The Impact of Outcome-Based Control for Retail Buyers on Organizational Performance

Abstract

This study addresses issues arising in the management of retail buyers. We consider the impact on supplier relationship management and organizational performance when retailers manage buyers based on an outcome-based control. To confirm the trends indicated in our proposed research model, this study conducts a survey of merchandising division heads at Japanese retail companies. The results from structural equation modeling analysis reveal that outcome-based control, through the central, mediating role of relationship continuity, encourages cooperation with suppliers, and this cooperation yields greater organizational performance for retailers. The findings raise questions as to the significance of forming a clan-like system when managing results-oriented buyers on an outcome basis.

Retail Buyer Control Systems: Implications of Buyer Behavior Strategies for Performance

“…Additionally, managers' expectations of buyers' price negotiations are relatively short-term and objective, so a result-oriented assessment such as sales and profit will become important, again making outcome-based control feasible (Kim and Takashima, 2014). In this case, we posit that managers will not motivate retail buyers using close communications and cooperation with store division managers (Takashima, 2004).…”

“…As Kim and Takashima (2014) pointed out, when the standards shaping buying activities and supplier relationships are stable, managers can transform knowledge based on merchandise samples and proposal documentation. Developing management information systems can help retailers gather, analyze, and share information and knowledge from different buying situations (Matsuo et al, 2013).…”

“…Retailers believe that such innovative buying behavior frees them from the fierce price competition that deteriorates profitability. This description provides a real example of a retailer's management control system in Japan, though some research examining the Japanese market has focused on the sales department (Matsuo, 2009) or supplier relationship management (Kim and Takashima, 2014). However, our proposed research model aims to address the gap in the research addressing actual practices.…”

“…Thus, while most studies tend to adopt the perspective of sales management across industries (Baldauf et al, 2005), this concept has been widely applied in different contexts, such as organizational buying (Anderson and Chambers, 1985) and inter-firm relationships between buyers and sellers (Ju et al, 2011). Surprisingly, despite the significant, diverse roles retail buyers play (Fiorito et al, 2010), very few studies have examined retail buyer management in terms of directional motivation (Keaveney, 1995), creative behaviors (Ganesan and Weitz, 1996), cooperative negotiation (Pullins, 2001), and relationship continuity with suppliers (Kim and Takashima, 2014). However, findings from these studies provide profound insights into the present study that seeks to develop a generalizable model of retail buyer control systems.…”

Os Efeitos Negativos Da Experiência E Do Controle No Desempenho Do Vendedor

“…O sistema de controle por comportamento é indicado para alcançar objetivos de longo prazo e avaliar medidas rotineiras de desempenho (Kim & Takashima, 2014), pois tem como foco intensificar a qualidade do relacionamento entre o vendedor e cliente (Crosno & Brown, 2014), aumentar a capacidade do vendedor para se adaptar às situações de vendas (Guenzi, Baldauf, & Panagopoulos, 2014) e incentivar a orientação para aprendizagem do vendedor (Rodrigues, Coelho, & Sousa, 2015).…”