Transaction governance in multinational companies’ distribution networks in a developing country: multiple case studies of Vietnam’s motorcycle industry

抄録

This study examines transaction governance within distribution networks of multinational companies（MNCs） in a developing country by using multiple case studies of Vietnam’s motorcycle industry. We found that issues associated with the local context, such as counterfeit problems and the existence of unauthorized sub-dealers, affect transaction governance. Under these issues, contractual governance, coercive power, and mitigating methods are common in the MNC-dealer relationship. Specifically, strict monitoring and coercion, based on contract stipulations, maintain product and service quality and ensure brand protection. Mitigating methods, including improvement of brand power, relationship-specific investments, and communication, are used to balance power asymmetry and induce collaborations. Consequently, MNCs successfully train dealers on quality management in distribution, which in turn, affect dealer and sub-dealer transaction governance. In other words, indirect governance is used to strengthen quality management in unofficial channels that MNCs cannot control. Despite this success, false reporting and dissatisfaction of some dealers implies that there are trade-offs inherent in these governance methods. Adjusting the intensity of use of each governance method to balance the trade-offs is important. For MNCs that are the target of counterfeiting, it is necessary to consider increasing rewards in ranking systems, investments, and communication when using strict channel management. This paper furthers the understanding of transaction governance in MNCs’distribution networks in a developing country.