Communication flows in distribution channels: impact on assessments of communication quality and satisfaction.

We develop and test a model of the relationships between: (I) norms of information sharing and communication flows of frequency, bidirectionality, and formality; (2) these communication flows and dealers' assessments of the quality of communication and satisfaction with communication; and (3) formality of communication flows and dealers' distortion and withholding of information. Based on data collected with a survey mailed to a national sample of computer dealers, our findings offer insight on channels communication to both researchers and practitioners. By examining the impact of communication flows on summary judgments of communication, managers can focus their efforts on vital communication flows which stimulate positive assessments of communication, and which stymie less beneficial/detrimental communication behaviors (such as distortion and withholding of information).

Recent research on the management of channel relationships has increasingly focused on channel communication. Channel communication is central to effective channel functioning (Mohr and Nevin, 1990; Stern and El-Ansary, 1992). Communication behaviors between channel members have been linked to trust (Anderson and Weitz, 1989; Anderson and Narus, 1990; Bialaszewski and Giallourakis, 1985); power and influence strategies (Boyle, Dwyer, Robicheoux and Simpson, 1992; Frazier and Summers, 1984); channel structure (Brown, 1981; Etgar, 1976); coordination (Guiltinan, Rejab and Rodgers, 1980); channel member commitment (Anderson and Weitz, 1992; Morgan and Hunt, 1994); cooperation (Anderson and Narus, 1990); and resource allocation decisions (Anderson, Lodish and Weitz, 1987). Clearly, communication behaviors are an important factor in the development of channel relationships and assessments of relationship quality.

Researchers tend to take one of two approaches in conceptualizing and defining channel communication: either they focus on the flows of communication between channel members or they focus on evaluative/summary judgements regarding the communication exchange.(1) Researchers who have focused on the nature of communication flows typically examine aspects such as the frequency of interaction, the extent to which communication flows are bidirectional in nature, or the level of formality of communication flows. For example, Brown (1981) examined the number of communication interactions between channel members over a specified time period. Anderson et al. (1987) examined the extent to which both channel members were involved in the give-and-take of communication interactions (i.e., two-way feedback and participation). Anderson and Weitz (1989) measured the extent to which expectations were communicated in detail. Researchers who have focused on summary, evaluative judgments of communication examine the helpfulness (Guiltinan, Rejab, and Rodgers, 1980), adequacy (Bialaszewski and Giallourakis, 1985), or efficacy (Anderson and Narus, 1990) of communication. Rather than capturing the specific nature of communication flows, such summary judgments capture a more holistic assessment of the quality of communication interactions over time.

This prior research has examined only one aspect of communication, without acknowledging the potential for multi-dimensional aspects of communication flows. If communication is the "glue that holds together the channel of distribution" (Mohr and Nevin, 1990, p.36), it would seem important to include more than one measure of communication flows in channels research. Further, prior research does not acknowledge that the nature of communication flows may form the basis for a channel member's evaluative/summary judgments of communication. For example, the formality with which communication procedures are specified might impact the quality of information shared as well as a channel member's satisfaction with communication. Research which examines the impact of communication flows on evaluative/summary judgements of communication would be useful in better managing communication flows.

Enhanced understanding of channel communication can help focus managerial efforts on vital communication flows which stimulate positive assessments of communication behaviors, and which stymie less beneficial/detrimental communication behaviors, such as distortion or withholding of information. Furthermore, researchers may better understand which dimensions of communication are more appropriate than others for potential inclusion in their theories and research. Therefore, the purpose of this paper is to develop and test a model of communication flows between manufacturers and dealers. More specifically, we examine four issues: (1) how norms of information sharing influence the frequency, bidirectionality, and formality of communication flows; (2) how these communication flows affect dealers' assessments of the quality of communication; (3) the relationship between communication quality and dealers' satisfaction with communication; and (4) the relationship between formality of communication flows and the dealers' distortion and withholding of information. In the sections which follow, we first review the literature on communications in distribution channels. Prior to developing our hypotheses, we establish the theoretical underpinnings of our model. Next we test our model with EQS (Bentler, 1992), utilizing data collected from 125 computer dealers. Finally, we discuss our results and their implications.

THEORY AND RESEARCH ON CHANNEL COMMUNICATION

Organizations are oftentimes viewed in terms of their information flows and information processing capabilities (March and Simon, 1958; Tushman and Nadler, 1978). This view of organizations sees communication as a central phenomenon in organizations, and has contributed greatly to the understanding of how information flows and communication behaviors affect--and are affected by--the development and quality of inter-organizational relationships. According to Guetzkow (1965), communication is used to coordinate outputs; organizational hierarchies involve communication networks; and, communication serves to embed an organization in its environment. Guetzkow (1965) and others identify several important characteristics of communication in organizations, including formal vs. informal flows; vertical and lateral flows; omissions and distortions; communication quality and quantity (Wiio, 1988); and satisfaction with communication (Roberts and O'Reilly, 1974).

The communication flows in our model include the following. Frequency, or the amount of contact between channel members (Brown, 1981; Mohr and Nevin, 1990), reflects how often channel members have contact with each other. Bidirectionality refers to the extent to which each party gives feedback and input to the other (two-way flows) (Anderson et al., 1987). Formality is the extent to which communication flows are structured, planned, and routinized (vs. ad hoc or unstructured); such formality may be specified by the nature of the contractual relationship between the parties (Anderson et al., 1987; Mohr and Nevin, 1990).

Since frequency, formality, and bidirectionality are important aspects of communication flows (Mohr and Nevin, 1990), a key question becomes: what can channel members do to facilitate such communication flows? Based on organizational communications theory and relational contracting theory, a possible answer can be found by examining the norms of information sharing within the channel relationship. Norms are shared expectations for behavior; these shared expectations specify and guide appropriate conduct of the parties in a relationship (Heide and John, 1992). Relational contracting theory(2) addresses expectations regarding information sharing behavior. Interestingly, prior research has not examined the relationship between norms of information sharing (Heide and John, 1992; Noordewier, John and Nevin, 1990) and specific communication flows. If norms for information sharing specify and guide appropriate communication behaviors, it would seem important to assess their influence on communication flows.

We note three other points about prior research on channel communication. The majority of prior research on channel communication tends to focus on the positive or beneficial aspects of communication behaviors. However, the potential for more detrimental or negative communication flows exists. For instance, Stern and El-Ansary (1992) discuss the fact that channel members may withhold valuable information from each other or alter messages in such a way to protect themselves. Such "information control" (via selective disclosure, and so forth) is recognized as a source of power in organizations (Piercy, 1989). And, transactions costs analysis, in its treatment of efficient modes of governing exchange, addresses conditions of information impactedness(3) and opportunistic behavior. Opportunism, when one party acts with deceit or guile in its dealings with another, includes selective or distorted information disclosures (Williamson, 1975). Studies of opportunistic behavior (John, 1984) included measures of distortion and withholding of information. Hence, with holding and distortion of information (whether intentional or unintentional) are potentially important aspects of communication to assess (see also Guetzkow, 1965; Mohr, 1991). Based on Fulk and Mani (1986) and Stohl and Redding (1987), distortion and withholding of information is defined as occurring when the meaning of a message is transformed or modified (either intentionally or unintentionally) by the sender, or when one party does not transmit a message to the other.

Furthermore, studies of summary assessments of communication have been rather sparse, and their measures have been rather narrow (for example, perceived helpfulness, such as, Guiltinan et al., 1980). However, O'Reilly (1982) and Stohl and Redding (1987) suggest that assessments of the overall quality of communication are a function of the completeness, credibility, accuracy, timeliness, and adequacy of communication flows. We believe that holistic, summary assessments of communication could usefully incorporate these various aspects; we refer to this as communication quality. Finally, no research (of which we are aware) has addressed a channel member's satisfaction with communication. Given that satisfaction has been shown to be an important outcome in channels research (Dwyer, 1980; Wilkinson, 1979), we focus our assessment of satisfaction on the channel member's satisfaction with communication. Satisfaction with communication refers to the channel member's overall affect regarding communication with a focal manufacturer (compared to communication with other manufacturers).

MODEL DEVELOPMENT

The theoretical underpinnings of our model come from theories of organizational communication (Porter and Roberts, 1976; Roberts, O'Reilly, Bretton and Porter, 1973), transaction cost analysis (Williamson, 1975, 1979), and relational contracting theory (Macneil, 1981). By combining these theories, a more complete picture of communication and information flows in organizations is available for channels researchers. Figure, 1 provides an overview of the constructs in our hypothesized model.

[Figure 1 ILLUSTRATION …