Vertical Control and Performance: The Role of Power, Relational Norms and Transaction Cost Analysis in Distribution Channels

Abstract

Marketeers have argued that organisations are concerned with vertical control along the marketing channel to avoid competition and to improve perfOrmance by rationalising costs arising from both production and market search. The general proposal offered by this study is that within the transaction cost framework, the existence of relational norms between the trading parties :facilitates control over business operations. This vertical control, in tum, enhances performance of the dyad.