Purpose
This study aims to examine the double-edged effects of guanxi on opportunism and the moderating effects of legal enforceability and partner asset specificity. It thus differs from the current literature, which primarily focuses on the benevolent effects of guanxi.
Design/methodology/approach
Based on matched data collected from 268 sales manager and salesperson dyads, this study tested hypotheses using hierarchical regressions.
Findings
The empirical test supports the conceptual model and demonstrates two findings. First, guanxi between boundary spanners follows an inverted U-shaped relationship with inter-firm opportunism. Second, both the benefits and drawbacks of guanxi are stronger under the condition of low legal enforceability and high partner asset specificity.
Research limitations/implications
The study did not untangle guanxi into different dimensions and did not investigate how firms should make trade-offs between the benefits and drawbacks of guanxi. Therefore, future research could further explore this question by using a multidimensional approach.
Practical implications
The study alerts managers that guanxi is a double-edged sword, so they should complement it with formal control mechanisms, particularly when they are operating in legally inefficient regions or when their partner firm’s asset specificity is high.
Originality/value
The study offers a more balanced view of guanxi by showing both its positive and negative effects on opportunism. It also uncovers legal enforceability and partner asset specificity as two boundary conditions that influence the curvilinear effects of guanxi on opportunism.
The store-within-a-store (SWS) arrangement is one of the most important channel structures. Taking the perspective of manufacturers, this paper extends the literature by examining the role of manufacturers’ prediction accuracy, moderated by demand uncertainty and inventory-related parameters, in determining the adoption of the SWS strategy. This study constructs a theoretical model to investigate manufacturers’ decision based on the uncertainty model. The result shows that, first, as a manufacturer’s demand forecast accuracy increases, it would be more likely to choose the SWS mode, and demand uncertainty and inventory-related parameters further strengthen this effect. Second, if the manufacturer and retailer can reach an agreement on a proper percentage of the revenues that the manufacturer pays to the retailer, the SWS mode would be a better choice for both of them. This research provides new insights for the adoption of the SWS strategy.
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