Opportunism in Distribution Networks: The Role of Network Embeddedness and Dependence
Article first published online: 29 MAY 2014
© 2014 Production and Operations Management Society
Production and Operations Management
How to Cite
Opportunism in Distribution Networks: The Role of Network Embeddedness and Dependence. Production and Operations Management (2014), doi 10.1111/poms.12247, , , .
- Article first published online: 29 MAY 2014
- Accepted manuscript online: 7 MAY 2014 02:13AM EST
- Manuscript Accepted: FEB 2014
- Manuscript Received: SEP 2013
- National Natural Science Foundation of China. Grant Numbers: 71372129, 71272123, 70972017
- Research Grants Council of Hong Kong. Grant Number: 9041954
- network effect;
- multi-methodological research
Prior research documents the value of network relationships to firm behavior but is relatively silent on how networks influence opportunism in distribution channels. Focusing on a common type of distribution networks in which multiple distributors serve a single, dominant supplier, this study moves beyond a dyadic view to examine how a focal distributor's relational and structural embeddedness in such a distribution network influences its opportunism toward the dominant supplier. In particular, we postulate that a distributor's relational embeddedness in the network curbs its opportunism, whereas its network centrality, as a form of structural embeddedness in the network, promotes its opportunism. Moreover, we propose that relational embeddedness magnifies the role of a focal distributor's dependence on the supplier in suppressing the distributor's opportunism, whereas network centrality buffers such a role. We first empirically test these hypotheses using data collected from car dealers in China; the results provide support for the hypotheses. We then develop an analytical model to validate and further explain the underlying mechanisms of the network effects. Our analytical results not only validate the empirical results but also provide guidance for managers on controlling opportunism in distribution networks.