Manifest conflict, customer orientation and performance outcomes in international buyer-seller relationships

Abstract

Purpose The purpose of this paper is to test the impact of manifest conflict on performance outcomes. In particular, this paper aims to examine the moderating effect of the supplier’s customer orientation (CO) as perceived by the buyer on the conflict-performance outcomes relationships in international channel relationships. Design/methodology/approach A survey of 162 Australian importers was conducted to elucidate the associations among manifest conflict, CO and performance outcomes. Findings Manifest conflict was found to be negatively related to the importer’s evaluation of the exporter’s overall performance, which is consistent with previous work. However, CO was found to moderate the negative direct effect of manifest conflict on two outcome measures, “satisfaction with business outcomes” and the “evaluation of the exporter’s overall performance”. Moreover, it actually changed the effect from dysfunctional to functional for “evaluation of the exporter’s overall performance”. That is, CO changes the nature of the manifest conflict–outcome relationship by turning it from negative to positive. Research limitations/implications This research helps answer the appeal for research on the conditions in which conflict causes dysfunctional and functional outcomes. From a practical standpoint, providing the importer views the exporter as being customer-oriented, conflict should not be avoided if it stems from disagreements that arise due to the exporter acting in the best interests of the importer. The power of CO in affecting the functionality of outcomes resulting from conflict should be highlighted. Originality/value Conflict is a fact of life in channel relationships, but little is known about its functional and dysfunctional effects (Frazier, 1999; Skarmeas, 2006). The empirical evidence largely points to conflict being dysfunctional; however, research also indicates that context can play an important role in moderating the functionality of conflict. In this paper the authors ask: what role does CO play as a determinant of the functionality of manifest conflict in channel relationships? They argue that the exporter’s CO changes the context in which the importer and the exporter interact and, thereby, changes the way in which the importer interprets the supplier’s actions.