Towards a governance approach to determinants of reseller management success

Abstract

Purpose In mature global business-to-business (B2B) product markets, management of external sales channels, governed by contractual relationships, is a key determinant of business performance. However, existing sales channel management literature lacks focus on contractual governance and reseller management success. The purpose of the study is to systematically review different governance theories in relation to sales channel management and to show which factors are the most influential in making or keeping external sales channels effective. Design/methodology/approach A case study on a large B2B information and communication technology (ICT) company is used to reflect on the way the different theoretical governance perspectives explain sales channel management success. Interviews and mini-questionnaires were used to collect data. Findings Expressions of interdependence and equality alongside persevered personal relationships are important in managing daily business activities and in avoiding bad will at the reseller’s grass-root level. Future-oriented planning, long-term-oriented support and jointly set incentive systems are important for reseller management. Degree of professional management sets resellers apart through shifts in power balance. Research limitations/implications A multi-theory governance perspective offers a holistic view over reseller management and provides a comprehensive view over different sales channel management issues and their relative importance. Practical implications The findings highlight the importance of long-term orientation and cooperation in setting up a reseller management system to gain and nurture distributors’ trust and commitment towards the manufacturer. Originality/value The study is the first to comprehensively use governance perspective in studying reseller management.