“The Effect of Influence Strategy Spillovers on Cooperative Behavior in Business Networks” by Professor David A. GRIFFITH
Professor David A. GRIFFITH
Iacocca Chair and Professor of Marketing
Chair of the Department of Marketing
College of Business and Economics
This study examines how the use of two influence strategies, i.e., rewards and punishments, employed by a manufacturer in relation to one dealer affects the cooperative behavior of an observing dealer, and whether this relationship is moderated by the structural properties of the business network (i.e., density of the network and the centrality of the observing firm). The multimethod approach of a survey of auto manufacturer-dealership relationships and an experiment demonstrates that a manufacturer’s use of rewards with referent dealers creates a positive spillover effect on cooperative behavior in observing dealers whereas observation of punishments creates a negative spillover effect on cooperative behavior. Our results also reveal that structural network factors affect the relationship between influence strategies and cooperation: (1) network density was found to magnify the effect that influence strategies had on cooperative behaviors in the dealer network and that (2) the employment of rewards influences the behaviors of those in lower network centrality more than those in high centrality positions, indicating that information on referents does not influence every network member the same way.