Interrelations among a Channel Entity's Power Sources: Impact of the Exercise of Reward and Coercion on Expert, Referent, and Legitimate Power Sources

Several distribution channel studies have examined the effects of various sources of a channel member's power on such phenomena as power, conflict, and satisfaction. However, as causal relationships among these power sources have not been considered, the author investigates some aspects of this issue. Specifically, the effects of reward and coercion on the expert, referent, and legitimate power sources in a marketing channel are identified. Results indicate that (1) a supplier's application of reward and punishment does affect the strength of its other three power sources and (2) these relationships exert a major influence on whatever impact reward and coercion may have on other channel phenomena such as supplier power and dealer satisfaction. The implication of this finding of a compound effect of the use of certain power sources is that channel entities should be even more circumspect about such action than would be advised on the basis of prior research in this area.