The Role of Dealers’Non-Mediated Power in Fostering SME Manufacturers’ Cooperation: SME Manufacturers’ Perspective

Purpose - Distribution channels cannot function without cooperation. While evidence suggests channel power plays a fundamental role in fostering successful manufacturer-dealer channel cooperation in Western countries distribution systems, little is known empirically as to how dealers’possession of non-mediated powers influence SME manufacturers’ cooperation in Asian developing countries. Research design, data, methodology - Drawing upon the extant distribution channels literatures; this study conceptualizes a model and examines the effects of dealer’s non-mediated powers on manufacturing SME firms, as well as the mediating influence of trust, relationship satisfaction and commitment. A survey of 400 manufacturing SMEs in Taiwan empirically supports the proposed hypothesis. Results - The model is acceptable in terms of overall goodness of fit. Acceptable model fit are indicated by χ2/(df): 2.35, GFI≧.90; RMSEA values≦ .08; IFI, TLI and CFI values≧.90. Our results indicate that, GFI (0.910), IFI (0.937), TLI (0.903), CFI (0.936), and RMSEA (0.079) and therefore, achieved the suggested thresholds. Conclusions - The results of this study have some managerial implications for managers in the dealer’s firms. The overall implication from the findings is that managers can utilize expert, referent and traditional legitimate powers to attain channel cooperation with manufacturing SMEs in addition to garnering their trust, relationship satisfaction and commitment.