Utilizing Relational Governance in Export Relationships: Leveraging Learning and Improving Flexibility and Satisfaction

Exporting manufacturers that pursue international expansion via foreign distributors face a trade off. Their decision to utilize international distributors as a market entry mode reduces some risks; however, the manufacturers do not enjoy control of the foreign channel. Given heterogeneity in global environments and often a significant geopolitical separation between manufacturers and international distributors, the ability to control the behavior of channel partners is inherently reduced. Consequently, natural conditions for opportunistic behavior are created (Karunaratna & Johnson, 1997; Klein & Roth, 1990).