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Most managers, when confronted with a difficult strategic decision, would like to know what is the prevailing practice in their industry. Prevailing practice interests managers, in part, because it may indicate which decisions are good, even “best.” The rationale is “Darwinian economics,” which proposes that competitive markets operate to force at least an approximation of optimal behavior, because “wrong” decisions are extinguished by the market mechanism. If so, the bulk of survivors make good business decisions and their collective practice is worth knowing, meaning it should be difficult to improve upon. This paper tests whether prevailing practice represents “good” decisions. The context is the decision whether to fill a sales district with a company (integrated) sales force or with outside agents (independents). The outcome of the choice is the ratio of sales to the cost of running the sales force, i.e., selling efficiency. A model is described which summarizes industry decisions, and two propositions are developed. Proposition 1, a simple version, states that efficiency declines as firms depart from the industry rule as to when they should integrate. Proposition 2, a contingent version, states that efficiency declines as firms depart from the industry rule in unpredictable selling environments but that conforming to the rule has no impact in predictable environments. The rationale is that firms learn the environment well enough to know when to depart from the rule in predictable settings but not otherwise. The relationship between efficiency and conformity to prevailing practice is examined for 93 sales districts of 11 recognized electronic component manufacturers. The results support proposition 2: the most efficient sales forces conform to prevailing practice and the least efficient deviate, but only in uncertain environments. In more certain environments, conformity and efficiency are unrelated. Implications (such as when it pays to be different) and suggestions for future research are discussed.

This article develops and tests a model of integration of a marketing function, personal selling. The model, derived from transaction cost analysis as developed principally by Williamson, is formulated as a logistic function, which is estimated with data from the electronic components industry. As expected, integration is associated with increasing levels of asset specificity, difficulty of performance evaluation, and the combination of these two factors. Contrary to the transaction cost model, neither frequency of transactions nor interaction of specificity and environmental uncertainty is significantly related to integration. The transaction cost model improves significantly upon the fit of a simple model relating integration to company size alone. These results suggest that for studying transactions of this kind, it is fruitful to view the firm as a governance structure.

This study is an empirical test of the transaction cost determinants of opportunism by salespeople who sell electronic components in 169 U.S. sales districts. Opportunism by salespeople, as reported by their supervisors, is modeled as a function of (i) whether the salesperson is an employee or a manufacturers' representative; (ii) characteristics of the sales environment central to transaction cost analysis. The results generally support the transaction cost framework. They indicate that an especially powerful way to combat opportunism is to induce salespeople to perceive high goal congruence, i.e., that what benefits the company benefits them.

Recently, increasing attention has been paid to the question of how to build stable, long-term relationships between manufacturers and members of conventional channels. This descriptive field study concerns a basic requirement for building long-term relationships, which is the expectation by a marketing intermediary that the relationship will last. Hypotheses about the continuity of relationships are developed from the literature on social exchange, bargaining, and negotiation. These hypotheses are framed as a simultaneous equation system, which is estimated via three-stage least squares on a sample of 690 relationships (dyads) involving manufacturers and their independent sales agents (manufacturers' representatives). Results substantially support the model, highlighting the importance of interpersonal relationships in insuring the continuity of the dyad.

A “frontier issue” in international marketing is the appropriate choice of entry mode in foreign markets. The objective of this paper is to offer a transaction cost framework for investigating the entry mode decision. This framework provides 1) a theoretical basis for systematically interrelating the literature into propositions, 2) propositions about interactions which resolve the apparently contradictory arguments advanced to date. Specifically, the paper:Illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant;Proposes that the most appropriate (i.e., most efficient) entry mode is a function of the tradeoff between control and the cost of resource commitmentadvances testable propositions delimiting the circumstances under which each mode maximizes long-term efficiency.The entry mode literature is reviewed in the context of these propositions, and guidelines are derived for choosing the appropriate mode of entry, given certain characteristics of the firm, the product, and the environment.© 1986 JIBS. Journal of International Business Studies (1986) 17, 1–26

Should a business function be vertically integrated? Increasingly, economists have acknowledged that this is the wrong question. The right question is to what degree a function should be integrated, whereby integration is a continuum anchored by the options of market and hierarchy (Williamson, 1985). Movement along the continuum from market contracting to unified governance is accompanied by an increased degree to which resources are placed at hazard. The firm is compensated for this by an increased level of control that it presumably will use "correctly" in order to generate superior profit outcomes. The central questions of transaction cost analysis are twofold: When will the firm need more control (that is, when do lower-control outcomes become less desirable), and when will the benefits of increased control more than offset the costs of resource commitment and risk? Oliver Williamson (1985) offers a theory to answer these questions. In this paper we examine empirically the theory's predictions in the context of the multinational corporation (MNC), which attempts to control the operations of foreign "subsidiaries" (business units) that it owns in whole or in part. We

Competitive reactions are recognized as a driving force influencing marketing decisions. The authors seek to explain how established competitors in an oligopoly react to a significant new entry in their market. It has been suggested that at least some established competitors will react to a market entry positively and at least some competitors will react negatively or not at all. Both theory and evidence suggest that not all firms will react to an entry in the same way. The authors posit that interfirm differences in competitive reactions to entry can be predicted by observing, for each competitor, the elasticity of each marketing mix variable. Competitors will retaliate with their effective marketing mix “weapons” and retreat with their ineffective marketing instruments. These predictions are tested by estimating the parameters of an econometric model of demand response functions and reaction functions with data from the market for an over-the-counter gynecological product and from the airline industry. Results, replicated in the two markets, are substantially consistent with predictions.

This exploratory study assesses the impact of variables associated with a financial portfolio model (marginal returns, growth, synergy, and uncertainty) and characteristics of the channel relationship (power, organizational climate, and communications) on the selling time allocated by 71 independent sales agencies to the principals they represent. The results indicate that the time allocated to principals is consistent with a normative microeconomic model; however, aspects of the channel relationship, particularly communications, participation, and feedback, also influence resource allocations.

The Robinson, Faris, and Wind buyclass framework has been called one of the most useful concepts in organizational buyer behavior, yet the entire model has received little empirical attention. Part of the explanation is the difficulty of obtaining valid data from members of the buying center. The authors study the buyclass framework using a novel approach: querying the managers of salesforces about the behavior their salespeople encounter on the part of their industrial customers. In phase 1, model development, the authors study the model's applicability in a relatively homogeneous, controlled setting (one industry, few firms). In phase 2, model replication, they extend and validate the phase 1 findings using multiple firms and industries. Much of what salespeople observe is found to correspond closely to the buyclass theory of organizational buyer behavior. Also, the “problem newness” and “information needs” dimensions are found to be strongly related, as expected. However, “seriousness of consideration of alternatives” seems to be a separate dimension that does not operate entirely as predicted by the buyclass framework.

Manufacturers introducing an industrial product to a foreign market face a difficult decision. Should the product be marketed primarily by captive agents (company salesforce and company distribution division) or by independent intermediaries (outside sales agents and distributors)? This is an issue of downstream vertical integration. The authors explore the issue through an empirical investigation of distribution channel choice in foreign markets by U.S. semiconductor companies. Using original interview data, they develop scales to measure key variables. With these measures they build a logistic regression model of what factors affect the form of the distribution channel chosen in various foreign markets. The results indicate that integration is associated with the degree of transaction specificity of assets in the distribution function and whether or not the product being introduced is highly differentiated. There is evidence that the product will be sold through whatever channel is already in place, if any. Further, American firms seem more likely to integrate the distribution channel in highly developed industrialized countries (Western Europe) than in Japan and Southeast Asia, which are more culturally dissimilar. Implications for managers faced with a channel choice are explored.

Background There is a need for qualitative research to help develop case conceptualisations to guide the development of Metacognitive Therapy interventions for Eating Disorders. Method A qualitative study informed by grounded theory methodology was conducted involving open-ended interviews with 27 women aged 18–55 years, who were seeking or receiving treatment for a diagnosed ED. Results The categories identified in this study appeared to be consistent with a metacognitive model including constructs of a Cognitive Attentional Syndrome and metacognitive beliefs. These categories appear to be transdiagnostic, and the interaction between the categories is proposed to explain the maintenance of EDs. Conclusions The transdiagnostic model proposed may be useful to guide the development of future metacognitive therapy interventions for EDs with the hope that this will lead to improved outcomes for individuals with EDs.