Price, authority and trust in international distribution channel relationships

Sven A. Haugland and Torger Reve

Scandinavian Journal of Management, 1994, vol. 10, issue 3, 225-244

Abstract: This paper focuses on inter-firm transactions in international distribution channels. Special interest is paid to the governance of inter-firm transactions. We argue that price, authority and trust represent different governance mechanisms, which can be combined into a governance vector. Price reflects the use of market mechanisms, while authority means the reliance on organizational mechanisms such as rules and procedures. Trust, on the other hand, implies monitoring transactions by social norms and the development of personal relationships. A model is developed and empirically explored in the context of international distribution of Norwegian farmed salmon.

Date: 1994
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