Impact of power on channel members’ behavior: evidence from India

Power is an important construct in retailing and channel literature. Power is studied in improving the performance of the firm, but less emphasis is given on the behavioral changes that lead to an improvement in performance. The purpose of this paper is to focus on the relationship between sources of power and channel members’ trust, affective commitment, agent dependence and environmental munificence individually. Also, the paper examines the interrelationship among coercive, expert, referent, legitimate and reward sources of power.

The study uses a structured questionnaire to collect data from 214 channel members from an Indian oil company. The study uses a covariance-based structural equation modeling (SEM) approach for establishing the interrelationship among sources of power. Also, the study uses partial least squares SEM approach for determining the relationship between power sources and channel members’ behavior.

The study establishes that the dichotomous nature of power, i.e. coercive and non-coercive power source exists independently in an emerging country context. Further, coercive power sources are negatively and non-coercive power sources are positively associated with trust. Also, coercive and reward power sources are positively associated with agent dependence, whereas expert, referent and legitimate power sources are positively related to affective commitment. Finally, referent power is found to be positively associated with environmental munificence.

The paper offers several managerial implications. For practitioners, the paper highlights that application of coercive and non-coercive power sources can bring the desired change in channel members’ behavior. Also, acknowledging the power position between channel leader and channel member can foster more efficient association.

The paper contributes to the literature on channel management by enhancing the understanding of sources of power and their influence on the behavior of channel members. First, the study examines the relationship between channel members’ behavior of trust, affective commitment, agent dependence and environmental munificence and five sources of power. Second, the study establishes the interrelationship among sources of power. Finally, the paper outlines the implications for managers for effective use of sources of power in channel management.