Patterns of channel relationship management in China

This study explores relational exchanges between foreign invested enterprises (FIEs) and local third party distributors in China. Thirty-six interviews combining with 4 case studies were undertaken. Different relationship patterns between the relational constructs of intra-channel conflict, power, channel relationship and performance from those in Western countries have been identified. Channel relationship is positively related to distributor's performance. Formalized business relationships tend to have a positive effect on performance, and over-reliance on interpersonal relationships can impede channel effectiveness. Negative coercion (i.e., threats) negatively effects channel relationships and results in worse channel performance, while the use of non-threatening coercive power sources (i.e., Promise and Legalistic Pleas) contributes to channel performance. Implications for researchers and practitioners have been discussed.