Control, conflict and satisfaction in international channels: autos in a middle-eastern market

Abstract

This is a study of the relationship between foreign car-manufacturers and their respective agents in the "emerging" market of Saudi Arabia. The study takes the theories and findings about the relationship in advanced country domestic situations to see if they apply to a cross-country situation involving manufacturers from advanced countries and agents in a developing country. The study examines the extent of the manufacturer control over the dealer, the sources of that control and how each of these affect the level of conflict between the manufacturer and the dealer, and the dealer satisfaction, all from the dealer's perspective. Based on the literature, hypotheses were formulated and constructs developed using a questionnaire to which a relatively large sample of the dealers responded. Appropriate statistical tests of reliability and validity were conducted and thereafter simple Pearson correlations were calculated to test the hypotheses. Unlike in most advanced country studies, manufacturers were found to practice little control over their agents, nor was control found to be associated with the use of coercive and non-coercive measures by the manufacturers. But other facets of the relationship were found to be generally similar to other studies. Conflict was found to relate positively to the use of coercive measures by the manufacturer. Dealer satisfaction was found to relate positively to the use of non-coercive measures and negatively to the level of conflict and the use of coercive measures.