Norms- and Control-Based Governance of International Manufacturer-Distributor Relational Exchanges

Abstract

This study contributes to an understanding of plural forms of governance by integrating research on norms-based and control-based mechanisms in managing interorganizational relationships. The authors develop a model of structural antecedents and performance consequences of these two distinct governance forms. Based on data from 129 relationships between U.S. manufacturers and foreign-based independent distributors, the empirical results show a differential effect of relationship structures on the use of control-based and norms-based governance. Furthermore, the results show that these governance forms have distinct performance implications, and the nature of their influence on the effectiveness of the relationship varies by the environmental uncertainty in the foreign markets.