UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ NGUYEN THI TUYET OANH CHANNEL PERFORMANCE ENABLERS, CHANNEL CONFLICT AND CHANNEL MEMBER PERFORMANCE: AN INVESTIGATION INTO VIETNAM AIRLINES’ AGENCIES MASTER OF BUSINESS (Honours) Ho Chi Minh City – 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ NGUYEN THI TUYET OANH CHANNEL PERFORMANCE ENABLERS, CHANNEL CONFLICT AND CHANNEL MEMBER PERFORMANCE: AN INVESTIGATION INTO VIETNAM AIRLINES’ AGENCIES ID: 21110014 MASTER OF BUSINESS (Honours) SUPERVISOR: LUU TRONG TUAN PH.D Ho Chi Minh City – 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENTS This thesis could not have been possible without the help of many people. First, I would like to take this opportunity to express my sincere gratitude to Dr. Luu Trong Tuan for his clear and careful direction, his guidance and his corrections of my thesis. I especially appreciate his continual and on-going enthusiasm in responding, reminding, and assisting in all aspects of this endeavor.
Secondly, I would like to express my sincere thanks to my company, Thien Hai Services Travel Trading Corporation, as well as my managers and supervisors for their patience, understanding and support of my thesis. Thirdly, I would like to thank my dear colleagues, friends and classmates for their valuable encouragement during the many months that I was working on this thesis. Special thanks are also sent to those individuals working for the Vietnam Airlines’ agencies who have volunteered their valuable time in meeting, speaking with and responding to my thesis survey. Last, but not least, I would like to express my heartfelt thanks to my family for their support, their encouragement, and their faith while completing my thesis.
i LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This study investigates the relationships between channel performance enablers which include trust, commitment and cooperation, as well as channel conflict, and channel member performance in service industries, especially in the area of logistics as found in the airlines industry. The objective of this study is to determine the influence that both channel performance enablers and channel conflict has on channel member performance. Our research questions were: “Are there positive relationships between channel performance enablers and channel member performance?” “Is there a negative relationship between channel conflict and channel member performance?” To test the hypotheses, we studied 208 respondents working in 18 various Vietnam Airlines’ agencies. The data collection was based on the questionnaire adapted from previous studies and modified for the service industry as well as for the Vietnam context.
(Dwyer and Oh, 1987; Kumar et al,. 1995; Lumineau and Oxley, 2007; Sezen and Yilmaz, 2007). As expected, the results of the study show the existence of positive relationships between channel performance enablers and channel member performance. In these relationships, cooperation has the strongest positive relationship with channel member performance (ß = 0.
It shows that to achieve high channel member performance, agencies should increase the cooperation in the channel. Next, commitment has the second strongest positive relationship with channel member performance (ß = 0. And last, trust has the least ii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com strongest positive relationship with channel member performance (ß = 0. However, the findings did not state the negative relationship that exists between channel conflict and channel member performance (ß = 0.
Past and previous research focused on the relationships between channel performance enablers and channel member performance primarily in the manufacturing sector. This study here contributes to the practical theory between channel performance enablers and channel member performance in a different industry: the service industry. Key words: Trust, commitment, cooperation, channel conflict, channel member performance, Vietnam Airlines’ agencies. iii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ACKNOWLEDGEMENTS.
ii LIST OF FIGURES. vii LIST OF TABLES.1 Channel member performance .2 Trust and channel member performance .3 Commitment and channel member performance .4 Co-operation and channel member performance .5 Channel conflict and channel member performance.1 Step 1: Item generation step .2 Step 2: Pilot study. 21 iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.3 Step 3: Main study .4 Measurement of variables .5 Methods of data analysis .1 Reliability analysis measured by Cronbach’s Alpha.2 Validity measured by Exploratory Factor Analysis (EFA) .3 Multiple regression analysis .3 Cronbach’s Alpha analysis .4 Exploratory Factor Analysis (EFA) .1 Testing of the fit level of model .2 Results of regression analysis .3 Limitations and further research. 59 APPENDIX 1 : QUESTIONNAIRE – ENGLISH VERSION.
67 v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com APPENDIX 2 : QUESTIONNAIRE – VIETNAMESE VERSION. 71 APPENDIX 3 : DATA ANALYSIS RESULTS. 75 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 2.2: Regression Standardized Residual .3: Normal P-P plot of Regression Standardized Residual .47 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 2.1: Factors and items .1: Descriptive statistic of samples .2: Cronbach’s Alpha of four factors and channel member performance .3: Means, standard deviations and reliabilities of channel performance enablers, channel conflict and channel member performance .4: KMO and Bartlett’s Test for factors .5: Total Variance Explained .6: Rotated Component Matrix .10: Correlation matrix for variables .13: Hypothesis testing results .51 viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1 INTRODUCTION 1.1 Problem statement Over the past few decades, there have been increasing channel strategies in the globalization of markets, and the emergence of the Internet. The use of multiple channels is to serve a given product.
The market is quickly becoming the rule rather than expectation (Frazier, 1999; Moriarty and Morans, 1990). This is the basic motivation for suppliers, who establish the multi-channel distributions, to increase their market share and reduce their costs (Frazier and Antia, 1995). Companies benefit from channel strategies in a variety of ways. It allows them to understand customer needs as well as their purchasing patterns.
Companies with different kinds of products can satisfy much more of their customer needs as well as attract new customers. The large existing distributions can enable companies to focus on more precise target markets, improving their competitiveness (Kevin and John, 2002). However, multiple channels can cause conflicts within their own systems. In fact, channel conflict is the most serious concern for companies.
In a survey, Gilbert and Balcheldor (2000) state that channel conflict is the biggest issue companies face today in their sales strategy. So, companies are attempting to redefine and redesign the structure of their channel distribution and make it more efficient while improving the channel member performance as well. There is a need for empirical research to understand channel conflict and its influence on channel 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com member performance. The first purpose of this paper is to establish the relationship between channel conflict and channel member performance.
The trends that influence consumers’ preference for determined products and services have a strong impact on the issues related to channel management (Frazier, 1999). Those channels are combined in an integrated procedure from the channel members and the consumers (Rosenbloom, 2003). The relationships between channel members are very complicated. Their goals and objectives are different.
Therefore, they tend to desire to achieve each side’s goals and ignore the others. This leads them to be distant in their own relationship. By improving and getting them closer to each other’s goals and objectives, companies have to build some channel performance enablers, including trust, commitment and cooperation. Channel performance enablers are mentioned in many previous research projects to find the most effective way for manufacturers as well as distributors (Rousseau et al.
They show that the channel performance enablers make the whole system operate more efficiently and more effectively. They probe the primary aspects of channel member performance; such as, how trust, commitment, and cooperation impacts the system. However, they have studied some of these aspects separately. They have individually studied the relationship by either conflict or trust or commitment or cooperation in the relationship between them in manufacturing (Nair, 2008; Lusch, 1976).
This paper will simultaneously study how channel conflict and all channel performance enablers have influence on the channel member performance in these complex relationships in one specific model. In this study, we also 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com investigate the relationships between them in a service industry such as the airlines, an important logistic industry, instead of manufacturing like previous research projects. In addition, this paper will focus on the special characteristics of an emerging market like Vietnam.2 Research Aims For understanding the influence of channel performance enablers including trust, commitment, and cooperation, and channel conflict on channel member performance between Vietnam Airlines’ and its agencies, this research aims to investigate: 1) The positive relationship between channel performance enablers and channel member performance. 2) The negative influence of channel conflict on channel member performance.3 Research scope Vietnam Airlines’ agencies are numerous and of various types.
According to Vietnam Airlines statistical nationwide figures, there are 222 agencies in the South, 64 agencies in the Central and 166 agencies in the North. With over 450 company agencies, channel performance enablers and channel conflict between Vietnam Airlines and its agencies play an important role in its agencies’ contribution and participation as well as its success and performance. However due to the limitations of data availability, research funds and time, the scope of this research is therefore limited to Vietnam Airlines’ agencies located in Ho Chi Minh City and will investigate the influence of channel performance enablers and 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com channel conflict on channel member performance. This is considered appropriate because Ho Chi Minh City has the highest number of Vietnam airlines’ agencies.4 Research contribution The paper helps to expand the amount of literature about the relationships that exist between channel performance enablers, channel conflict and channel member performance.
It identifies the factors that enable and improve channel member performance as well as the factors that disable and destroy channel member performance. Based on these factors, managers and agencies can find the best way to increase channel member performance. It also probes the relationships between channel performance enablers, channel conflict and channel member performance in a new industry: services instead of manufacturing. In an emerging market like Vietnam, the services industry is considered as a “targeted” industry to help develop the economy.
Additionally, the findings will help to examine the relationships between channel performance enablers, channel conflict and channel member performance studied in an emerging market within a specific culture: Southeast Asia.5 Research structure This study is divided into five chapters as follows: The first chapter is an “introduction” which includes the problem statement, research objectives, research scope, research contribution and the structure of this research. 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The second chapter is “literature reviews” which summarizes the concepts, the theories, the experiences and previous research about the elements that contribute to the relationship between trust, commitment, cooperation, channel conflict and channel member performance. The research model including hypotheses and conceptual framework is also given in this chapter. The third chapter pertains to the “research methodology”.
It introduces the research process, data collection and methods of data analysis. The fourth chapter explains the “data analysis”. It reports the analysis results from the collected data obtained via the surveys. The last chapter is devoted to “conclusions”.
It discusses the result of the “data analysis” part and provides recommendations. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 2 LITERATURE REVIEW This chapter provides the definitions of channel member performance, channel performance enablers including trust, commitment, cooperation and channel conflict as well as discusses the relationships between them and channel member performance based on the previous research.