Antecedents and consequences of replacing international independent intermediaries

What is it about?

What characterizes the relationships with intermediaries that are soon to be replaced, and are the replacements successful? The paper aims to discuss these issues. The relationships with terminated intermediaries that were replaced by sales subsidiary or home based direct sales were characterized having higher trust, communication and control than extended relationships before replacement. While it may be surprising that these quite successful relationships were terminated, this is in line with internationalization process theories. The replacements ,both intermediaries that were replaced by other intermediaries and by sales subsidiary/home-based direct sales, were highly successful in terms of improvement in performance and behavioral relationship variables.

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Why is it important?

The findings suggest that excellent performance by independent distributors may trigger actions by foreign principals to circumvent the distributor and distribute through their own organization. A distributor who aims to continue the present relationship with the exporter may ensure that the performance is satisfactory for both parties, but perhaps not excellent. The distributor should also ensure that there are satisfactory termination mechanisms in the distributor contract .