Who Gets Punished Most For Challenging The Status Quo?

Ody-Brasier, A and Vermeulen, F (2019) Who Gets Punished Most For Challenging The Status Quo? Academy of Management Journal. ISSN 0001-4273 (In Press)

Abstract

Over time, markets evolve into particular structures, with clearly defined roles in terms of who does what in the industry. When a firm ventures beyond these established roles, it often gets punished by its exchange partners. Our interviews in the market for Champagne grapes, however, suggest that some buyers get penalized substantially more than others in response to such actions. Quantitative analysis confirms that nontraditional buyers receive price penalties for role deviations—through diversification, vertical integration, or dis-integration—whereas traditional firms are treated much more leniently. We conducted a subsequent interpretivist study, using interview data from 78 market participants, to explore the exact mechanisms underlying this effect. The analysis reveals that sellers blame less traditional buyers when they cross the boundaries of their usual roles, because they are thought to act out of volition and bad faith, whereas they believe that the same transgressions by more traditional firms must have been necessitated by external circumstances. We conclude that the sanctioning behavior of actors in response to role transgressions by their exchange partners is driven by their interpretation of the motives underlying these transgressions, rather than by the actions themselves. As a result, nontraditional firms may also find it difficult to deviate from the traditional roles in their industry.

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Item Type: Article
Subject Areas: Strategy and Entrepreneurship
Additional Information:

(c) 2019 Academy of Management

Subjects: S > Selling
B > Bulk buying
Date Deposited: 23 Oct 2019 10:01
Last Modified: 23 Dec 2019 14:48
URI: http://lbsresearch.london.edu/id/eprint/1256
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