When channel conflict positively affect performance: evidence from ICT supplier-reseller relationship

This paper aims to study the positive impact of functional conflict and conflict management in improving supplier–reseller relationship performance in multi-channel setting (reseller together with supplier’s sales reps). The authors develop four hypotheses, including direct and mediated effects, about conflict management, conflict and the impact on channel performance.

The authors’ sample of suppliers in the information and communication technology (ICT) industry in Brazil consists of an interesting setting of multi-channel distribution, as suppliers deal with sales reps in combination with reseller channels to offer products to customers. The sample is representative of the industry, including more than 60 per cent of the ICT suppliers. The model was tested with partial least squares in the context of ICT industry in Brazil.

The empirical test shows that although an increase in functional conflict improves channel performance (direct effect), an excessive increase may amplify the dysfunctional conflict, thereby damaging channel performance (indirect effect). The negative interplay between the two natures of conflicts is counterbalanced with conflict management. Results show that conflict management improves channel performance by decreasing the harmful effects of dysfunctional conflict. This paper contributes to the theory by deepening our understanding of conflict, a critical challenge underlying supplier–reseller relationships in marketing channels. For managers, this research clarifies the importance of considering and managing conflict of different nature in the context of multi-marketing channels.

The contribution of the authors’ study is twofold. First, they develop an integrative mediating model with key constructs of multi-channels’ conflict and channel performance. They incorporate the causal relationships between functional and dysfunctional conflict, conflict management and channel performance into a single conceptual framework. This integrative mediating model to the best of their knowledge has not been developed before. Second, they provide managers with a broad understanding of conflict management implications to supplier’s multi-channel strategy, and how functional conflict can actually be beneficial for channel performance.