The role of control systems in partner selection/evaluation processes in established distribution channels

Abstract

Purpose – The purpose of this paper is to investigate the partner selection/evaluation processes in established distribution channels (DCs) and the role played by control systems (CS) over major changes in the internal complexity and the external uncertainty of the distribution network. Design/methodology/approach – The research is based on a longitudinal case study of a manufacturing firm and its outsourced DC. Findings – Over time, the manufacturer's market-focused strategy provoked the adoption through CS of more objective and formal selection processes. It was very clear in this case that while the growth of internal complexity indeed required changes towards formalisation, only the rapidly increasing environmental uncertainty in the 1990s required significantly more elaborate CS to evaluate partners. Research limitations/implications – Original longitudinal case – limitations typical for such design of study, e.g. not possible to expand the findings out of company type and historical periods. Practical implications – The process of selecting partners, because it is ongoing, requires a formal and active involvement from CS; no CS are indefinitely stable but must be developed whenever significant internal or environmental changes occur. The changes to counter internal complexity seem less elaborate than the changes required by external uncertainty. Originality/value – Original longitudinal case illustrates the screening and signalling mechanisms used by both parties to provide information to each other in three different internal complexity/environmental uncertainty scenarios.