A Study on the Bright Side and the Dark Side of Channel Relationships across Furniture Small-Medium-Enterprises: Which One Dominate Most?

Abstract

Studies within Indonesian furniture industry revealed collaboration between small-medium (SME) manufacturers and their working partners may be of primary concern. Notwithstanding, several researches find such collaboration delivers bright and dark side of channel relationships and this needs further investigation. This study fills the void by integrating variables under social capital theory and transaction-cost-economies to uncover the influences of both sides. Based on a survey of 200 SME furniture manufacturers across Jepara, a central part of Indonesian furniture industry, this study finds relationship-specificinvestments (RSIs) and opportunism as representatives of the dark side of channel relationships, play a more active role than the bright side represented by collaboration and agility constructs. In addition, RSIs perform two-sided functions in influencing relationship performance between the manufacturers and their connecting retailers. The results of this study provide new theoretical and managerial insights into the role of the elements of the bright and the dark side of channel relationships.