges.

There is general acceptance that behavior in interorganizational systemssuch as distribution channels is comparable to behavior in intraorganiza-tional settings (see, for example, Reve & Stern, 1979; Frazier, 1983; Frazier& Sheth, 1985; Stern & Brown, 1969). Thus, Lucas and Gresham (1985) andSchul et al. (1983) have advocated that our knowledge of the impact leader-ship styles have on various channel partner behaviors should be advanced byexamining and applying relevant leadership theories to the distributionchannels context.

Leadership Theories

Research on the schools-of-leadership theory, thought, and practice can bebroadly categorized into the trait approach, behavioral approach, situationalapproach, and power-influence approach (Stoner, Freeman & Gilbert, 1995;Higgins, 1994; Yukl, 1981). The trait approach, though not particularly usefulbecause it yields inconsistent results (e.g., Yukl, 1981), concentrates on suchhuman traits as honesty, enthusiasm, intelligence, dominance, and persever-ance, among others, which distinguish a leader from a non-leader and the iden-tification of those characteristics that would make for a more effective leader.

Behavioral leadership theory focuses on describing leaders on the basisof leadership functions, behaviors, and styles such as leader considerationand initiating structure. Leadership behaviors have been further categorizedinto work-centered styles and people-centered styles that include autocratic,bureaucratic, and participative behaviors and styles (Stoner et al., 1995;Higgins, 1994).

The power-influence approach, which occupies a central place in chan-nels literature, attempts to explain leader effectiveness in the source andamount of power available to leaders and the manner in which leaders exer-cise power over followers. Based on the seminal work of French and Raven(1959), the leader draws power from power bases, which include reward,coercive, referent, legitimate, and expert power. Other power-influencealternatives include social exchange theory, Hollander’s theory of idiosyn-cratic credits, and leader-member exchange theory, all of which offer alterna-tive explanations of how the reciprocal process of influence between leadersand followers occurs over time (Stoner et al., 1995; Higgins, 1994).

Finally, the situational approach to leadership, most often referred to asthe contingency approach, posits that a leader’s influence on subordinates iscontingent upon particular situational moderator variables. Considerableemphasis has been devoted to the study of situational leadership, andresearch has identified the following factors as being determinants of effec-tive leadership: the leader’s personality and past experience; the expectationsand behavior of superiors; the characteristics, expectations, and behavior of



subordinates; and the behavior and expectations of peers. Attempts to offeralternative explanations of leadership have surfaced in such theories asFiedler’s contingency theory of leadership, Hersey and Blanchard’s situa-tional leadership theory, and House’s path-goal theory of leadership (Stoneret al., 1995; Higgins, 1994; Yukl, 1981).

Leadership theories generally explain ways in which a leader can effec-tively secure subordinate compliance and collaboration, which are oftenreferred to as the transactional form of leadership: An exchange or ‘‘trans-action’’ takes place between a leader and subordinate (Burns, 1978; Stoneret al., 1995; Higgins, 1994). However, in an effort to identify behaviors thatprior leadership theories have not considered, the transformational theoryof leadership has been advanced (Bass, 1985a, 1985b; Conger & Kanungo,1995; Deluga, 1995). This leadership alternative extends the notion of trans-actional leadership to include four characteristics that are central for leadereffectiveness: (1) charismatic and visionary leadership, (2) inspiration, (3)intellectual stimulation, and (4) individualized consideration (Bass 1985a,1985b; Conger & Kanungo, 1995). Applicable mainly to the intraorganiza-tional setting, a transformational leader has the ability to take an organizationthrough a major strategic change or revitalization program. Transformationalleaders use charisma to motivate subordinates to levels of performancehigher than is expected of them, get subordinates to transcend their ownself-interests for the sake of the team or organization, and raise subordinatesneed level to higher-order needs such as self-actualization (Bass 1985a,1985b). Having sustained considerable attention by scholars in the organiza-tional sciences and sales management, the transformational model and otherrelated leadership theories may hold great promise for intraorganizationalsettings. Currently, however, their role in interorganizational distributionchannels research remains unclear. Thus, they were not included in thepresent work.

Leadership in Distribution Channels

Channel leadership can be conceptualized as the activities performed by thechannel leader to influence the marketing policies and strategies of channelpartners (El-Ansary & Robicheaux, 1974; Lai, 2007). This has led marketingscholars to suggest that the distribution channel’s effectiveness and long-runsurvival are significantly influenced by the leader’s exercising appropriatebehaviors to induce channel partners to coalesce and perform at a superiorlevel (Coughlan, Anderson, Stern & El-Ansary, 2006; Rosenbloom, 2004).

For more than a generation, distribution channels scholars werepreoccupied with studying leadership by focusing primarily on the control,power, and power bases—the power-influence theory of leadership. Repre-senting only one among several competing leadership theories, the power-influence approach has occupied a prominent place in the channels literature

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as is evident by the extensive research attention it has sustained. The majorthrust of distribution channels research has focused on how channel leadersacquire and employ the bases of power (French & Raven, 1959) to secure thecompliance, alter the behaviors, and exercise control over channel partners,and determine the factors associated with the emergence of channel leaders(Brown & Frazier, 1978; Etgar, 1976, 1977, 1978; Hunt & Nevin, 1974; Lusch &Brown, 1982). By focusing chiefly on the power-influence approach as ameans of exercising leadership, however, scholars have overlooked otherimportant theories of leadership that may also be particularly applicable tothe distribution channels setting.

English and Arnold (1987), in applying concept of leadership to distri-bution channels, reveal the intricate nature of this construct. In their concep-tual treatise on channel control, they dichotomize channel leadership. Thefirst dimension views leadership as an inter-firm influence strategy used toalter channel partner perceptions and=or behaviors via communication,information exchange, and recommendations—the focus of most channelsresearch (Frazier & Summers, 1984; Boyle, Dwyer, Robicheaux, & Simpson,1992). The second dimension, leadership styles, reflects the strategies a leaderemploys to secure compliance of channel partners. Leadership styles, whichare central to one of the competing situational theories of leadership—thepath-goal theory—have been conceptually and empirically linked to channel-related phenomena such as cooperation, channel efficiency and effec-tiveness, role clarity, role conflict, role ambiguity, and channel membersatisfaction (English & Arnold, 1987; Price, 1991a, 1991b; Schul et al., 1983;Barnett & Arnold, 1989; Schul, 1987; El-Ansary & Stern, 1972).

Path-Goal Theory of Leadership

The path-goal theory of leadership (House, 1971; House & Mitchell, 1974),which has its roots primarily in the political sciences and sociology domains,has garnered tremendous research interest in organizational behavior.Originally formulated by Evans (1970), extended by House (1971), and refinedby House and Mitchell (1974), the path-goal theory, like other contingencyapproaches, attempts to predict leadership effectiveness in different situa-tions. It extracts and extends the key elements of leader consideration andinitiating structure around which behavioral leadership theory is centered.

Working through an exchange process that takes place between a lea-der and his or her subordinates, path-goal theory posits that the leader canaffect the level of satisfaction, motivation, and performance of group mem-bers by using appropriate leadership styles in several ways (House, 1971;House & Mitchell, 1974; Stoner et al., 1995). First, the leader can makerewards contingent upon the achievement of organizational goals and objec-tives. Second, the leader can increase the rewards valued by group membersby determining which rewards are important and by increasing those



rewards that are consistent with their needs and wants. And third, the leadercan aid team members to obtain rewards that are valued by clarifying theirpaths to those goals by removing obstacles to performance, and by providingthe necessary direction and support to ensure that their goals are compatiblewith the overall objectives of the organization (House, 1971; House &Mitchell, 1974; Stoner et al., 1995).

As such, a leader’s behavior is effective when it is viewed by team mem-bers as an immediate or future source of satisfaction. In essence, a leader’sbehavior is motivational to the degree that it makes team members’ needsatisfaction contingent on effective performance and provides the guidance,coaching, support, and rewards that are necessary for effective performance.

According to House and Mitchell (1974), participative, supportive, direc-tive, and achievement-oriented leadership styles constitute the key elementsof path-goal theory.

PARTICIPATIVE LEADERSHIP STYLE

A participative leadership style is one in which subordinates are able to influ-ence decisions about their work situation to a large degree (Teas, 1982). Thisleadership style is similar to participative management in which subordinatesshare a significant degree of decision-making power with their superiors (House& Mitchell, 1972; Robbins, 2003). In a distribution channels context, a participa-tive leader consults with channel partners, solicits their suggestions, and consid-ers these suggestions in making decisions in developing channel-wide policiesand procedures (Schul, 1987; Schul et al., 1983; Schul, Little, & Pride, 1985).

SUPPORTIVE LEADERSHIP STYLE

A supportive leadership style is one in which a leader fosters an environmentof psychological support, helpfulness, friendliness, mutual trust, and respect(Daft, 2005). A supportive leader considers other channel partners’ needsand well-being, looks out for their welfare, creates a pleasant atmosphere forinteraction, accentuates other channel accomplishments, attempts to establishmutual interest, and builds a team climate (Schul, 1987; Schul et al., 1983, 1985).

DIRECTIVE LEADERSHIP STYLE

A directive leadership style is one in which a leader provides specific direc-tion to subordinate work activity (Gibson, Ivancevich, & Donnelly, 1988;House & Mitchell, 1974). In a distribution channel setting, these activitiesentail the channel leader’s planning, organizing, coordinating, andmaintainingoverall control over channel operations. A directive leader consistentlycommunicates to channel partners channel-wide objectives, policies, rulesand regulations, and operating procedures that should be followed in

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performing distribution tasks and marketing functions (Dwyer & Oh, 1987;Schul et al., 1983, 1985).

ACHIEVEMENT-ORIENTED LEADERSHIP STYLE

An achievement-oriented leadership style emphasizes the achievement ofdifficult tasks and the importance of excellent performance and simul-taneously shows confidence that group members will perform well. It entailssetting challenging goals (Higgins, 1994; House, 1971; House & Dessler,1974; House & Mitchell, 1974; Robbins, 2003; Stoner et al., 1995).

In justifying the application of the path-goal theory to the channelscontext, Barnett and Arnold (1989) maintain that only participative, support-ive, and directive leadership styles1 are germane for distribution channel man-agement. They, however, do not explicitly specify why achievement-orientedleadership styles are irrelevant. A plausible explanation is that theRobinson-Patman Act of 1936 legally prohibits manufacturers from givingrewards or engaging in a variety of forms of price discrimination that may tendto lessen competition (Rosenbloom, 2004). Only under certain circumstancesare price differentials allowed to be given to different channel members. Inthe majority of the circumstances, all channel participants of a particular class(e.g., full-service retailers) must be offered similar terms, conditions, and pro-motional allowances. Indeed, a manufacturer that gives differential rewardscould possibly be breaching commercial and anti-trust laws.2

1The article examined only participative, supportive, and directive leadership styles forfour reasons. First, as already noted, Barnett and Arnold (1989) espouse that these three stylesare especially relevant in distribution channel management. Second, these three offer a rangeof distinctly different leadership styles; this situation allows for unique explained variance tobe extracted vis-a-vis the leadership style=manifest conflict relationship. Third, each of thethree is an action-oriented leadership style; given that distribution channels tend to have lea-ders to function as an integrated team of channel partners, including less active leadershipstyles seemed inappropriate. Fourth, we employed participative, supportive, and directiveleadership styles to be compatible with the distribution channels literature.

2Other leadership styles could also have been included in the model. For instance, thelaissez faire leadership style identified by Lewin, Lippit, and White (1939) was not includedin the model because distribution channel partners cannot be ‘‘left to their own devices’’(Rosenbloom, 2004). Because distribution channels are viewed as an interorganizational net-work of interdependent firms that coalesce for collective and individual goals, it is necessaryfor a channel leader to coordinate performance of distribution functions, thus reducing thepossibility of the inefficient allocation of distribution tasks among channel participants(Ridgeway, 1962). Much to the contrary, distribution channels should not be left to evolveor else they will suffer the consequences of entropy (Rosenbloom, 2004). Consequently, aschannel leadership is necessary for the distribution channel to operate as a highly efficientintegrated network, the inclusion of laissez faire leadership style seemingly could not be jus-tified. Democratic and autocratic leadership styles (Lewin et al., 1939), however, wereimplicitly included in the model, as they conceptually overlap with participative and directiveleadership styles, respectively.



In sum, a channel leader may exhibit varying degrees of participative,supportive, and directive leadership styles. Moreover, a channel leadermay exhibit all three behaviors simultaneously or have a greater propensityfor using one style over the other two. The foregoing discussion suggests thatparticipative, supportive, and directive leadership styles are conceptually dis-tinct, independent constructs but, because they can be displayed concomi-tantly, these behaviors may possibly be empirically related.

MANIFEST CONFLICT

Conflict has traditionally been a central construct in distribution channelsresearch because by managing the process of channel conflict, the perform-ance of the overall distribution channel can be improved (Lusch, 1976; Reve& Stern, 1979; Zhou et al., 2007; Chang & Gotcher, 2010; Zhuang & Tsang,2010). Conflict occurs when tension arises between actors owing to incom-patibility (Pondy, 1967). A review of distribution channels literature revealsthat conflict has primarily been defined and examined in terms of manifestconflict. That is, conflict in distribution channels is manifest when one chan-nel partner behaves in a manner that impedes another channel partner fromachieving its goals, thus leading to tension (Coughlan et al., 2006; Gaski,1984; Vaaland & Hakansson, 2003; Zhuang & Tsang, 2010).

Manifest conflict is virtually inevitable in distribution channels (Pondy,1967) and is often not a result of opportunism but rather a genuine differencein needs, preferences, and perceptions (Aulakh & Madhok, 2002; Zhou et al.,2007). It can arise from a variety of sources, such as perceptual differences,different expectations, and communication difficulties, among others(Cadotte & Stern, 1979); channel partners seek to maintain the tension arisingfrom conflict at a constructive level. When conflict escalates, performance ofthe distribution channel suffers, and the conflict becomes dysfunctional(Rosenbloom, 1973; Frazier, Gill, & Kale, 1989; Cronin & Baker, 1993; Duarte& Davies, 2003; Vaaland & Hakansson, 2003; Nordin, 2006). Thus, an under-standing of how to effectively manage distribution channel conflict and, inthe process, minimize its negative impact on performance is critical forchannel managers.

Despite its importance, there is a paucity of research on conflict in inter-national distribution channels; moreover, in the extant studies, there havebeen conflicting findings. For example, Johnson, Sakano, and Onzo (1990)examined how the perceptions of influence affected control and conflict inU.S.–Japanese distribution channels. They found that Japanese distributorsreacted to control similarly to Occidental channel partners. Specifically, highlevels of control in Japanese distribution channels increased conflict to thepoint of being dysfunctional, just as it has been found to do in Westernchannels. However, in a later study, Johnson, Sakano, Cote, and

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Onzo (1993) observed that Japanese distributors do not view power sourcesin the same way as western distributors. Griffith, Hu, and Ryans (2000) ascer-tained that within certain cultural types, the linkage between conflict and sat-isfaction is diminished. That is, certain cultural types may report less conflictthan others, until a threshold level of conflict is reached, at which point therelationship may be terminated. Similarly, Shoham et al. (1997) reported thathigh cultural distance increased conflict, which, in turn, reduced satisfaction.In another study, Balabanis (1998) found that higher cooperation, flexibility,and solidarity norms among channel partners helped to alleviate conflict.Collectively, these findings indicate that international distribution channelpartners may need to adapt their process of relationship management acrosscultures.

The contention that channel management strategies across different cul-tures may require adaptation has been reinforced by studies on conflict inother forms of alliances (Welch & Wilkinson, 2005). Cullen, Johnson, andSakano (1995) found that conflict reduces commitment in international jointventures and conflict leads to poor performance in international joint ven-tures (Killing, 1983; Lane & Beamish, 1990; Ding, 1997). Additionally, Lylesand Salk (1996) posited that culture-related conflicts affect knowledge acqui-sition in international joint ventures. Accordingly, these studies suggest thatcultural differences may be an important impediment to a smooth operationof international distribution channels.

NATIONAL CULTURE

Reflecting a complex phenomenon, frameworks or models of culture havebeen developed to help us understand it better (Hall, 1977, 1983, 1987; Hall& Hall, 1990; Trompenaars & Hampden-Turner, 1998). Culture is learned andshared among a group of people. People from a given culture exhibit similarnorms and values and, therefore, culture affects the values found in theworkplace (e.g., Hofstede, 1991). Probably the most famous study of cultureas it relates to the workplace was performed by Hofstede (2001). Althoughthere are limitations to his study, it is a good starting point for managers toassess the impact of culture on management practices. Also, it has been repli-cated many times with diverse samples in different settings (Hill, 2003). Thus,the Hofstede framework was used in the present article. According to hiswork, societies differ on four main dimensions.3

3Four dimensions were initially identified in Hofstede’s original study. Later a fifth dimen-sion was added, originally referred to as Confucian Dynamism but now often referred to aslong- vs. short-term orientation. Because there is evidence that this dimension and the indi-vidualism vs. collectivism dimension are highly correlated (Yeh & Lawrence, 1995), the long-vs. short-term orientation dimension was excluded in the current work.



Individualism Versus Collectivism

This dimension focuses on the relationship among people in a society. In indi-vidualistic cultures, ties between people are loose, and people look out fortheir own self-interest. The emphasis in the society is on individual achieve-ment, and individuals expect their achievements to be acknowledged. Thegroup is expected to be better off if each individual strives for his or herown interest. Conversely, in collectivist societies, it is expected that individualrights are to be sacrificed for the good of the group. People identify with anddepend on the group. Achievement of the group, rather than the individual, isrecognized. It is expected that interdependence among group members andloyalty to the group will lead to the success of the group as a whole.

Strong Versus Weak Uncertainty Avoidance

This dimension focuses on the extent to which people in a society arecomfortable in ambiguous situations. Cultures with strong uncertainty avoid-ance are very uncomfortable with ambiguity. Thus, these societies developstrong, formal rules and are not tolerant of deviation from those rules. Clear,articulated instructions are expected from a boss, for example. In weakuncertainty avoidance cultures, however, people are more willing to acceptrisks, and dissent is not as discouraged. Rules exist but are more easily chan-ged than in strong uncertainty avoidance cultures, and an emphasis in theworkplace is put on creating a friendly, comfortable environment.

Large Versus Small Power Distance

This dimension focuses on the degree of inequality in a society. In largepower distance cultures, theory suggests that power and wealth are distrib-uted unequally. Conversely, in small power distance cultures, all people inthe society are considered equal. This has an impact on responses to man-agement styles. There is more paternalism by management and more depen-dence by subordinates in large power distance countries, but there is moreinterdependence and trust between management and subordinates in smallpower distance cultures.

Masculine Versus Feminine

In masculine societies, an emphasis is placed on what Hofstede described as‘‘male’’ values, that is, on achievement, power, and materialism. Gender rolesin an organization are clearly delineated. In feminine societies, by contrast,an emphasis is placed on what Hofstede described as ‘‘female’’ values,including solidarity, equity, and concern for others. In these cultures, genderroles are more flexible.

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CONCEPTUAL MODEL AND RESEARCH PROPOSITIONS

The components of the article’s conceptual model (see Figure 1) and pre-sumed relationships among the constructs were derived from a review ofthe literature of the focal constructs offered in the preceding sections and asynthesis of past theoretical and empirical research.

National Culture–Leadership Styles Linkage

Drawn largely from the political sciences and sociology, the path-goal theoryhas obtained currency in the literature on cross-cultural management withthe development of the international contingency model of leadership. Thismodel suggests the use of different leadership styles is contingent upon cul-tural setting (Francesco & Gold, 1998; Hofstede & Bond, 1988; Kreitner, 2007;Rodrigues, 1990). Indeed, more recently, empirical evidence supports thecontention that leadership styles are related to national culture (Byrne &Bradley, 2007).

Research in the distribution channels context has shown that it is largelythrough the channel leader’s boundary personnel that the channel leaderexercises his or her leadership role (Schul et al., 1983; Frazier, 1983; Frazier& Summers, 1984; Anderson & Chambers, 1985; Anderson & Narus, 1991).The recipients of the channel leader’s influence attempts are the boundarypersonnel within the channel members’ organization. Thus, boundary

FIGURE 1 A theoretical model of leadership styles, manifest conflict, and channel partnerperformance: The moderating role of national culture.



personnel within a distribution channel system should understand the effectsof leadership styles on channel partner behaviors.

In other words, suppliers must deal with individual managers of theirinternational channel partners who may come from cultures that are differentfrom the cultures in which they work. The task may become even more com-plicated as subcultures, which may be substantial in size, characterize eachcountry. For example, in the United States, these subcultures may be genera-tional (e.g., baby boomer managers vs. millennial managers) or may reflectdifferent ethnic origins (e.g., Hispanic vs. Chinese managers). The impli-cation is that channel leader’s boundary personnel must be judicious inselecting appropriate leadership styles for managing conflict with their inter-national channel partners. Failure to recognize subcultural and cultural differ-ences may exacerbate distribution channel conflict. In sum, it is imperativethat suppliers be cognizant of the culture and subcultures of its channel part-ners so that they can tailor or match their leadership style to ‘‘fit’’ the bound-ary personnel of their international channel partners—many of whom maybe from different cultures or subcultures. Based on a synthesis of theoreticaland empirical research, shown in Table 1 are the proposed relationshipsamong the cultural dimensions of individualism, uncertainty avoidance,power distance, and masculinity and the participative, supportive, and direc-tive leadership styles.

Leadership Style–Manifest Conflict Linkage: Main Effect

Before we discuss the linkages among the focal constructs factoring the mod-erating effects of national culture, the main effect linkage between leadershipstyle and manifest channel conflict should be posited. This is importantbecause it explicitly shows how various leadership styles might differentiallyimpact manifest channel conflict.4

TABLE 1 A Contingency Paradigm for Leadership Styles: Summary of Cultural Hypotheses

Leadershipstyles

Cultural dimensions

Individualismversus

collectivismUncertaintyavoidance

Powerdistance

Masculinityversus

femininity

Individualism Collectivism Weak Strong Small Large Masculinity Femininity

Participative p p p pSupportive p p p pDirective p p p p

4The authors thank one of the anonymous reviewers for this idea.

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As a social system composed of channel partners, the distribution chan-nel is affected by such behavioral dimensions as power, roles, conflict, andsatisfaction, and all these constructs have been the focus of intensive inves-tigation. The frequency of interaction and the nature of interdependencebetween channel partners—who have independent and sometimes evendivergent goals—produce conflict. Though the majority of channel relation-ships are cooperative, some are inherently laden with conflict.

Conflict has been conceptualized as ‘‘the tension between two or moresocial entities (individuals, teams, or larger organizations), which arises fromthe incompatibility of actual or desired responses’’ (Raven & Kruglanski,1970, p. 70). In the channels context, conflict can be defined as ‘‘the situationin which one channel member perceives another channel member to beengaged in behavior that is preventing or impeding him from achieving hisgoals’’ (Lusch, 1976, p. 383; Coughlan et al., 2006). Further, when channelpartners become the subject of each other’s frustration, a state of conflict issaid to exist.

PARTICIPATIVE LEADERSHIP STYLE AND CHANNEL CONFLICT

Because conflict is inevitable in distribution channels, several channel scho-lars have suggested that a better understanding of conflict processes in distri-bution channels should lead to a reduction in its dysfunctional effects and, inthe process, improve the overall performance of the channel system (Lusch,1976; Rosenbloom, 1973). Therefore, a two-pronged approach to identifyfactors that cause an increase in conflict and factors that attenuate conflictis required. A channel leader, by soliciting opinions, suggestions, and ideason channel-related activities, engenders a cohesive team of channel partners.By allowing channel partners to participate in decision making, potentialconflicts can be identified beforehand and resolved before they actuallymanifest themselves. The potential for conflict to manifest itself is higherif the channel leader allocates distribution tasks without considering inputfrom the vantage point of channel partners. Therefore, participative behavioron the part of the channel leader can serve to attenuate manifest conflict is aplausible argument.

As noted, a participative leadership style is one in which subordinatesare able to influence decisions about their work situation. This leadershipstyle is similar to participative management in which subordinates share asignificant degree of decision-making power with their superiors. Althoughthe specific relationship between participative channel leadership behaviorand manifest conflict has not been empirically assessed in the channelssetting, findings reported in three studies show strong support for the con-tention that participative channel leadership is inversely associated withintra-channel conflict (Schul et al., 1983; Schul, 1987; Schul & Babakus,1988). Moreover, English and Arnold (1987), in developing a conceptual



framework on channel control, maintain that participative channel leadershipbehaviors produce the desirable outcomes of decreased functional conflictand managed functional conflict.

On the basis of the preceding theoretical discussion and empirical work,the following proposition is posited:

Proposition 1: Participative leadership styles demonstrated by the chan-nel leader will exhibit an inverse association with manifestconflict, as perceived by channel partners.

SUPPORTIVE LEADERSHIP STYLE AND CHANNEL CONFLICT

As noted earlier, a supportive leadership style is one in which the leaderfosters an environment of psychological support, helpfulness, friendliness,mutual trust, and respect and considers other channel partners’ needs andwell-being, looks out for their welfare, creates a pleasant atmosphere forinteraction, accentuates other channel accomplishments, attempts to estab-lish mutual interest, and builds a team climate. Being considerate of channelpartners’ needs and responsive to their problems by offering support, engen-dering trust, developing close, mutually rewarding working relationships,and creating a friendly and pleasant task environment are viable strategiesfor a supportive channel leader to attenuate conflict. This form of socio-emotional or expressive behavior is an effective means to foster the socialand normative integration of channel partners (House & Mitchell, 1974; Schulet al., 1983), which can inversely impact the level of conflict. Accordingly, it isreasonable to argue that supportive channel leadership behaviors can atten-uate manifest conflict (English & Arnold, 1987). Thus, the model in Figure 1portrays a negative association between supportive channel leadershipbehaviors and manifest conflict.

Findings reported in two studies corroborate the thesis that supportiveleadership behaviors are negatively associated with conflict over administrat-ive and product-service issues (Schul et al., 1983; Schul, 1987). Although itsrelationship to manifest conflict has not been specifically tested in distri-bution channels, based on the synthesis of the theoretical arguments positedabove and empirical investigation, the following proposition is proposed:

Proposition 2: Supportive leadership styles demonstrated by the channelleader will exhibit an inverse association with manifestconflict, as perceived by channel partners.

DIRECTIVE LEADERSHIP STYLE AND CHANNEL CONFLICT

As discussed, a directive leadership style is one in which the leader pro-vides specific direction to subordinate work activity. By performing the

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instrumental activities of planning, organizing, coordinating, and controllingchannel-related activities under the integrated leadership of one member ofthe distribution channel, inefficient allocation of tasks is reduced. The chan-nel leader, by assigning the distribution tasks to be performed, codifying therules, regulations, and guidelines to be followed, is able to reduce problemsstemming from channel activities because channel partners are formallymade aware of the parameters they must operate under.

However, it is also recognized that excessive formalization imposed bythe channel leader can increase conflict channel partners because of con-straints placed on their performance of distribution tasks. Although the accu-mulated empirical evidence suggests that, in general, formalization reducesconflict (Schul et al., 1983; Schul, 1987; Schul & Babakus, 1988), it has beenreported that under some circumstances excessive formalization leads to thenegative channel sentiments of conflict, opportunism, and dissatisfaction(Dwyer & Oh, 1987; John, 1984; Reve, 1986). Therefore, the relationshipbetween these variables is not straightforward, as previously believed.

According to Schul et al. (1983), however, channel partners whoperceive that their channel leaders are highly directive are more likely toappreciate, understand, and be more satisfied with their channel arrange-ments and will not be at odds with channel leaders. Furthermore, with for-malized rules and regulations, duplication of effort is reduced becausechannel partners know what is expected of them, which reduces the fre-quency of disagreements and future manifestations of conflict.

Based on the synthesis of previous empirical evidence, conceptualdialectic (English & Arnold, 1987) and theoretical arguments earlier, thefollowing proposition is advanced:

Proposition 3: Directive leadership styles demonstrated by the channelleader will exhibit an inverse association with manifestconflict, as perceived by channel partners.

Leadership Style–Manifest Conflict Linkage: The Moderating Role ofNational Culture

The model proposes that culture moderates the relationship between leader-ship style and conflict. That is, different leadership styles likely have differentmoderating influences on conflict depending on where the culture falls onHofstede’s cultural dimensions. Shown in Table 1 are proposed relationshipsamong the cultural dimensions of individualism, uncertainty avoidance,power distance, and masculinity and the participative, supportive, anddirective leadership styles. Drawing from the preceding discussion of theliterature, the relationships among the focal constructs are discussed in moredetail.



As noted previously, marketing channel relationships are influenced byculture (Nevins & Money, 2008; Lohtia et al., 2008; Skarmeas et al., 2008;Mehta et al., 2006). For example, in individualistic cultures, self-interest isparamount, and there is an emphasis on individual achievement. As a result,people strive to achieve an active role wherein their contributions will benoted and valued. However, channels of distribution are a web of inter-connected, interdependent entities that rely on each other. As such, thiscondition may attenuate channel member focus on individual achievement.Nonetheless, channel members also expect the rules for behavior and rewardfor achievement to be clearly stated in advance, so that they may map theirpath to individual advancement. This is more consistent with a directive lead-ership style. However, in collectivist cultures, people are more concernedwith group interests than with individual interests. Interdependence amonggroup members to assure the success of the whole is crucial. Therefore, trust-ing and personal relationships should be fostered via the use of participativeand supportive leadership styles.

In strong uncertainty avoidance cultures, people are threatened byuncertain situations, and there is a strong need for consensus. Thus, peoplefeel more comfortable with explicitly stated rules and regulations—consistentwith a directive leadership style. However, in weak uncertainty avoidancecultures, there is more acceptance of dissent and risk taking—hence, moreconsistent with supportive leadership that provides a trusting, friendlyenvironment for work and, perhaps to a lesser extent, a participatory leader-ship style that fosters involvement.

In large power distance cultures, more subordinate dependence andinequality are expected than in small power distance cultures. Consequently,in large power distance cultures, leaders dictate rules and regulations—apattern consistent with a directive leadership style. In small power distancecultures, inequality is minimized, and people are more interdependent—more consistent with a participative leadership style whereby everyone tendsto be involved in decision making and a supportive leadership style thatseeks to engender trust in the work environment.

Finally, in masculine cultures, performance and materialism are veryimportant. Thus, rules and rewards are expected to be clearly defined—consistent with a directive leadership style. In feminine cultures, quality oflife, involvement, and solidarity are very important—consistent with a parti-cipative leadership style that invites the involvement of everyone in anorganization and perhaps to a lesser extent, a supportive leadership style thatseeks to provide the foundation from which people may succeed.

Following the arguments posited earlier, in collectivistic, stronguncertainty avoidance, low power distance and feminine societies, the useof participative and supportive leadership styles would be most effective inreducing conflict. This is likely because participative and supportive leader-ship qualities emphasize equality (low power distance) and importance of

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relationships (feminine culture) and the use of both these leadership stylesmay be well suited for managing disagreements and impasses between chan-nel leaders and their international channel partners. Therefore, based on thepreceding discussion, the following research proposition is advanced:

Proposition 4: In collectivistic, weak uncertainty avoidance, small powerdistance and feminine oriented societies, participative andsupportive leadership styles would be more effective inreducing manifest conflict than a directive leadershipstyle.

Conversely, cultures that display individualistic, strong uncertaintyavoidance, large power distance, and masculine orientations would resultin a directive leadership style seemingly being appropriate in these typesof societies for attenuating conflict. This is because a directive leadershipstyle should assist channel members with guidance in realizing their materi-alistic and achievement needs, thus mitigating the frequency and intensity ofdisagreements and sources of tension between channel leaders and theirinternational channel partners. Thus, based on the foregoing arguments,the following research proposition is proposed:

Proposition 5: In individualistic, strong uncertainty avoidance, largepower distant, and masculine oriented societies, directiveleadership style would be more effective in reducingmanifest conflict than participative and supportiveleadership styles.

Manifest Conflict–Channel Partner Performance Linkage

Channel partner performance can be defined as the ‘‘degree to which thechannel partner engages in behavior that contributes to the fulfillment ofthe channel leader’s objectives’’ (Gaski & Nevin, 1985, p. 131). Because indi-vidual channel partners can significantly affect a firm’s success in the longrun, organizations are increasingly concerned about the performance of theirdistribution channel partners. There is general consensus in the channelsliterature that conflict has a significant, adverse effect on channel partner per-formance (Gaski, 1984; Lusch, 1978; Rosenbloom, 1973; Duarte & Davies,2003). The nature of that relationship, however, is not straightforward. Forexample, Rosenbloom (1973) developed a threshold model that combinesfunctional and dysfunctional effects of conflict on channel efficiency (per-formance). Conflict is dysfunctional to the extent that it culminates in tensionand frustration and reduces efficiency. Conflict is functional, though, when itstimulates interaction between channel partners to improve performance—but only to a point. After that point is reached, increasing conflict produces



inefficiency. In addition, conflict may have no effect on performance,because channel participants might become acclimated to the conflict tothe extent that efficiency is not affected.

Although the threshold model (Rosenbloom, 1973; Duarte & Davies,2003) is intuitively appealing, it has not met with widespread empirical sup-port. A plausible reason is that the relationship between conflict and per-formance depends to a large extent on the specific stage of conflict beinginvestigated and the measure of performance employed. Thus, varying oper-ationalizations, according to Brown (1980), may have obscured the associ-ation between these constructs. Moreover, a two-way iterative causalassociation between conflict-performance is possible. For instance, channelpartners who are not profitable may attribute their low performance to chan-nel leaders, thus engendering frequent confrontations and intensive dis-agreements on channel operations.

Schoenberg et al. (1995, p. 8) maintain that the potential for conflict incross-national partnerships may ‘‘well be inherent’’ and more acute than indomestic settings owing to cultural differences. This heightened level of con-flict has the capability of being keenly intense and can escalate to the point ofbeing dysfunctional, thus impairing the performance of the channel(Rosenbloom, 1973; Frazer et al., 1989; Duarte & Davies, 2003; Vaaland &Hakansson, 2003; Welch & Wilkinson, 2005). Consequently, manifest conflicton distribution channel performance should conceivably be invariant acrossnations or cultures. Hence, based on the evidence found from past studiesand the arguments articulated above, the following research proposition isposited:

Proposition 6: Irrespective of a society’s degree of individualism, uncer-tainty avoidance, power distance, and masculine=feminine orientation, manifest conflict will exhibit aninverse association with channel partner performance.

DISCUSSION AND IMPLICATIONS

This article explored the use of alternative channel leadership influencestrategies for managing manifest conflict among channel partners. To becompatible with the literature on cross-cultural management, which suggeststhat the use of a given leadership style is contingent upon the cultural context(Francesco & Gold, 1998; Hofstede & Bond, 1988; Kreitner, 2007; Rodrigues,1990), the article examined whether the relationship between leadershipstyle and manifest conflict among channel partners is moderated by nationalculture.

As noted earlier, interorganizational relationships today can be charac-terized as increasingly integrated and interdependent. Moreover, there is a

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call for a more collaborative or ‘‘partnership’’ approach to distribution chan-nel management. Additionally, some international scholars aver that culturesare converging and, thus, management practices can be transferred acrossinternational markets. With regard to leadership styles and internationalchannel management practices, however, the perspectives of this study areconsistent with those of other researchers who assert that cultures areseemingly resistant to change and that cultural differences require adaptationof management practices (Barkema & Vermeulen, 1997; Erez, 1986;Hofstede, 1980, 1991, 2001; Morris & Pavett, 1992; Newman & Nollen,1996; Welsh, Luthans, & Sommer, 1993). Thus, we propose that culturalvariations across nations may well require adaptation of channel leadershipstyles in different countries.

As pointed out earlier, in an individualistic and masculine-orientedsociety, channel partners are likely to emphasize their own self-interest, indi-vidual achievement, success, and power; major concern for other channelpartners and the entire channel’s success is not particularly paramount. Thesecharacteristics may well induce intense disagreements and goal-impedingbehavior—manifest conflict—particularly if discordance among channelpartners’ goals, policies, and programs exists. Under such conditions, direc-tive leadership style from the channel leader could clarify for channel part-ners what they need to do to be successful. Specifying these requirementsshould mitigate the impact of manifest conflict among channel partnersand, in the process, increase partner performance. Through delineation ofchannel functions, enhanced understanding among channel partners shouldresult in the alignment of partner objectives and values. Admittedly, support-ive and participative leadership could also have salutary effects on manifestconflict. If a society exhibits weak uncertainty avoidance, a comfortable,friendly, collaborative environment (participative leadership) may seeminglyafford channel partners opportunity to deal with extant or potential conflictthrough interpersonal, relational efforts. Such endeavors, though, may nothave as great an impact on assuaging conflict as those entailing strongcontrol over channel partners (directive leadership).

In collectivist societies, the focus generally is on group interests, groupdecision making, and group loyalty. There is the expectation of having thegroup determine what, how, and when a task is accomplished. Thus, indivi-duals in such a culture conceivably expect that group members (channelpartners in this case) work together. These characteristics are indicative ofa participative leadership style. Also, when a modicum of uncertainty avoid-ance is present, the society is somewhat uncomfortable in ambiguous situa-tions and, thus, likely experiences anxiety and stress; moreover, societalmembers may be insufferable toward behaviors or ideas that are not main-stream. These conditions conduce a need for consensus building. Participa-tive leadership would logically flow from the foregoing situation, thusdecreasing manifest conflict. Furthermore, if the society is also relatively



low in power distance, participation in decision making is likely encouraged,which is consistent with a participative leadership style. Moreover, support,caring and concern, friendliness, and respect are likely to emerge in suchinstances, which are redolent of supportive leadership styles. Moreover, cul-tures that score clearly on the feminine end place emphasis on equity andpeoples’ welfare—issues compatible with both participative and supportiveleadership styles. Given the preceding situation, the impact of participativeand supportive leadership vis-a-vis directive leadership on manifest conflictamong international channel partners is logical.

DIRECTIONS FOR FUTURE RESEARCH

Discussing one set of conditions—culture—under which leadership stylesmay vary vis-a-vis in their effectiveness in managing international channelpartner conflict represents a potential contribution to the area. However, thisarticle does offer several avenues that merit future research. First, subsequentwork should test the research propositions proffered here using samples indifferent industries and representing products and services in both industrialand consumer domains. Second, data collection procedures utilized shouldbe identical for all samples used; doing so will reduce the likelihood thatfindings are partly a function of variegated data collection techniques. Third,future research should address leadership style, conflict, and channel partnerperformance in a variety of cultures (e.g., Europe, Asia, Latin America)having wide dispersion in each of the four national culture variables. Finally,the current article examined only three variables—leadership styles, manifestconflict, and channel partner performance. Therefore, further research effortsshould consider incorporating additional variables that are germane to thevariables examined here, such as length of time as a channel partner, channelpartner firm size, and nature of products and=or services offered in thechannel.

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