Whistleblowing intensity and distributor compliance in marketing channel networks

Purpose This paper aims to examine how channel whistleblowing intensity affects a distributor’s compliance to the manufacturer’s request and how that impact is influenced by institutional environments. Design/methodology/approach Based on paired survey data, which was collected from an automobile manufacturer in China and its 211 distributors, combined with secondary data, this study used hierarchical regression analyses to test the hypotheses. Findings The study finds that channel whistleblowing intensity has an inverted U-shaped effect on distributor compliance. In addition, this curvilinear effect is stronger in regions with more effective legal systems and higher social trust, but the authors do not find perceived vertical control moderating the effect of whistleblowing intensity on distributor compliance. Research limitations/implications First, this study enriches the marketing literature by highlighting the significance of whistleblowing and especially its downside in marketing channel management. Second, moving beyond prior marketing studies’ focus on bilateral controls, it recognizes channel whistleblowing as a peer-enforced control mechanism. Third, it identifies environmental factors as shift parameters that alter the impact of channel whistleblowing, attesting to the importance of “discriminating alignment.” Practical implications The findings caution channel managers against the double-edged effects of whistleblowing and inform the conditions that amplify this impact. Originality/value This work highlights the bright and dark sides of channel whistleblowing and uncovers situations in which it works or fails to promote distributor compliance.