Behavior Control and Perceptions of Trust in Marketing Channels: Does a Friend Role Matter?

Description

Control is important in business transactions to ensure desired business performance. However, control seems to conflict with another important business element, trust. Control as an obtrusive action undermines trust because control seemingly signifies suspicions about the controlled party’s intention and/or ability in conducting the business transaction. To clarify this confusion, scholars classify formal control in business into output control and behavior control. Output control monitors the visible consequences of a partner’s actions, whereas behavior control involves regulating behaviors by evaluating the processes and methods that produce the focal outcomes (Anderson and Oliver 1987). Research finds that output control functions to mitigate opportunism, whereas behavior control is elusive in its effects on trust and opportunism (Das and Teng 1998; Heide et al. 2007).This project proposes that there are three reasons that lead to the above inclusive results of the control-trust relation. First, prior research simply assumes that the two parties involved in the control play a single role of businessperson (Granovetter 1985). Businesspeople can also become friends because of long-term cooperation (Heide and Wathne 2006); if a friend or business friend is put under control, what is his/her reaction to the control action in terms of his/her perceptions of trust. A friend may have different role expectations than a businessperson has and thus control may invoke different trust perceptions between a friend and a businessperson (Grayso 2007). Second, behavior control can be further classified into activity control and capability control. Activity control involves the monitoring of firm marketing activity-related behaviors; capability control emphasizes the controlled party’s capability development that enables performance (Challagalla and Shervani 1996). These two behavior control modes may have different effects on trust perceptions for the controlled party. Third, prior research treats trust as a global concept without discerning its dimensions. Trust can be decomposed into goodwill and competence trust. Competence trust requires the trustee’s ability to do what he is expected to do, whereas goodwill trust emphasizes the trustee’s benevolence to consider the trustor’s interest (Mayer et al. 1995). Thus, we have a 2x2 (activity vs. capability control; businessperson vs. friend role) matrix in which different modes of behavior control may cast varied perceptions of trust on the controlled party (Hill et al. 2009), which in turn are the function of his/her perceived relationship roles (Heide and Wathne 2006). This research attempts to unravel this matrix to shed light on the aforementioned control-trust controversy.