Revisiting the causes of organizational discontinuance: A diffusion theory approach offers new insights

Madhavan Parthasarathy, David Forlani

Abstract


The purpose of this research was to develop a framework capable of classifying the reasons behind the discontinuance of supplier-distributor relationships.  Using a sample of CEO’s who manage intra-national and multi-national firms, a study was run to test a typology of discontinuance built around diffusion theory’s source of influence construct (e.g., the origin and valence of the information that initiates a discontinuance decision).  The three types are called New Day, Strike 3 and Greener Grass.  Results support the proposed typology and suggest that managers indeed terminate relationships with partner firms for three aforementioned theoretically-grounded and practitioner-relevant reasons. Managers can use the framework to better understand their past and current relationships, as well as a tool for engineering future relationships.  Finding a tendency toward one discontinuance type can help managers identify issues or weaknesses that if addressed, could improve the quality and longevity of such relationships.


Keywords


Organizational discontinuance · Channel relationships · Diffusion theory

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Since 2012, vol 5(1), this work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.