Business to business governance structure and marketing strategy

a r t i c l e i n f o Keywords: Channel governance structure Marketing strategy Business to business marketing This study tries to find an answer to the question: Are different marketing channel governance structural dimensions equally conducive for different marketing strategies? The results from an empirical study suggest that different dimensions of channel governance structure may not be equally conducive for different marketing strategies. Specifically, a high level of centralization in channel governance has no significant association with any of the marketing strategies; whereas a high level of formalization is positively associated only with a focus strategy. In comparison, participation is positively associated with both differentiation and price leadership strategies, but negatively associated with a focus strategy. Furthermore, a post hoc analysis was conducted to get more clarity of these relationships. A discussion of the findings along with their implications and limitations are also presented. While the importance of matching strategy and structure for the success of any organization is amply acknowledged in strategy literature (cf., most authors examine this relationship within an intra-organizational context. Some exceptions in-however, most authors take the stance that strategy influences channel governance. While, this directionality—i.e., first formulating a strategy and then designing and implementing an appropriate inter-organizational structure—may hold true for firms starting with no pre-existing channel network structure, this may be problematic for firms operating in or entering an ongoing marketing channel network with a pre-existing inter-organizational structure. While most authors acknowledge that a firm's relationship with others in the network influences implementation of marketing programs and strategy to the best of our knowledge no one has empirically investigated the relationship between existing channel governance structure and the strategic dimension of marketing—a blueprint of how a firm competes in the To that end, this study investigates the relationship between an existing marketing channel governance structure and the firm's marketing strategy (i.e., Porter, 1980). Specifically , this descriptive study empirically examines the relationships between existing channel governance mechanisms—centralization, for-malization, and participation—and different marketing strategies—cost leadership, differentiation, and focus strategies. The impetus for this study stems from the fact that firms often have to function and make the best of an existing channel network without the possibility of changing the channel network with every change in marketing strategy. Under these conditions, firms need to be cognizant of the unique characteristics of channel governance structure dimensions and how they may impact different marketing …