Sandip Trada and Baljeet Singh
This research aims to analyse the potential role of perceived fairness as a complete governance mechanism in distribution channels. In doing so, this study examines the direct…
Abstract
Purpose
This research aims to analyse the potential role of perceived fairness as a complete governance mechanism in distribution channels. In doing so, this study examines the direct impact of perceived fairness on governance costs and its interactive effect on the driver (i.e. relationship-specific investments (RSIs) and deterrent (i.e. communication) of suppliers’ governance costs.
Design/methodology/approach
This research used a structural modelling approach to analyse the matched data collected from 241 pharmaceutical suppliers and distributors and test the proposed model.
Findings
The findings reveal that perceived fairness directly reduces governance costs in distribution channels. Further, they suggest that perceived fairness weakens the positive impact of suppliers’ RSIs and strengthens the negative effects of communication on suppliers’ governance costs.
Research limitations/implications
This study suggests that perceived fairness is a novel and effective way to govern distribution channels. These findings provide a holistic understanding of how perceived fairness reduces governance costs, directly and indirectly.
Practical implications
The findings suggest managers should design fair channel policies and train sales personnel to emphasise fairness during channel interactions. This would foster an equitable channel climate that safeguards investments and reduces governance efforts.
Originality/value
Prior literature has mostly overlooked the potential role of perceived fairness in distribution channels; however, this study addresses this gap and highlights the dual role of perceived fairness in channel governance.
Details
Keywords
Bhoomi Ruchit Mehta and Sandip Trada
Through this case, participants will be able to:▪ understand the different approaches to preparing operating budgets;▪ classify the costs based on traceability to its cost…
Abstract
Learning outcomes
Through this case, participants will be able to:
▪ understand the different approaches to preparing operating budgets;
▪ classify the costs based on traceability to its cost centres;
▪ understand the difference in budget preparation and its analysis under different cost centres;
▪ put together the required information, identify the format and prepare major operating budgets; and
▪ evaluate operating budgets and give suggestions to the company based on budget analysis.
Case overview/synopsis
This case is about a manufacturing company that is going to introduce a budgeting system. It highlights the process of information collecting from key employees for budget preparation. This case also deals with various decisions to be made during the implementation of the new system such as the context of budgets, cost units and sequence of budgets.This case will help students to enhance their understanding of the operating budgets. The students will able to visualize the difficulty faced by companies to implement a new system.
Complexity academic level
This case is applicable in the courses such as Master of Business Administration, Master of Commerce or other postgraduate studies. This can also be discussed in professional courses such as Chartered Accountants, Certified Management Accountants, Company Secretaries, Institute of Cost and Works Accountants of India and Chartered Financial Analysts.
Supplementary materials
Teaching Notes are available for educators only.
Subject code
CSS 1: Accounting and Finance.