Opportunistic Behavior in Industrial Marketing Relationships

Abstract: As humans beings, we act to our advantage. In some cases, this is done to the detriment of others; also known as opportunistic behavior. As past and current industrial marketing relationships have been impaired by opportunism, it is valuable for scholars and practitioners to gain a deeper understanding of opportunistic behavior and how to prevent it. A key driver of opportunistic behavior is information. This informs the purpose of this dissertation, which is to address its research problem: How can information facilitate and constrain opportunistic behavior in industrial marketing relationships?Agency Theory is the first theory used to address this research problem. Agency Theory focuses on governing opportunistic behavior in a principal-agent relationship. The theory has been widely applied in the marketing literature. Therefore, this dissertation’s first research question addresses: How has Agency Theory been used to constrain opportunistic behavior in industrial marketing relationships? To answer this question, an extensive literature review is conducted and future research agendas suggested.However, during the course of this dissertation it was found that Agency Theory is limited when applied to relationships where the agent is a professional. Most industrial marketing relationships comprise professional agents. Furthermore, both principals and professional agents can act opportunistically ex-ante (i.e., pre-contract) and ex-post (i.e., post-contract) at the same time. Therefore, the second research question asks: What role does information play in manifesting ex-ante and ex-post opportunistic behavior in principal and professional-agent industrial marketing relationships? This research question is answered in a purely conceptual manner, through the introduction of a new model.The remaining two papers follow a constructivist, qualitative research design. A context was needed to gain an empirical understanding on opportunism in industrial marketing relationships. The context chosen for this dissertation is the client-advertising agency relationship. The third research question therefore asks: How do clients and advertising agencies act opportunistically ex-ante and ex-post? To answer this research question, representatives from advertising agencies and clients were interviewed.Given the clear need to constrain client-advertising agency opportunism, the fourth research question asks: What role does information play in the choice of constraint mechanism for the client-advertising agency relationship? To do this, the Theory of Relationship Constraints was extended to the client-advertising agency relationship context. The theory focuses on choosing the appropriate constraint mechanism to curb opportunistic behavior. Broadly, this dissertation primarily contributes to the body of knowledge by offering a better understanding on how opportunism can manifest and be constrained in today’s industrial marketing context.The remainder of the dissertation is laid out as follows. First, the research area is introduced. Second, the key literature and theoretical perspectives are discussed. Third, the methodology employed is explained. Fourth, the findings are disclosed. Last, the theoretical contributions, managerial implications, limitations and future research agendas are presented and followed by a conclusion. The four papers that comprise this dissertation are then included. Three of these papers are published/accepted; the final paper is a working paper.