The Effect of Output Controls, Process Controls, and Flexibility on Export Channel Performance

Abstract

The authors examine international distribution channels in terms of the coordination processes that govern the relationship between export manufacturers and their foreign-based distributors. Although this relationship is mediated by market prices, manufacturers can enhance performance by relying on certain nonmarket forms of governance—control and flexibility—to manage their overseas channel better. The authors develop a model that examines both the contextual antecedents and the performance consequences of these nonmarket governance forms. One form of controls—output control—along with flexibility, is shown to enhance export channel performance, but another control form—process control—has no performance effect.