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Conflict in Supplier–Retailer Relationships in theBrewery Industry in CameroonAltante Désirée Biboum a & Simon Pierre Sigué ba ESSEC of Douala , University of Douala , Douala , Cameroonb Faculty of Business , Athabasca University , Athabasca , CanadaPublished online: 23 Jul 2014.

To cite this article: Altante Désirée Biboum & Simon Pierre Sigué (2014) Conflict in Supplier–Retailer Relationships in theBrewery Industry in Cameroon, Journal of African Business, 15:2, 75-84, DOI: 10.1080/15228916.2014.925361

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Conflict in Supplier–Retailer Relationships in theBrewery Industry in Cameroon

Altante Desiree Biboum

ESSEC of Douala, University of Douala, Douala, Cameroon

Simon Pierre Sigue

Faculty of Business, Athabasca University, Athabasca, Canada

The authors develop a theoretical framework to explain conflict in supplier–retailerrelationships. In addition to traditional influence strategy variables, the framework linksconflict to retailer dependence and supplier formalization. The framework is empiricallytested in the Cameroonian brewery industry. The findings support the view that channelconflict is inversely related to retailer dependence and supplier formalization. Contraryto expectations, the use of noncoercive influence strategies (information exchange andrecommendations) has no significant effect on conflict, while, as expected, the use ofcoercive influence strategies (threats and promises) increases conflict.

Key words: Cameroon, channel conflict, dependence, formalization, influence strategies

INTRODUCTION

Channel conflict is a state of disagreement among chan-nel members. Conflict is not inherently positive or nega-tive (Gregorio, Cheong, & Kim, 2012). It is virtuallyembedded in every act of exchange—a seller would nor-mally like to buy at the lowest price, while the seller’sinterest is better served when the product is sold at thehighest possible price (Gaski, 1984). Also, typicalexchange relationships between suppliers and retailersgo beyond the act of buying and selling in a ‘‘take it orleave it’’ situation. Channel members usually interacton several other aspects (e.g., level of quality, servicesto consumers, promotional activities) of their businessrelationships to meet the expectations of all parties.Because of various opportunities for goal divergence,role deviance, personal incompatibility, and informationbreakdown that exist in such complex interactions,the development of a long-term productive channel

relationship without conflict and, of course, cooperationcannot be envisioned (Frazier, 1999). One of the chal-lenges for both marketing scholars and managers hasbeen to identify the antecedents of conflict in channelrelationships in order to reduce (maximize) its dysfunc-tional (functional) effects on channel performances.

Older channel research conducted until the early1990s has extensively investigated conflict. This researchfocuses on power, antecedents of influence strategies,and the effects of influence strategies on channel conflictand satisfaction (e.g., Brown, Lusch, & Muehling, 1983;Frazier, Gill, & Kale, 1989; Frazier & Rody, 1991;Frazier & Summers, 1984, 1986; Gaski, 1984, 1986;Kale, 1986). Influenced by the structure–conduct–outcome framework, this research, above all, considersconflict as a channel outcome that depends on theconduct of channel members, which in turn is a productof the structure of the relational exchange between part-ners. In a meta-analysis that covers this older researchand some early works based on the relationship market-ing paradigm, Geyskens, Steenkamp, and Kumar (1999)investigated, among other issues, the empirical general-ization of the relationships between some structure

Address correspondence to Simon Pierre Sigue, #301, 22 Sir

Winston Churchill Ave., St. Albert, AB, T8N 1B4, Canada. E-mail:

simons@athabascau.ca

Journal of African Business, 15(2), 75–84, 2014

Copyright # Taylor & Francis Group, LLC

ISSN: 1522-8916 print=1522-9076 online

DOI: 10.1080/15228916.2014.925361

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variables (centralization, dependence, and formaliza-tion) and influence strategies as well as the relationshipsbetween conduct variables (influence strategies) andconflict. The findings of this meta-analysis are ratherstartling. Only the use of threats has a significant directeffect on channel conflict. Structure variables such asdependence and formalization impact the use of pro-mises and noncoercive influence strategies but do notseem to indirectly impact conflict. Geyskens et al.’s(1999) work indicates that, although channel conflictwas extensively investigated in early research, reportedfindings for most relationships are too inconsistent toallow empirical generalizations (with the exception ofthe use of threats, which have a positive impact on con-flict). This situation contrasts with the observed margin-alization of conflict to the detriment of relationshipmarketing–based works in the recent channel literature(Frazier, 1999) and calls for additional research tofurther explore the antecedents of channel conflict.

The aims of this article are to expand the currentknowledge base and to contribute to a better under-standing of the determinants of channel conflict. Wedo this in two ways. First, we develop a theoreticalframework based on the marketing channel and intraor-ganizational literature that directly links conflict, on topof traditional influence strategies, to selected structureand conduct variables. Particularly, our framework pos-tulates that intrachannel conflict depends on the supplierdegree of formalization, retailer dependence on supplier,threats, promises, recommendations, and informationexchange. Our framework departs from the causalsequence of structure–conduct–outcomes to investigatethe direct effect of structural variables on conflict (e.g.,Gaski, 1984; Geyskens et al., 1999). Centralization,which is a common structure variable, is left out as itsuse in channels has recently been probed. For instance,Frazier (1999, p. 234) argued that ‘‘centralization, as aconstruct borrowed from an intraorganizational con-text, does not appear to apply very well in interfirm set-tings involving manufacturers and intermediaries.’’Particularly in conventional channels like the breweryindustry in Cameroon, suppliers and retailers are inde-pendent firms and decision-making processes can hardlybe centralized. On the other hand, as the use of forma-lization is widely accepted in channels, we draw fromthe intraorganizational literature to predict its directnegative effect on channel conflict (e.g., Dia, 1991;Gregorio et al., 2012; Henry, 1991). Finally, Payan,and McFarland (2005) reported a direct positive effectof dependence on compliance, another channel out-come. We contend that a reverse direct effect shouldbe expected on conflict.

Second, and finally, our framework is tested in theCameroonian brewery industry, which is characterizedby the existence of a small number of suppliers and a

myriad of small retailers. Previous research on channelconflict overlooks the African context. A related studyin supply chains by Winston, Dadzie, and Dadzie(2009) examined how managers handle conflict in colla-borative relationships in Ghana. This study, however,uses experimental data involving graduate studentsand does not investigate the antecedents of conflict.We make a conscious effort to contextualize our predic-tions to the African environment. Kozan, Wasti, andKuman (2006) and Sigue and Bonsu (2012) have calledfor additional cross-national and cross-cultural researchthat can deepen our understanding of channel issuesin emerging markets. Kale’s (1986) unusual finding ofa positive correlation between power and the use ofcoercion in India is an excellent reminder of the impor-tance of such studies. They are particularly valuable insituations where empirical generalizations are difficultto achieve, as in the case at hand.

The remainder of this article is organized as follows:We start with a description of the background and fol-low with the presentation of the theoretical frameworkand the development of hypotheses. We describe theresearch method and subsequently present our findings.We discuss the implications of this research andconclude in the last section.

BACKGROUND

The Cameroonian brewery industry, of which local baroperators (retailers) are a part, consists of three mainsuppliers and a myriad of small retailers. The marketis largely dominated by one of the suppliers, whichcontrols more than 75% and 85% of the beer and softdrink markets, respectively. All of the suppliers practiceintensive distribution and are barred from enteringinto exclusive dealings with retailers, who are permittedto carry the products of all suppliers. The suppliersalso work with a few wholesalers, who in turn deal withretailers. Our focus here is only on supplier–retailerinteractions. Suppliers advertise suggested retail pricesto retailers and make every effort to secure sufficient,high-quality shelf space for their products. Suppliersalso commonly offer merchandising, promotional, andlogistic support to retailers.

Opening and operating a bar represents one of thefew profitable activities that those who have little capitalcan afford. The unemployment rate in Cameroon isaround 30% and access to capital is extremely limited.As a result, the density of bars and other small retailersselling drinks is high. In some busy and popular areas,one may easily find a dozen such establishments inthe same location. Also, it is not unusual to meet streetvendors selling drinks in major cities. The sale of drinksand rebates are the main income sources of retailers who

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exclusively operate a typical bar. Some retailers, how-ever, combine drink selling with other related productsor services to better serve their customers and expandtheir sources of income.

Business relationships between brewers and retailersin Cameroon are characterized by repetitive interac-tions. Brewers supply retailers on a regular basis to copewith their inability to carry large supplies. The avail-ability of products at the points of purchase is criticalin major city markets where consumer loyalty to brandsis weakening as competition among suppliers intensifies.Brewers and retailers are interdependent and thereforehave to work together to meet the demands of their cus-tomers. Delivery dates, calculation and payment ofrebates, compliance with suggested retail prices, sortingand collection of empty bottles, and supply of promo-tional items and merchandising are a few areas wherethe two parties maintain continuous interactions. Theseareas are also sources of potential conflict between thetwo parties.

THEORETICAL FRAMEWORK

We consider conflict between brewers and retailers as achannel outcome, which depends on selected structureand conduct variables. Structure variables in this studyinclude formalization and dependence and refer to pat-terned and normalized aspects of relationships withina channel. Conduct variables refer to influence strategiesthat suppliers can adopt to shape relationships within achannel. The current research uses four such variables:threats, promises, information exchange, and recom-mendations. We briefly discuss each of the key compo-nents of our theory next.

Channel Conflict

In marketing channel contexts such as the one describedearlier, where there are considerable interactionsbetween members, conflict is an essential part of thedevelopment of a productive relationship (Frazier,1999; Gasky, 1984). Gasky (1984, p. 11) defined channelconflict as ‘‘the perception on the part of a channel mem-ber that its goal attainment is being impeded by another,with stress or tension the result.’’ This definition ofchannel conflict synthesizes Pondy’s (1967) processframework of conflict that distinguishes the followingfive stages of conflict: latent state of incompatibility,perceived conflict, felt or effective conflict, manifest con-flict, and conflict outcome or aftermath. The latent stageoffers the ground for the other subsequent stages of con-flict. It includes goal divergence, role deviance, inad-equate methods or styles of communication, and drivefor autonomy. For the purpose of this research, we

focus on manifest conflict, which, regardless of whatacts as the driver of the stress, tension, and frustration,comprises verbal or written expressions of disagree-ments among channel members (Brown et al., 1983).

Formalization

Formalization is defined as the extent to which decisionmaking in a channel is regulated by explicit rules andprocedures (John, 1984). In a formalized exchangerelationship, there is less ambiguity as roles, rules, andprocedures are well defined. Channel members knowwhat they can avoid or do to honor their mutual com-mitments or satisfy their expectations. Formalizedexchange relationships are, however, known to be lessflexible and can prevent partners from effectively andrapidly responding to changes (Gregorio et al., 2012).

Dependence

Dependence is commonly defined in the channel litera-ture as a target’s perception of the value it can obtainfrom a source compared with the value it can get fromalternative firms in achieving its goals (Frazier & Rody,1991; Payan & McFarland, 2005). We adopt the viewthat dependence is the target’s need to maintain itsrelationship with the source of power to achieve its goals(e.g., Geyskens et al., 1999), which are mainly sales andprofits in the context of the current study.

Influence Strategies

Influence strategies are patterns of behavior that a chan-nel member (source) adopts to request or encourage adesired behavior from other channel members (targets).Such strategies are used in channel dealings and help tocoordinate channel activities or address various issuesbetween channel partners. The use of an influence strat-egy does not guarantee that the desired behavioralchange will occur (Keith, Jackson, & Crosby, 1990).The target member’s response to or compliance withattempted influence strategies depends on several fac-tors, including the perceived relative dependence of theparties involved and the type and thoroughness of thecontent of the influence strategy used (Dwyer & Walker,1981; Payan & McFarland, 2005; Scheer & Stern, 1992).Influence strategies are classified as noncoercive andcoercive (Frazier & Summers, 1984).

Noncoercive influence approaches are used when achannel member attempts to achieve its goal by alteringa partner’s perceptions regarding the inherent desir-ability of the intended behavior. Coercive influenceapproaches come into play when a channel memberoverlooks a partner’s perceptions of the intendedbehavior and attempts to directly change the partner’s

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behavior. This research focuses on two noncoerciveinfluence strategies (information exchange and recom-mendations) and two coercive influence strategies(promises and threats).

Information exchange strategies occur when a firmengages in discussions on general business issues andoperating procedures in an effort to alter a partner’sgeneral perceptions of how the partner’s business mightbe most profitably operated (Frazier & Summers, 1984).The source’s personnel discuss broad operating philoso-phies with the target partner and do not explicitly orimplicitly suggest any specific course of action. How-ever, the logical expectation is that if the informationis processed properly, the partner will adopt theintended behavior, which will improve performanceand result in a mutually beneficial outcome for both par-ties. The ‘‘recommendation’’ strategy is reflected inattempts by a channel member to influence its partnersby promoting a mutually profitable outcome if the tar-get partners follow the source’s suggestions regardinga specific set of actions (Frazier & Summers, 1984). Thisapproach requires identification of specific behavior thatpartners need to adopt in order to achieve the desiredoutcome.

The use of threats is reflected in a situation where asource communicates to a target that it will apply nega-tive sanctions should the target fail to perform or behavein a desired way, while the promises strategy is usedwhen a source implies that it will provide the target withspecific rewards or benefits, contingent on the target’scompliance with the source’s desires. It is worthmentioning that in some studies, threats and promisesare combined into a single construct called coerciveinfluence strategy (Frazier & Rody, 1991; Frazier &Summers, 1986). Promises and threats are treated asseparate constructs in this study.

HYPOTHESES

Formalization and Conflict

The view that formalization, as bureaucratic govern-ance, has a negative impact on the quality of channelrelationships is pervasive (Geyskens et al., 1999). As for-malized channel dealings exhibit extensive use of rulesand procedures, they are believed to limit flexibilityand deprive those who are subjected to them ofself-control and autonomy (Dwyer & Oh, 1987; John,1984). It is argued that formalization alienates thereceiving party and engenders disaffection and less com-mitment to the relationship. This negative view of for-malization is, however, only empirically supported inpart. John (1984) reported a positive relationshipbetween the level of opportunism and formalization,

suggesting that members in a formalized channelrelationship are more likely to be involved in conflict.Dwyer and Oh (1987), on the other hand, report findingsthat support the alternative view that formalizationenhances the quality of channel relationships, asreflected in satisfaction, minimal opportunism, and hightrust of the exchange partner.

Building on the organizational literature, Gregorio et al.(2012) recently investigated the direct effect of formaliza-tion on both constructive and destructive conflicts withinadvertising agencies across the United States. Destructive(constructive) conflict is conceptualized as a state in whichdepartments and personnel disagree and feel negative (bet-ter) about their working relationship as a result of theirconflict dynamics. Gregorio et al. postulated that, giventhat formalization reduces role ambiguity and sets bound-aries that guide the relationships between various depart-ments in an advertising agency, it should reducedestructive conflict and increase positive conflict. Theyfound no significant relationship between formalizationand constructive conflict, while its effect on destructiveconflict was unexpectedly positive, indicating that a higherdegree of formalization increases destructive conflictwithin the advertising agencies studied.

Traditional African organizations are not regulatedby explicit rules and procedures. They are characterizedby centralized power structures, which allow paternal-istic managers to become involved in all decisions anddevelop direct relationships with employees (Dia,1991). Decisions are dictated by circumstances or impro-vised, leaving employees feeling powerless and prevent-ing them from taking initiatives (Dia). Conversely,Henry (1991) provided an example of a ‘‘modern’’ Afri-can company that has codified all its processes in a man-ual that is now used to guide daily activities anddecision-making processes. The company experienceda significant increase in job participation and satisfac-tion, quality of relationships between management andemployees, and overall efficiency.

We contend that the lack of formalization may be one ofthe causes of the poor performance of traditional Africanorganizations that is deplored by Dia (1991). Therefore, ifHenry’s (1991) reported experience is replicated in otherAfrican organizations and even in marketing channel con-texts, the outcome might be similar. Major brewers inCameroon are subsidiaries of multinational companies,which are not expected to practice traditional African man-agement style (Jackson, Amaeshi, & Yavuz, 2008). Thebrewers’ quest for efficiency should normally lead to theimplementation of simplified business procedures thatmutually benefit all the parties involved, including retailers,who are a key component of their marketing channels.

H1: A greater degree of supplier formalizationreduces channel conflict with retailers.

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Dependence on Conflict

Early channel research has mainly focused on therelationship between dependence and the use of influ-ence strategies (e.g., Frazier & Rody, 1991; Frazier &Summers, 1986; Kale, 1986), assuming that the influencestrategies, in turn, impact conflict (Geyskens et al.,1999). Some argue that a dependent target makes it easyfor the source to use coercive influence strategies and toact opportunistically to the detriment of the target(Kale, 1986). Others take the view that the source caneasily obtain the compliance of a dependent target withnoncoercive influence strategies that foster cooperationand high-quality relationships, leaving coercive strate-gies as the last resort (Frazier & Rody, 1991; Frazier& Summers, 1986).

A key premise of the dependence theory is thatdependent channel members readily comply with therequests of their partners or are prompt to search foraccommodations (Dilts, 1998; Keith et al., 1990; Kozan,Wasti, & Kuman, 2006). As a matter of fact, Payan andMcFarland (2005) have found a direct positive relation-ship between dependence and compliance.

We therefore maintain that there exists a directrelationship between dependence and conflict. Becausea dependent channel member is more tolerant ofdemands made by a powerful partner, conflict shouldbe less common between powerful brewers and smallretailers, who rely heavily on supplied drinks for the sur-vival of their businesses.

H2: Retailer dependence reduces conflict withsuppliers.

Influence Strategies on Conflict

Coercive influence strategies are used when a channelmember overlooks a partner’s perceptions of theintended behavior and attempts to directly change thepartner’s behavior by offering rewards (promises) orpunishments (threats). The use of coercion or pressuringa partner to act in a certain way against its own will gen-erate tensions and frustrations and result in disagree-ments and conflict (Frazier & Rody, 1991; Frazier &Summers, 1984; Scheer & Stern, 1992).

H3: Supplier use of coercive influence strategies—(a) threat and (b) promises—increases channelconflict with retailers.

On the other hand, indirect influence strategiesreinforce the target’s sense of autonomy and intrinsicmotivation, enhance cooperation between partners,and create a good working atmosphere within channels(Frazier & Summers, 1984, 1986). They also contribute

to strengthening mutually beneficial relationshipsbetween exchange partners (Boyle, Dwyer, Robicheaux,& Simpson, 1992). As a result, conflict should normallydecrease when indirect influence strategies are used(Geyskens et al., 1999).

H4: Supplier use of noncoercive influence strate-gies—(a) information exchange and (b)recommendation—reduces channel conflict withretailers.

METHOD

Data Collection

A questionnaire was used to collect data for this study.This questionnaire consisted mainly of Likert (or sum-mative) scales, designed to measure the concepts ofinterest: conflict, threats, promises, informationexchange, recommendations, dependence, and formali-zation. To develop this questionnaire, face-to-faceinterviews with bar operators and suppliers’ contact per-sonnel were conducted to identify the relevant aspects oftheir business relationships and their expectations ofeach other. The information collected from interviewsformed a knowledge base that was then combined withthe existing channel literature to obtain our measure-ment instruments (see the appendix).

The resulting questionnaire was distributed to a sam-ple of 400 bar operators in Douala and Yaounde (twomajor cities in Cameroon) to gather information abouttheir relationship with their primary suppliers. Anadditional 217 bar operators were contacted but theydeclined up front to participate in the study. Con-venience sampling was used, but every effort was madeto cover the different areas of the two cities by selectingdifferent itineraries and avoiding contact with closedbars. An initial screening was performed to make surethat respondents had active dealings with suppliers dur-ing the preceding 6 months. Questionnaires werehand-delivered to each establishment. The questionnairepackage included a letter that outlined the goals of theresearch and, more importantly, pledged detachmentfrom the suppliers. A pick-up day was jointly arrangedwith each respondent; the typical pick-up date was 2days after drop-off. A total of 222 completed and par-tially completed questionnaires were collected, repre-senting a 55.55% response rate from those who hadagreed to participate. Considering those who declined,the actual response rate was 35.98%. Excluding ques-tionnaires with missing data, the analysis for this studywas based on a usable total of 196 observations.

The original questionnaire for this study was pre-pared and administered in French. Note that although

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we borrowed from Boyle et al. (1992), Brown et al.(1983), Dwyer and Oh (1987), Kale (1986), and Scheerand Stern (1992), these measures were adapted forrelevance to Cameroonian bar operators and coveredall critical aspects of their business relationships withtheir primary suppliers. Prestudy interviews helped toachieve this goal. Moreover, the original draft of thequestionnaire was provided to two local marketing pro-fessors as well as to a small sample of bar operators andsuppliers’ contact personnel for their feedback. As aresult, some items in the original draft were changedand others were added or deleted.

Measures

Conflict

After exploratory interviews with retailers, thefollowing six areas were identified as potential sourcesof conflict between brewers and retailers: days of deliv-ery, calculation and payment of rebates, sorting andcollection of empty bottles, availability of all the pri-mary supplier’s products, and compliance with sug-gested retail prices. Retailers were asked to indicatethe frequency with which they discussed their disagree-ments on each of these topics within the last 12 monthson a 5-point Likert scale, ranging from ‘‘never’’ to ‘‘veryoften’’ (e.g., Brown et al., 1983).

Formalization

A three-item scale was developed to measure forma-lization. Statements on the use of set rules, the existenceof standardized processes in the relationship, and theclarity of responsibilities between brewers and retailerswere provided (Dwyer & Oh, 1987; John, 1984).

Dependence

A single-item scale measurement of dependence wasused. Retailers were asked to indicate their degree ofagreement with a statement referring to the capacity oftheir establishment to continue making profits withoutthe products of their main supplier. While multiple-item scales of dependence do exist in the literature(e.g., Brown et al., 1983; Payan & McFarland, 2005),exploratory interviews convinced us to use this simpleand direct measurement to overcome the challenge ofvarying levels of business knowledge among retailers.

Influence Strategies

A seven-item scale and a five-item scale weredeveloped to measure the use of threats and promises(direct influence strategies), respectively. Five-itemscales were used to measure both information exchange

and recommendations (indirect influence strategies).Statements were provided and the respondents had toindicate their degree of agreement.

Except for the conflict scale, respondents had to indi-cate in all cases their degree of agreement with eachstatement on 5-point Likert scales, with choices rangingfrom 1¼ ‘‘strongly disagree’’ through 3¼ ‘‘no opinion’’to 5¼ ‘‘strongly agree.’’

Psychometric Qualities of the Measures

We first performed a factor analysis using principal axisfactoring and a Varimax rotation on the entire set ofitems of the six independent variables used in this study.The objective was to verify that these measures, includ-ing threats, promises, information exchange, recommen-dations, formalization, and dependence, were clearlydelineated and that each item was associated with theproper construct (e.g., Payan & McFarland, 2005). Thisanalysis resulted in a seven-factor structure. The singleitem of dependence and all items of threats, promises,information exchange, and formalization were stronglyassociated with a single factor. The items of recommen-dations were divided into two dimensions. The firstdimension of recommendations has a single item relatedto limiting inventory shortage, while the second dimen-sion consists of the other four items: advice on servingcool drinks, keeping the bar clean, setting low prices,and presenting products well. On the basis of the con-ceptual definitions of recommendations (e.g., Frazier& Rody, 1991; Frazier & Summers, 1984; Geyskens &Steenkamp, 2000), we summed the two dimensions ofrecommendations to form a single recommendationsscale.

We estimated scale reliability using Cronbach’s coef-ficient a (Nunnally, 1978). The results are displayed inTable 1. The magnitude of the reliability coefficients goesfrom 0.66 (formalization) to 0.86 (promises). Althoughour aggregate recommendations and three-item formali-zation scales offer the lowest reliability levels, these levelsare still satisfactory.

We also checked for multicollinearity amongindependent variables of the main model (Model 1) by

TABLE 1

Reliability Analysis

No. of Items Cronbach’s a

Conflict 6 .78

Threats 7 .79

Promises 5 .86

Information exchange 5 .78

Recommendations 5 .70

Formalization 3 .66

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computing relevant statistics: Pearson correlations(Table 2), tolerance value, variance inflator factor(VIF), and condition index (Table 3). The correlationsbetween independent variables are relatively low andoffer some interesting insights that will be discussedlater. While it is still moderate, the correlation betweenthreats and promises is the highest. This finding isexpected. High correlations between these two influencestrategies have led authors to combine them into a singleconstruct called coercive influence in some previouswork (e.g., Frazier & Rody, 1991; Frazier & Summers,1986). On the other hand, observe that the VIF values(threshold of 10.0), tolerance values (threshold of0.10), and the condition indices (threshold of 30) of allthe variables are low, high, and low, respectively. Obvi-ously, multicollinearity does not appear to put the stab-ility of our regression estimates at risk.

ANALYSIS

To test our four hypotheses, we specify the followingmodel of conflict

Conflict ¼ aþ b1X1 þ b2X2 þ b3X3 þ b4X4 þ b5X5

þ b6X6 þ e

This model captures the individual effects of each ofthe six independent variables. We estimate an ordinary

least squares regression analysis to assess the main impactof the different independent variables on conflict. Theresults of the regressionmodel are summarized in Table 4.

The model above explains 15.5% of the variation inconflict (F¼ 6.789, p< 0.001). The results obtained sup-port H1, H2, and H3 but not H4. Supplier formalizationhas a negative impact on conflict (b¼�.115, p< 0.10), asdoes retailer dependence (b¼�.214, p< 0.01). Supplieruse of threats and promises both have a positive impacton conflict (b¼ .146, p< 0.10 and b¼ 0.221, p< .05).Information exchange has an unexpected negative sign,while recommendations have the expected positive sign,but these effects are both insignificant (p> 0.10), soour H4 prediction that the use of noncoercive influencestrategies reduces conflict is not supported.

DISCUSSION AND CONCLUSION

This study complements previous work on the antece-dents of channel conflict viewed as a channel outcome.In addition to the effect of traditional conduct variables(influence strategies), we argue that structure variablessuch as formalization and dependence, which havemainly been traditionally linked to influence strategiesas their antecedents, have a direct effect on channel con-flict. In particular, because roles, rules, and procedures

TABLE 2

Pearson Correlations

X1 X2 X3 X4 X5 X6

X1¼Threats 1

X2¼Promises 0.594� 1

X3¼ Information exchange 0.304� 0.417� 1

X4¼Recommendations 0.168�� 0.237� 0.458� 1

X5¼Formalization �0.023 �0.006 0.132 0.208� 1

X6¼Dependence �0.035 �0.15 0.109 0.135�� �0.007 1

�p< 0.01, ��p< 0.05.

TABLE 3

Tolerance, VIF, and Condition Index

Conflict

Tolerance VIF Condition Index

X1¼Threat 0.67 1.49 6.05

X2¼Promise 0.60 1.66 8.55

X3¼ Information exchange 0.67 1.49 9.82

X4¼Recommendation 0.74 1.34 11.32

X5¼Formalization 0.89 1.11 12.43

X6¼Dependence 0.98 1.01 19.43

Note. VIF¼ variance inflator factor.

TABLE 4

Multiple Regression Results

Expected Effect

Conflict

Standardized b

Threats þ 0.146���

Promises þ 0.221��

Information exchange � �0.046

Recommendations � 0.097

Formalization � �0.115���

Dependence � �0.214�

Adjusted R2 0.155

F 6.789�

Observations 184

�p< 0.01, ��p< 0.05, ���p< 0.10.

SUPPLIER–RETAILER RELATIONSHIPS IN CAMEROON BREWERY INDUSTRY 81

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are well defined in a formalized channel and membersknow the expectations, we postulate that formalizationshould lead to less intrachannel conflict. Also, buildingon the belief that dependent channel members easilycomply with the requests of their partners or are promptto search for accommodations, we predict that conflictshould be reduced when retailer dependence increases.Relationships between conflict and coercive influencestrategies (threats and promises) and noncoerciveinfluence strategies (recommendations and informationexchange) are also examined.

In support of our predictions, we find that the twostructural variables do indeed have a negative impacton conflict, meaning that conflict is reduced when rela-tionships between channel members are formalizedand retailers are heavily dependent on suppliers. Theuse of coercive influence strategies (threats and pro-mises) increases conflict. Contrary to our expectations,the use of noncoercive influence strategies (informationexchange and recommendations) does not have asignificant effect on conflict.

The findings of this research contribute to the currentchannel literature in three major ways. First, the nega-tive effect of formalization on channel conflict contrastswith the notion that formalization alienates the receivingparty and engenders disaffection, opportunistic beha-vior, and less commitment to the relationship (John,1984) and supports the alternative view that formaliza-tion enhances the quality of channel relationships(Dwyer & Oh, 1987). As Dwyer and Oh further specu-late, the positive impact of formalization on the qualityof channel relationships can be explained by the factthat formalization provides a check on the capriciousmobilization of power by suppliers. Although this isnot an explicit hypothesis in our research, correlationsbetween influence strategies and formalization revealthat formalization is not significantly associated witheither of the two coercive influence strategies. On theother hand, it is positively correlated to the use ofrecommendations, which suggests that when there is lessrole ambiguity and conduct is guided or constrained byan accepted set of rules and procedures, situations wheredirect influence strategies are used may be limited. Giventhat exchange relationships within and between tra-ditional African organizations are generally less forma-lized, our findings suggest that these organizations aremore likely to experience conflict. African marketingchannels could therefore improve their performance byfurther formalizing relationship exchanges betweenmembers to reduce dysfunctional conflict (Dia, 1991).

Second, the direct negative effect of retailer depen-dence on channel conflict found in this research is con-sistent with the recent theory that dependenceincreases compliance (Payan & McFarland, 2005). Link-ing to older works, we further check the correlations

between dependence and influence strategies. We findthat dependence is not significantly correlated to anycoercive influence strategies; instead, it is positively cor-related to recommendations. Thus, contrary to Kale(1986), who argued that powerful sources take advan-tage of dependent targets and use coercive influencestrategies to their detriment (this theory would havepredicted a negative impact of dependence on conflict),our findings go well with those that support the viewthat powerful sources do not need coercion to achievecompliance (e.g., Frazier & Rody, 1991; Frazier &Summers, 1986). Our preliminary interviews with sup-pliers’ contact personnel are consistent with this view.As a matter of fact, many of those interviewed empha-size the necessity of maintaining good working rela-tionships with retailers that they consider keypartners for their success, an aspect that seems to bedeeply rooted in the African way of doing business(Chinomona, Lin, Wang, & Cheng, 2010; Epie, 2002;Sigue & Bonsu, 2012).

Finally, our findings only partially support thetheory on the impact of influence strategies on conflict.As expected, threats and promises increase conflict,while recommendations and information exchange donot significantly impact conflict. Except for the positiveeffect of promises on conflict, our findings are similarto those in Geyskens et al.’s (1999) meta-analysis.The lack of significant relationship between conflictand information exchange and recommendations maynot be as surprising as it appears. As Sigue and Bonsu(2012) argued, the majority of exchanges between sup-pliers and retailers are normal or routine business deal-ings that require the use of some sort of noncoerciveinfluence strategies and do not necessarily prevent orgenerate conflict. Conversely, the positive effect of theuse of threats on conflict is a consistent result thatshould be taken into account by any manager, asthreats are generally used when there is a disagreementbetween parties. The use of threats should be con-sidered a failure of the source to genially persuadethe target that its desired action serves their mutualgoals. This principle seems universal and stereotypes,such as the aggressive use of power being culturally tol-erated or accepted in Africa, can be misleading (Henry,1991; Sigue & Bonsu, 2012).

This research is far from perfect. The following aretwo major limitations. We use a convenience sample ofretailers in the two major cities of the country, whereall the suppliers are very active and competition isintense. The findings reported might be different in someremote areas where only the leader has a direct presence.Our model explains only 15.5% of the variation in con-flict, meaning that some other exogenous factors affectconflict between suppliers and their retailers moresignificantly than those examined here.

82 A. D. BIBOUM AND S. P. SIGUE

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ACKNOWLEDGMENTS

The authors would like to thank Drs. Mihail Cocosila, Kofi Dadzie,

and Leopold Lessassy for their very helpful comments on the early

drafts of this manuscript and Mr. Vince Ambrock for providing copy-

editing support. This manuscript also benefitted from the comments of

the participants at the Athabasca University Research Forum.

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APPENDIX: MEASURES

Conflict

– Day of delivery– Calculation and payment of rebates– Sorting and collection of empty bottles– Availability of all the primary supplier’s (PS’s)

products– Negligence and misuse of the PS’s items– Compliance with suggested retail prices

Threat

– The PS could not deliver to those who do notarrange the racks well at the time of deliveries.

– The PS could no longer provide discounts to thosewho do not respect its instructions.

– The PS could no longer deliver products to thosewho have delayed their payments on creditsgranted.

– The PS will give fewer or no promotional articles tothose who do not respect its instructions.

– The PS will withdraw its refrigeration material fromthose who do not respect conventions of use.

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– The PS will penalize those who do not respect thesuggested retail prices.

– The PS will remove certain privileges from those whodo not grant enough shelf space to its products.

Promises

– The PS will give preferential treatment to those whoarrange the racks well at the time of deliveries.

– The PS will conduct more promotional events in thebars of those who respect its instructions.

– The PS will increase the credit limit of those whopay their credits on time.

– The PS will give more promotional items to thosewho respect its instructions.

– The PS will provide preferential treatment to thosewho respect its conventions. regarding the use ofits refrigerators.

Information Exchange

– Representatives of the PS discuss with you theproduct quantities you should order to avoidinventory shortage.

– Representatives of the PS discuss with you actionsto undertake for serving your customers well.

– Representatives of the PS often remind you how toreplace defective drinks and ways to exchangethem.

– Representatives of PS often inform you about thebest practices to sell more product.

– Representatives of the PS often inform you on timeregarding promotional activities.

Recommendations

– The PS often advises you to serve well-cooleddrinks.

– The PS does not advise you to avoid inventoryshortages.

– The PS advises you to keep your bar clean andpresentable.

– The PS often advises you to keep your prices low tosell more and obtain better rebates.

– The PS often advises you to better present theproducts on shelves to sell more.

Formalization

– To sell the products of your PS and benefit from itslogistic support, you must abide by many set rules.

– There exist standardized processes in your collabor-ation with your PS.

– Your responsibilities are clearly defined in yourexchanges with the PS.

Dependence

– My business cannot continue to make profitswithout the products of the PS.

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