Volume 14 Number 3

International Channels of Distribution:A Classification System for

Analyzing Research StudiesPrescott C. Ensign, University of Ottawa __

ABSTRACT: This paper presents a systematic method for classifyingresearch on international channels of distribution, it is used to examine 79articles published during an 18-year period (1988-2005). Based on contentanalysis, each article is classified by its primary research framework. Twoframeworks are identified: (1) structural - based on the economic andorganizational aspects of international channels of distribution; and (2)behavioral - based on the exchange relationship between channel membersfrom different national environments. This simple organizing system offers acomprehensive way to analyze scholarship that has emerged in the field. Formanagers, it can bring the theoretical and practical developments togetherin an understandable fashion as they seek to interpret and apply researchfindings. For scholars, it may bring focus to an increasingly complex area ofinternational business and guide future research efforts.

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the most highly differentiated aspects international setting, generalizations (/)of international marketing. Marketing about international channels of —channel decisions involve supply distribution can be deceptive duechain strategy at the policy level to the extent of countiy-to-country ^and channel management at the differences (Stern and El-Ansary ^operations level. The complexity of 1992). The literature on domesticthese decisions is increased by widely channel practices does not provide - gdifferent social, cultural, economic, sufficient answers for the conduct of ^and political patterns. While analysis activities across borders (Seifert and ^ofdomestic channels and the concepts Ford 1989).

<T)Prescott C. Ensign is an Assistant Professor in the Telfer School of Management at the ^University of Ottawa, Ontario, Canada. His research interests include intemationalizationof high-growth firms, firm eiitr}' strategies in emerging markets, and collaboration acrossphysical, cultural, social, organizational, and technological distance.E-mail: ensign@telfer.uottavva.ca

Acknowledgements: The author owes an intellectual debt to Professor John K. Ryans. Jr.and appreciates his guidance and encouragement. Thanks are also due to David A. Griffithfor helpful discussions and comments. Support as a Fulbright Scholar from the Foundationfor Educational E.xchange between Canada and the US, Institute of International Education,and J. M. Smucker Company is gratefully recognized. This work has benefited by fundingreceived trom the Social Sciences and Humanities Research Council of Canada.

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Given the strategic significanceand complexity of distributionchannels in international business,it is worthwhile to scrutinize priorscholarship in this important area.In an effort to consolidate ourunderstanding and to move theresearch agenda forward, this paperconsiders:

What issues have receivedattention (which ones should)?

• What approaches and methodsare used?

• Is there a wholistic way tounderstand and categorizeresearch efforts?What lessons and insights canbe shared with practitioners?

Based on a review ofthe literature,a gap has been identitled: thereis no single classification systemfor understanding research efforts.Proposed is a comprehensive systemfor sorting research on internationalchannels of distribution. Thishierarchical taxonomy is employedto analyze 79 academic articlespublished during an 18-year period(1988-2005). Prior studies havegenerated a wealth of knowledge. Inthis paper, accumulated research issynthesized and it is hoped that thisclassification system will provide abasis for future research efforts andassist marketing managers as theyseek to interpret and apply scholarlyfindings.

Analysis of Existing ResearchA survey of recent literature

(1988-2005) was undertaken to

identify studies on internationalchannels of distribution. An initialsearch was made using severalelectronic databases (e.g.. BusinessSource Premier and ProQuest)..Tournais related to internationalmarketing, international business,marketing, and marketing researchwere also reviewed in an attemptto make the search as completeas possible. The final selectionof articles was based on contentanalysis. An article was selected ifit focused on some aspect relevant tothe development and/or maintenanceof interorganizational channels ofinternational distribution. Atotal of 79articles were selected for inclusion inthe present study. Although no claimis made that this was an exhaustivesearch, it provides evidence to supportthe view suggested by some scholarsthat there are a limited number ofstudies on international channels ofdistribution (Cabaniss 1991; Griffithand Ryans 1995; Rosson and Ford1980; Samiee 1993; Seifert and Ford1989). Though an increase in theformation of channel partnerships inthe 1990s has been indicated (Buzzelland Ortmeyer 1995), the level ofscholarship on the subject has notkept pace. Compare this attentionwith that given in the internationalbusiness literature to joint venturesand alliances - something in whichfar fewer finns engage, but hundredsof articles are published.

Each article was first classifiedby primary research framework. Tworesearch frameworks are used in thisstudy. These two general approachesare derived from a dichotomy arising

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in the literature; chiefly the economic,physical, technical 'hard' side versusthe social, psychological, 'soft' side.Drawing from Stem and colleagues(1969, 1980, and 1992) these areconceptualized as:

(1) structural framework - basedon the economic and organizationalaspects of international channels ofdistribution; or(2) behavioral framework - based onthe exchange relationship betweenchannel members from differentnational environments.

An integrative understanding putforth in this paper builds on the viewespoused by Stern and El-Ansary(1992: 38) - "the marketing channelis a complex technical and behavioralsystem." It also is complementaryto Stern and Reve's (1980: 52)"analysis of distribution channelswhich encompasses both economicand sociopolitical determinants ofchannel member behavior." Thedichotomy proposed in this paperis essentially a return to Stern's(1969) book Distribution Channels:Behavioral Dimensions that affirmsthese frameworks.

Articles classified into the tworesearch frameworks are furtherdivided by approach taken. Thosewith a structural framework are furtherclassified by: (1) developmental/evolutionary approach, (2) transactioncost approach, or (3) comparativeapproach. Those with a behavioralframework are further classified by:(1) relational approach; (2) cross-cultural approach; or (3) prescriptive

approach. These approaches reflectthe specific goals of the individualstudies. The approaches wereculled from the literature prior toclassification of the articles. Whiletaken as discrete categories, there canbe a degree of overlap in approaches.That is an article may include elementsthat examine relational activity(relationship between manufacturerand intermediary) as well as cross-cultural. Several articles purposefullycross boundaries. It is evident that afew of the early as well as the mostrecent research eflbrts fall into morethan one domain.

Two independent coders - oneunrelated to this paper (not the author)- both familiar with the literaturewere used to place articles accordingto structural framework and particularapproach. Intercoder reliabilitywas high - with few discrepanciesin interpretation resolved carefully.Several articles were excluded incases where agreement could notbe reached. Distinctive or notableresearch methods employed arediscussed for the structural approachas well as the behavioral approach.The 79 articles reviewed and classifiedare presented in Table 1.

STRUCTURAL FRAMEWORKResearch classified as having

a structural framework focuses onspecific aspects of channel designrelated to economic structure- the transactional form existingin the channel - and/or theorganizational structure - the typeand number of institutions in thechannel (Leonidou 1989: 17). The

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TABLE 1: A CLASSIFICATION

STRUCTURAL FRAMEWORK

Developmental Approach

Bello, Urban, and Verhage 1991Bello, Verhage, and Bronislaw 1989Chen and Huang 2004Chu 1989Gadde1993Griffith, Chandra, and Fealey 2005Griffith and Ryans 1995Howard and Maskulka 1988Mazzoleni 1996Ramaseshan and Patton 1994Seifert and Ford 1989Terpstra and Yu 1990

Transaction Cost Approach

Aulakh and Kotabe 1997Bello and Lohtia 1995Bergen, Heide, and Dutta 1998Erramilliand Rao 1993Harvey and Novicevic 2002Kinn 2001Kinn and Daniels 1991Kim, Nugent, and Yhee 1997Klein 1991Klein, Frazier, and Roth 1990Klein and Roth 1990, 1993McNaughton 2002Myers and Harvey 2001Osborne 1996Rialp, Axinn, and Thach 2002Shin, Hahn, and Park 1996

Comparative Approach

Assn:ius and Wiese 1995Cavusgil and Zou 1994Ekeledo and Sivakumar 1998Kim and Oh 2002McNaughton and Bell 2000Myers 1999Rosenbloom and Larsen 1991Shoham, Rose, and Kropp 1997, 1999

SYSTEM FOR ANALYZING RESEARCH STUDIES

BEHAVIORAL FRAMEWORK

Relationai Approach

Balabanis 1998, 2005Bello and Gilliland 1997Bello, Chelariu, and Zhang 2003Cavusgil, Deligonul, and Zhang 2004Frazier. Gill, and Kale 1989Karunaratna and Johnson 1996Katsikeas and Piercy 1991Kim 2003Leonidou 1989Liu and Wang 1999Moore 1991, 1992Paswan and Young 1999Rose and Shoham 2004Welch and Wilkinson 2005

Cross-Cultural Approach

Bandyopadhyay. Robicheau, and Hill 1994Borin, Van Vranken, and Farris 1991Geyskens, Steenkamp, Scheer, and Kumar 1996Johnson. Sakano, Cote, and Onzo 1993Johnson, Sakano, and Onzo 1990Kale and Mclntyre 1991Lianes and Melgar 1993Marshall 2003Mehta, Larsen, Rosenbloom, Mazur, and Polsa 2001Mehta, Larsen, Rosenbloom, and Ganitsky 2006Rosenbloom and Larsen 2003Yavas1998Yoon, Morash, Cooper, and Clinton 1996

Prescriptive Approach

Cavusgil and Kirpalani 1993Fram1992Grunert, Jeppesen, Jespersen, Sonne, Hansen,Tronsen, and Young 2005Keitt1990Mehta, Larsen, and Rosenbloom 1996Michael 1998Rosenbloom 1990Shipley, Cook, and Barnett 1989Thomas and Wilkinson 2005Weigand 1989,1991Zhang, Cavusgil, and Roath 2003

common emphasis is on the issueof distribution choice (alternativechannel structure) and efficiencyaspects (cost) of the distributionchannel. In addition to the effects ofbehavioral processes on internationalchannels, economic/competitive,sociocultural, technological, andlegal/political factors influence

distribution (Rosenbloom 1999: 526).While channel design and selectionprovide a common framework forstructuralist authors, they differon what should be considered inevaluating and choosing alternativechannel intermediaries as well as onthe issue of vertical integration. In thesecond level of this hierarchy three

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approaches are identified to describethese differences: developmental/evolutionary approach, transactioncost approach, and comparativeapproach.

Developmental/EvolutionaryApproach

Like other socioeconomicphenomenon, international channelsof distribution change over time.Some scholars focus on the stagesof a firm's internationalization andits channel management. Thisimplies that the structure and type ofinternational channels of distributionfollow a pattern as a firm moves fromusing intermediaries to functionalabsorption to direct exporting (Terpstraand Yu 1990). Others consider thisto be an incremental process ratherthan discrete stages that developover time (Howard and Maskulka1988). Griffith and Ryans (1995)note that global marketing channelscan evolve naturally, pointing outthat transaction cost concerns hasbeen dramatic - often overshadowingother concerns. They posit that thepreoccupation with transaction costshas been detrimental for both practiceand scholarship. For the practitionercharged with responsibility formanaging marketing channels, he orshe should be cognizant ofthe naturalprogression.

Bello and Verhage (1989), Chenand Huang (2004), and Howard andMaskulka ( 1988) take a developmentalapproach to describe the way firmsenter international markets and howthis develops over time. Bello andVerhage (1989) combine export

stage and transaction cost analysis toexamine the structural changes thatoccur as firms move through variousphases. Firms that manufactureindustrial products, however, do notnecessarily undergo all steps of theinternationalization process (Bello,Urban, and Verhage 1991). Chu(1989) describes this as a process oflearning-by-doing, which can leadto vertical integration of distributionactivities. A developmental approachis also evident in the work of Seifertand Ford (1989). They surveyindustrial firms to determine thechoice of foreign-based (direct) ordomestic-based (indirect) distributionchannels and level of satisfactionwith the distribution channel chosen.Again, the administrator overseeinginternational distribution channelsshould be aware that there may be nosingle correct trajectory; experienceand learning play an important role.The notion of equifinality suggeststhat there may be an array of decisions/choices that lead to the same result.

Chen and Huang (2004) examineTaiwanese small and medium-sizedenterprises as they cultivate globalmarketing activities: setting up,establishing, developing, and buildingare all descriptors used in theiranalysis. These firms overcomebarriers as they progress throughstages of internationalization or elsedefy the typical sequence and beginas global enterprises ('bom global').In a rebuttal to the driving force ofinternational strategy - transactioncost efficiencies - Griffith, Chandra,and Fealey (2005) explore 'natural'channels of distribution; those that

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have evolved. They report on 22 in-depth interviews of global marketingmanagers in the emerging marketof India and isolate various factors(internal and external) that afFect thecourse of channel development.

Gadde (1993) sees distributionnetworks as evolutionary-developingthrough time as a result ofthe actionsof network participants and theirefforts to exert control. The conceptsof coordination and mobilization areused "in an analysis of evolution indistribution networks" (Gadde 1993:43). In a historical study, Mazzonleni(1998: 420) found that "a networkof manufacturer-overseas distributorrelationships evolved over time aspervasive asymmetric informationproblems were resolved." He alsofound evidence that social normscould be used to combat agencyconcerns. This suggests that channelrelationships require work but thatmaturation and resolution cannotbe forced. Interaction among actorsis important, even time plays a rolein healing relationships, assuagingcontentions, and ironing out thornyissues.

Transaction Cost ApproachThe transaction cost approach

- based on the work of Coase (1937)and Williamson (1979, 1981) -provides a coherent frameworkfor investigating determinants ofvertical integration. This approach- a combination of organizationaltheory, economics, and moderncontract law - is an explanationfor why managers select differentchannel structures to coordinate the

exchange (Dwyer and Oh 1988).The transaction cost approachsuggests that cost minimization canjustify these structural decisions.Manufacturing firms internalizetransactions (integrate forward) toreduce costs (Klein and Roth 1993).A firm's optimal channel structureshould reflect both the volume ofsales involved and the vulnerability ofthe firm to opportunistic behaviors byexternal intermediaries (Klein 1991;Klein, Frazier, and Roth 1990; Kleinand Roth 1990, 1993).

Rialp, Axinn, and Thach (2002)examine the channel integrationdecision of over 2,000 Spanishfirms engaged in exporting. Theyfind strong evidence of internalizingoperations. Their research alsodelves into various "institutionalarrangements for accomplishinginternational distribution" (Rialp,Axinn, and Thach 2002: 134).Studying small knowledge-intensivefirms, McNaughton (2002) findsthat multiple distribution channelsare often chosen to serve foreignmarkets and that integrated modesare often preferred for internationalchannels as they facilitate protectionof intellectual assets and providehigh levels of customer service andsupport. McNaughton (2002: 190)develops and tests a "transaction costanalysis model of channel choice."

Transaction costs are contingenton the firm's unique circumstances.Empirical work by Bergen, Heide,and Dutta (1998), Kim and Daniels(1991), Klein, Frazier, and Roth(1990), and Harvey and Novicec(2002) suggest that a product's

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transaction-specific assets are a keyfactor in explaining the selection of agiven integrated channel. Klein andRoth (1990) provide an expiorator>'paradigm based on transaction costanalysis to examine the effect thatexperience and psychic-distancehave on determining the selection ofan export channel structure. Kleinand Roth (1993) also relate lowertransaction costs to satisfaction withchannels. Klein and Roth (1990)support the view that when marketsoperate efficiently, opportunisticexpectations will be bargained away.For the marketing manager, everysituation has its own particularconditions; analysis and calculationmay be relied upon, though not at theexpense of or in the absence of otherconsiderations.

Comparative ApproachThe comparative approach to

the study of international marketingchannels involves identifying,classifying, measur ing , andinterpreting the commonalities anddifferences in structures and patternsof distribution between nations(Boddewyn 1981). In terms of overallperspective, structuralists maintainthat a standardized global marketingstrategy does not apply to distributionstrategy in foreign markets. InRosenbloom and Larsen's (1991)view, a common global strategy doesnot provide marketing managerswith enough knowledge and insightabout multi-domestic channels ofdistribution. A customized, adaptive,and situational view is needed toprovide for differences across

national environments. Cavusgiiand Zou (1994: 5) evaluate channelsof distribution and export strategy ingeneral along the "standardization-adaptation continuum" and find thatthey are a function of: internal forces- consisting of characteristics ofthefirm and product; and external forces- consisting of characteristics oftheindustry and market. Myers (1999)draws attention to the fact that parallelchannels of distribution or graymarkets are a growing phenomenon.While the calculus may not be asclear for evaluating transactions,such attention is no less important incomparing and controlling modes ofexchange.

Kim and Oh (2002) surveyinternational distributors in the USand Japan and find the influence ofinstitutional factors vary accordingto channel context. McNaughtonand Bell (2000) explore channelswitching by small knowledge-intensive firms. They weavetransaction cost considerations withan evolutionary approach: "thedomestics channel is frequentlyextended into a foreign market togain economies ... managers need tobe aware of the momentum createdby domestic channels" (McNaughtonand Bell 2000: 24).

Although the present interestin global supply chain managementhighlights the importance of thefunction, many elements of themarketing mix are not suited to asingle, global marketing strategy.The research work of structuralists -especially those using a comparativeanalysis approach - suggests that

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distribution strategies must bedeveloped for the specific situationin each national market. Sincestructuralists - and especially thosethat take a comparative approach -tend to focus on foreign market entry,there is always the possibility of anoveremphasis on channel differencesamong nations.

Structuralist FrameworkResearch Methods

In reviewing the methods usedin research having a structuralframework, some general observationscan be made. One study (Terpstra andYu 1990) is based on anecdotal casestudies. Most of the 38 structuraliststudies in Table 1 are large-sampleempirical investigations use dataobtained in survey questionnairesto test hypotheses. Howard andMaskulka (1988) survey exportmanagement companies to determinetheir desire to participate in anexport trading company. Studiesby: Bello, Urban, and Verhage(1991); Bello and Verhage (1989);Klein, Frazier, and Roth (1990);and Klein and Roth (1993) - weredesigned to test hypotheses relatedto channel structure selection andsatisfaction. The methods in thesestudies were similar. A representativesample of manufacturers andchannel intermediaries was selected;a questionnaire - with responsespresented on a Likert-type scale- was used to measure perceptionsand preferences.

From a m e t h o d o l o g i c a lstandpoint, the study by Kim andDaniels (1991) employs a somewhat

different research design. Theirstudy examines marketing channeldecisions. The sample included bothforeign manufacturing subsidiariesand domestic firms in the US market.By selecting foreign and domesticfirms operating in the same market,the sample includes both quasi controland experimental groups. The size ofthe sample was also large enough totest national and multinational globalstandardization strategies. In general,this research design provides betterinformation on channel selectionthan that which can be obtained fromresearch on a single group.

Shin, Hahn, and Park (1996)test hypotheses based on predictionsfrom game theory. They evaluatemarket dynamics using: competitionintensity, product substitutability,market predictability, and numberof competitors. In a thorough studyof the factors predicting channelintegration, Aulakh and Kotabe ( 1997)utilize an eclectic approach. Work byEkeledo and Sivakumar (1998) andErraniilli and Rao (1993) are notableas the focus is service firms - largelyan ignored area. The research ofKim, Nugent, and Yhee (1997) andOsborne (1996) contributes to theliterature on small- to medium-sizedfirms. Interest in smaller, younger,more entrepreneurial internationalfirms seems to be generating increasedattention (e.g, Chen and Huang 2004,McNaughton 2002, McNaughton andBell 2000, Rialp, Axinn, and Thach2002). A glance through the list ofauthors in Table 1 reveals that quite afew scholars have a growing body ofwork in this field. Their devotion to

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the topic points to an ongoing researchdesign that systematically addressesa number of issues often frommultiple perspectives (institutionalvs. interpersonal; in-depth interviewsvs. large sample survey).

BEHAVIORAL FRAMEWORKResearch classified as having

a behavioral framework focuseson the interaction between channelmembers and how that exchange isaffected by interpersonal dynamicsand environmental factors and intra-channel operating practices. Inthis research the emphasis is onthe relationship between differentchannel levels that are interdependentin nature and embedded in the act ofexchange. The primary focus is onthe channel member relationship - thedynamics of interpersonal behavioras filtered by cultural differences.As Seifert and Ford (1989: 15) state,"the positive or negative interactionsin such a relationship can result frompersonality, experience, and ethnicor cultural phenomena." This isin contrast to research classified ashaving a structural framework thathas as its primary focus the conceptssuch as cost analysis, channel design,or channel integration.

Studies classified as having abehavioral framework generally relyon the measurement of perceptualphenomena and the development ofpractitioner-based constructs. Theyaddress the complex nature of theunderlying behavioral dimensionsinfluencing the domestic manufacturerand foreign intermediary relationship.The focus is on the management of

ongoing dyadic channel relationshipsrather than on the structure of thechannel (Klein, Frazier, and Roth1990). The emphasis is typically onthe interpersonal experiences of thechannel member that are likely toshape the channel relationship. Theserelationships are based on familiarityand trust that result from repeatedbusiness and social interactions aswell as on personal conflicts thatresult from personality or culturaldifferences (Ford 1980). Gaski(1984) notes that power and conflictplay a prominent role in channels ofdistribution. Frazier (1999:226-227)indicates that "intrachannel conflictand its impact on long-term channelrelationships is often confused. ...Power remains a misunderstoodconstruct in channels-of-distributionresearch. Confusion still existsamong the power, communication,and control constructs in both aconceptual and operational sense."Table 2 provides a strong guideor useful basis for the marketingmanager to handle channel partners.

Once channels have beenestablished there is no guarantee thatthey will operate successfully. Realistic,cost-effective implementation, andfirst-rate execution depend on afirm's management techniques andmechanisms (Stern and El-Ansarj'1992:267). Most behavioral research,regardless of approach, examinesinterpersonal attributes (often on afunctional/dysfiinctional continuum)that are characteristic of specificchannel relationships to determine,for example, how a higher degreeof interorganizational coordination

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can be achieved within a particularchannel relationship. "Shifts inthe balance of channel power" and"changing strategic priorities" haveresulted in channels becoming"dynamic webs" (Anderson, Day, andRangan 1997: 59). Table 2 lists theattributes used to measure, describe,or predict specific behavior. The listis derived from factors identified inthe 41 behavioral framework articlesanalyzed in this study.

The behavioral attributes recordedin Table 2 emphasize that channelrelationships are extremely complex.Although behavioralists share acommon overarching framework,they take different approaches asthey try to isolate the role playedby personality, experience, culture,and ethnicity. From the behavioralbranch in the ta.\onomy the secondlevel in the hierarchy divides researchunder this framework into threetypes: relational approach, cross-cultural approach, and prescriptiveapproach.

Relational ApproachResearch classified as taking a

relational approach focuses on thesatisfaction with the relationshiprather than on cultural factorsin the relationship or aspects ofstructural change implementedby manufacturers (Moore 1991).In general, interactions betweenmanufacturer and intermediary areunderstood to be a multidimensionalphenomenon along a heterogeneoustransaction continuum. Those whostudy the long-term development ofthese relationships are classified as

taking a relational approach within abehavioral framework (Anderson andNarus 1990; Balabanis 2005; Dw>'er,Schurr, and Oh 1987; Ganesan 1993,1994; Rose and Shoham 2004).Research that examines this as adiscrete or transaction-specificphenomenon takes a transaction costapproach within the structuralistframework (Heide and John 1988,1990, 1992).

The primary purpose of researchthat takes a relational approach isto look at the interaction constructs(e.g., dependence, reciprocal action,goal congruence, etc.) in distributionchannel relat ionships. Suchresearch considers that both channelmembers are actively involved inthe international trading equation.The emphasis is on the behavioralcomplexities of their workingrelationship and how these affect theiroperating performance (Leonidou1989). Based on the current interestin relationship marketing, it is evidentthat the management of relationshipsis becoming a major paradigm inmarketing channels research andpractice (Heide 1994; Long 2003;Morgan and Hunt 1994).

In contrast to interorganizationalrelationships. Rose and Shoham (2004:942) find that between manufacturersand their international channels ofdistribution (an interorganizationalrelationship), task or functionalconflict does not build the relationshipbut reduces "the quality of strategyemployed, reducing performance."Kim (2003) studies interdependenceof channel members and distributors.His work also contributes to the

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literature by examining industrialproducts (rather than consumergoods) and does so via a multi-country study ofthe US and Japan.

Moore (1991) examinesrelationship states betweenmanufacturers (Great Britain)and overseas intermediaries

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(West Germany). This study isquite different from those thatexamine the dimensions of time- the length, duration, or specificmoment (initiation, implementation,renewal, review, termination, etc.)- in channel member relations.Using Ford and Rossen's (1982)method, Moore (1991) suggests thefollowing relationship states: new,growing, troubled, static, and inertor declining. Critical understandingand knowledge of subtleties inrelationships is growing. Consideringthe state of a channel relationship isworthwhile, particularly in referenceto what it could be. There is evidenceto suggest devoting time to suchreflection is warranted (Madhok andTallman 1998).

These states seem to be descriptiveof relational conditions and marketposition rather than developmentalin a lineal or stages sense. Thisunderscores that there exist categoriesor descriptions for types of behavioralrelationships between manufacturersand foreign distributors that mayeven reflect their economic success.As Moore (1991) points out, thelength of time that a manufacturerand foreign distributor have workedtogether is primarily a measureof the level of satisfaction withthe relationship. In another study,Moore (1992) expanded his work toinclude distributor motivation and theperceptions by both channel membersof sales trends and satisfaction.

Welch and Wilkinson (2005)used a network theoretic approachto investigate a single critical caseinvolving Australian and Japanese

firms. This network analysissheds further light on power andconflict. Moving beyond competingperspectives, Cavusgii, Deligonul,and Zhang (2004) attempt to teaseout contingencies in internationalchannel relationships. They employstructural equation modeling toexplore interaction effects andmoderating effects. Their empiricalwork starts with a recognition thatprior studies were often at odds withone another because of their effortsto reveal either/or factors, when thereality is more nuanced than that. Forexample, Cavusgii, Deligonul, andZhang (2004: 7) find that trust andformal contracts are not necessarilycompeting alternatives; under certainconditions of opportunism one maybe preferred, but often both maybe employed - "trust makes therelationship function and contractsinstitute and legitimize it."

Frazier, Gill, and Kale (1989)and Leonidou (1989) build on thework of El-Ansary and Stem (1972),which deals with power in channelrelationships. Leonidou (1989) usesthe tenn atmosphere in referring tothe interdependence that governs theworking relationship between Cypriotexporters and British importers. Thesuccess or failure of an exporter basedin a developing country is largelyassociated with how behavioralaspects of the relationship withthe foreign importer are managed.Katsikeas and Piercy (1991) followLeonidou's research on the characterof conflict in the relationshipbetween the developing countryindigenous manufacturer (Greece)

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and the developed country' importer(Great Britain). Their study reportsa prevalence of substantial perceptualdifferences between the tvvo parties inthe exporter-importer dyads althoughthere was no systematic character tothese.

An empirical study by Frazier,Gill, and Kale (1989) centers ondependence and reciprocal actionsin a distribution channel. Their studyon the use of influence strategiesin channel relationships focuses onindustrial manufacturers and dealersin a developing country (India).They report that a dealer's need tomaintain a channel relationship in aseller's market is primarily driven bymanufacturer contributions to salesand profit levels. They argue that thisreciprocal action may be contingenton the cultural context.

Cross-Cultural ApproachResearch that takes a cross-

cultural approach has as its primaryfocus the cultural context of foreignchannel member behavior. Suchinvestigation looks for evidenceof differences in channel memberrelationships by country. Empiricalstudies classified as taking thisapproach also provide informationon how various distribution principlesand practices operate in differentnational environments.

Kale and Mclntyre (1991)test 19 propositions based onHofstede's (1984) four dimensionsof culture (individualism, powerdistance, uncertainty avoidance, andmasculinity). Their research suggeststhat national culture has a systematic

impact on behavioral relationshipswithin distribution channels and thatthis phenomenon can be determined,known, and tested empirically. Theresults are based on 60 in-depthinterviews in five different nations.Yoon et al. (1996: 3) "comparechannel integration approaches,including strategic alliances, usedby approximately 2,000 firms in thePacific Basin countries of Australia,Japan and Korea as well as the US."Mehta et al. (2001) examine leadershipstyles in the US, Finland, and Poland,finding that "using leadership stylesto foster cooperation among channelmembers across different nationalcultures on a standardized basis isnot an appropriate channel strategy."Channel alliances between USexporters and their foreign distributorpartners are hampered by culturaldifferences; cultural distance leadsto lower levels of trust, commitment,and cooperation (Mehta et al. 2006:156).

Johnson, Sakano, and Onzo(1990) draw on the ideas of Frazier,Gill, and Kale (1989) as well asothers to develop a conceptualizationof control, influence, and conflict.They empirically examine US-Japanese behavioral relationships inthe marketing channel. Johnson et al.(1993) look at the exercise of powerin US-Japanese interfirm distributionchannel relationships. Rosenbloomand Larsen (2003) extend culturaldistance to the context of internationalbusiness-to-business e-commercemarketing channels. "Findings showthat there is a relationship betweenculture and channel communication"

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(Rosenbloom and Larsen 2003:309).

Lianes and Melgar (1993) lookat behavioral issues in exporter-importer channel relationships. Theyfocus on the cross-cultural contextbetween domestic (Filipino) exportersand foreign importers. Borin, VanVranken, and Farris (1991) examinethe issue of discrimination at the retaillevel in the Japanese distributionsystem of US manufactured consumergoods. Their findings do not supportthe claim that channel discriminationexists, at least not for those productsexamined in their study. As theynote, however, equal treatment ofcomparable domestic and foreignproducts by the channel does notensure a comparable market share.

Prescriptive ApproachResearch described as taking

a prescriptive approach withinthe behavioral framework focusesprimarily on the operating practices(often 'best practices'), procedures,and principles that characterizesuccessful exporters. Many of these12 articles in Table 1 deal withday-to-day channel operations in apragmatic way. This research forms apractitioner-driven approach to guidemanagers in directing their channelrelationships.

Shipley, Cook, and Barnett(1989) suggest that there are alimited number of empirical studieson how manufacturers create,develop, and maintain effective andprofitable relationships with theirforeign distributors. The literaturereviewed in this study confirms

their observation. The work ofKeitt (1990), Rosenbloom (1990),Thomas and Wilkinson (2005),and Weigand (1991) is primarilyinformational, descriptive, and "howto" in style. Keitt (1990) writes fromthe standpoint of providing assistanceto US finns. His study addresses theissue of channel relationships andthe most common mistakes whenselecting a foreign distributor. Fram(1992) - citing Keitt and exploringsome of these pitfalls - develops anexploratory study on the selection ofinternational distributors.

Weigand (1989, 1991) focusedon parallel import channels andre-importing (gray marketing), atangential - though growing - aspectof international marketing channels.Weigand ( 1991:56) notes that the useof unauthorized marketing channels is,at least in part, due to the opportunistic(deceitful) intermediaries whodemonstrate "perfidious behavior"and discriminatory pricing bymonopolistic manufacturers. Weigand(1991) cites several well-known legalcases involving parallel importerssuch as K-mart Corporation. Parallelchannels can be utilized to supplementauthorized distribution channels(Michael 1998). Based on four casestudies, Grunert et al. (2005: 428)find that market orientation in thevalue chain is and should be related tomarket factors, nature of relationship,regulations, and mental models ofdecision makers.

Rosenbloom (1990) examineshow to motivate a foreign distributor,develop good communications, befair and reasonable by their standards.

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and be mutually committed to acontinuing relationship. He notesthat many environmental and culturalcustoms and practices affect theinternational marketing channelrelationship. Here again, broadempirical investigation is neededsince anecdotal information is not asufficient basis from which to builda model that moves beyond intuitive,practitioner-defined prescriptivestatements.Thomas and Wilkinson (2005: 125)note that US marketing managersaccustomed to ceding control indomestic distribution need to knowthat in high-growth emerging markets,distribution channels are malleable- they should "shape and mold theway distribution takes place."

Behavioralist FrameworkResearch Methods

Though Gaski (1984: 9)illuminated "many problems withthe empirical work done in the area,both methodological and conceptual",it appears that synthesis is yet elusive.Research employing a behavioralframework is primarily exploratoryand foundational in nature. Thisis especially evident in the worksof Borin, Van Vranken, and Farris(1991), Fram (1992), Kale andMclntyre (1991), and Shipley, Cook,and Barnett (1989). Though morerecent and with more sophisticatedtechniques (cluster analysis), researchby Balabanis (2005) is nonethelessexploratory.

Studies of manufacturer andintermediary relationships attempt toidentify and explore specific aspects of

this interaction or exchange. Cavusgil,Deligonul, and Zhang (2004), Frazier,Gill, and Kale (1989), Johnson etal. (1993), Katsikeas and Piercy(1991), Lianes and Melgar (1993),and Zhang, Cavusgil, and Roath(2003) offer empirical insights intobehavioral relationships. Althoughbehavioralists do not explicitly labeltheir research exploratory, this isoften suggested in the conclusions.Frazier and Antia (1995: 321) pointout that there are "limitations oftransaction cost analysis and agencytheory" and indicate that "qualitativeresearch is urgently needed to sort outtheoretical difficulties in the channelsarea." Cavusgil and Kirpalani's(1993) "findings reveal that factorsresponsible for internationalcommercial success are different forsmall and large firms."

The importance of this bodyof work lies in the fact that eachstudy contributes to building aconceptual understanding of channelmember behavior, interactions, andrelationships. As Kale and Mclntyre(1991: 33) state, "with regard tobehavioral relationships withindistribution channels, a generalconsensus exists among researchersthat a generalizable theory of theexchange process within channelscan be achieved only by conductingstudies of different countries,cultures, and industries." in a studyof 290 manufacturers who use foreigndistributors Bello, Chelariu, andZhang (2003) examine antecedentchannel conditions that influencerelational exchanges. They presenta very complete causal model of an

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international channel relationship.The procedure for conducting theresearch was quite rigorous; 20in-depth interviews led to a mailedquestionnaire pre-test (n=100) andfinally a mailed survey (290 usableresponses, 72% return rate). Bello andcolleagues pursuit of understandinginternational distribution channelsimplies the phenomenon is complex.In their 2003 work, they suggest futureresearch design must incorporateorganizational culture in addition tonational culture. They also call formore sophisticated enquiries intodyadic and longitudinal issues.

The methods used by a number ofscholars (Bello, Chelariu, and Zhang2003; Borin, Van Vranken, and Farris1991; Johnson et al, 1993; Johnson,Sakano, and Onzo 1990; Leonidou1989) test specific hypotheses relatedto exporter-importer behavioralrelationships. Some of these weredesigned to examine cross-culturalaspects of the dyadic or exchangerelationship. Others did not have aprimary interest in cultural issues,e.g., Katsikeas and Piercy (1991)using unmatched Greek exportersand British importers and Leonidou(1989) using unmatched Cypriotexporters and British importers.Lianes and Melgar (1993) studiedexporters from the Philippines andimporters from four regional groups(Asia, Europe, Australia, and theUS) and then expanded to cross-cultural issues based on the studiesof Katsikeas and Piercy (1991) andLeonidou (1989). Frazier, Gill, andKale (1989) and Paswan and Young(1999) studied manufacturers and

distributors in India to test theirconceptual framework. Moore ( 1991,1992) studied unmatched Britishmanufacturers and West Germanagent distributors but no specifichypotheses were tested. Shipley,Cook, and Barnett (1989) conductedinterviews of British companies withoverseas distributors in an effort todevelop a conceptual framework.

Some authors (Borin, VanVranken, and Farris 1991; Johnsonet al, 1993; Johnson, Sakano, andOnzo 1990; Kim 2003; Welch andWilkinson 2005) studied .Tapanesedistributors and tested hypotheses.Borin, Van Vranken, and Farris(1991) used a unique approach tocollect data and evaluate (code)responses. Photographs were takenin 131 retail stores of six merchandisevariables to test the discrimination inmerchandising support that a specificconsumer good (shampoo) receiveswhen foreign brands are comparedto domestic brands. They codedthe photographs as responses by131 retailers to the six merchandisevariables. This provided data forstatistical analysis, t-tests, andfrequency distributions.

Fram (1992) used a differentmethodological approach. In anexploratory study of how fourteenindustrial manufacturers selectinternational distributors, Fram used atwo-phase Delphi method. Responseson 44 actions were grouped into fourmajor areas for statistical presentationin frequency charts. Fram suggeststhat the data generated from sucha Delphi method provide a goodfoundation for the development of

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hypotheses that can then be testedon a larger population. Using ascenario-based survey Marshall(2003) examined interactive decision-making of US and Peruvian exportmanagers. With nearly 200 usableresponses, this technique of gettingresponses to fictitious but realisticsequences of events, he was able tosystematically map out the decisionprocess under a specified contextwhile pennitting variance in items ofinterest.

CONCLUSIONThe classification system proposed

in this paper is a comprehensiveway for scholars and practitionersto analyze and appreciate researchstudies on international channelsof distribution. It can be used toidentiiy both the major focus (primar>'framework) and the specific emphasis(approach) in research studies.Studies that fall under the structuralframework umbrella are described astaking a developmental/evolutionaryapproach, transaction cost approach,or comparative approach. Researchutilizing a behavioral framework maytake a relational approach, cross-cultural approach, or prescriptiveapproach. This typology cancertainly be used to design futureresearch on international marketingchannels. Classification schemes canbe an extremely useful component foradvancing knowledge exploration andhelpful for hypothesis formulation.Frazier (1999: 226) indicates that"we have barely touched the surfaceof all the managerial issues that needto be addressed. ... many issues of

managerial importance relating tothe organization and management ofchannels of distribution have receivedno attention in empirical research."

As noted in this paper, there are anumber of questions and issues relatedto research on international marketingchannels. Some of these were raised inthe literature; others became apparentwith the classification of studiesbeing reviewed. Some scholarsconsider international channels asa sub-set of theoretical work onmarketing channels. Others viewinternational distribution channelsas a separate field. Although theyshare some foundational conceptsand have terminology in common,there are many differences as well.Similarities seem to be more evidentin structural aspects whereas evidenceof divergence is greater in behavioralaspects.

The classification systemadvocated in this paper helps inrecognizing commonalities anddifferences in international anddomestic channels of distribution.A comparison of research effortsthat use different frameworks andapproaches also reveals a number ofinteresting developments in channelresearch. Empirical studies thattake a transaction cost approach, forexample, often use more sophisticatedtechniques and methods. This isparticularly evident in studies thatexamine vertical integration in variousnational markets. Studies that place anemphasis on behavioral constructs inthe domestic manufacturer and foreigndistributor relationship often usetheories and methods from a number

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of disciplines. This is particularlyevident in studies dealing with cross-cultural differences. The questionremains whether these frameworksand approaches will grow furtherapart or if they can be combined intoa single eclectic framework with anintegrated approach (Hill, Hwang,and Kim 1990).

For a finn engaged in internationalsales, die selection and management ofmarketing channels is a key strategicarea in the marketing mix. Based onthe review and classification of cuiTentresearch, there are a number of studiesthat add to our comprehension ofthe structural and behavioral aspectsof the manufacturer and distributorrelationship. These studies - acombination of theoretical, empirical,and practitioner-focused efforts - makea major contribution by providing aconceptual framework from whichto meaningfully grasp internationalchannels of distribution.

A diligent examination of theliterature reveals that research effortshave been expanding. As scholarshave noted, relative to other topics,there are a limited number of studiesdevoted to international channelsof distribution. There exists a needfor more systematic and rigorousempirical studies that test emergingconstructs. Scholars conductingmarketing channel research inthe international domain alreadyrecognize the need to construct andtest more comprehensive models.The study of distribution channels isprogressing from one that has beenlargely non-analytic, descriptive, andanchored in conventional wisdom to

one that is more analytic, rigorous, andemploys techniques and approachesfrom a variety of disciplines. In theyears ahead we can expect majorcontributions as more scholars focuson issues specific to internationalchannels of distribution. Twoemerging positions in the literatureare information flow and cooperation(cf. Buzzell and Ortmeyer 1995;Mehta et al. 2001; Rosenbloom andLarsen 2003).

The level of sharing of proprietaryknowledge in relationships isincreasing; the value of such sharedinfonnation is also increasing. That is,not only is the amount of infonnationexchange growing, but so to is itsimportance. While e-commerce cancertainly be considered a new medium(Cateora and Graham 1999; Cort 1999;Rosenbloom and Larsen 2003), it isthe heightened transparency (reducedinformation asymmetry) amongeconomic actors that is revolutionary.That manufacturer, distributor, andcustomer can communicate morefreely is altering economic behaviorand the way in which value isassessed. Presently, in the field ofglobal supply chain managementcustomers can "see" many moresuppliers and suppliers can "see"many more customers; this greaterbreadth has also been accompaniedby increased depth. Customers can"see" more deeply into suppliers'value chains and suppliers know moreabout customers. Such revelations inamount and type of infonnation havefundamentally changed transactions.Some economic principles have notchanged; more infonnation is not to

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be equated with better infonnation.Efficiency concerns with informationcollection and analysis are perhapsmore significant in an era in whicha plethora of information must besorted for value at either end ofexchange.

Collaboration, cooperation,and alliances seem to be pushingout certain forms of adversarialcompetition. Recognition that mosteconomic activity takes place in acontext- both temporally and amongother actors in a network (customersand competitors) - leads to explicitconsideration of multi-point games.That options can be held and lostalso enters into a firm's calculus.The use of multi-period scenariosis increasingly turned to ensure aviable future. Strategy and strategicpositioning is no less important.Ruthlessness has not been eliminated,as much as it has been displaced withinsight into alignment of incentives.Buzzell and Ortmeyer (1995) notethe extension of relationships, withactors becoming more involved ineach other's activities (e.g., jointproduct development, planning, andpromotion). Li and Dant (1997:209) note that despite greater andasymmetric power, suppliers in anexclusive dealing (ED) channelrelationship "adopt a benevolentperspective toward their ED resellersand use their power to enhance thecoordination and organization ofchannel activities, rather than in anopportunistic fashion." Li (1996)sees channel relationships as dynamicand best approached - either as anacademic or practitioner - from a

network perspective. Anderson,Day, and Rangan (1997) warn againstviewing distribution channels asa peripheral activity; relegatingdistribution channels to such aposition forgoes the opportunity torealize competitive advantage.

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