An Assessment of the Impact of Distribution Channel Conflict on Channel Efficiency – Few Improvised Conceptual Models

Abstract

The primary purpose of this study is to enhance the understanding of the impact of distribution channel conflicts on the channel efficiency, which has hitherto received little attention in distribution channel literature. Although ‘channel conflict’ as a construct is fairly well researched and its relationship with channel efficiency is explored to some extent, yet the moderating effect of the conflict resolution strategies on the channel efficiency is largely absent in the channel literature. From a behavioral science perspective, the article models the channel conflict-efficiency relationship, for three different types of conflict resolution methods-problem solving, bargaining and politics, in the context of asymmetric power relationships. The managerial implications of these conceptual models lie in making organizations (channel captains), dealing with their channel partners, foresee the possible impacts of their adopted conflict resolution strategies, on their channel efficiency and accordingly maximize returns on the channel investments.

Conflicts are inevitable whether their results are functional or dysfunctional. From the organizational perspective, Katz (1964) has provided 3 bases of conflicts-between different subsystems of the organizations and between units of similar functions –both of these sources deal with horizontal power equations. The third base of conflict is based on the hierarchy and arises between different groups over the sharing of rewards and status. (quoted in Hall, H. Richard, “Organizations Structures, Processes, and Outcomes, 8th Ed.,2002).The nature of conflict and their sources may be varied and may arise from perceived or real divergence of interests (Morgan, 1986).