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Opportunistic Behavior in Industrial Marketing Relationships
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Business Administration and Industrial Engineering.
2020 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

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. 

Place, publisher, year, edition, pages
Luleå: Luleå University of Technology, 2020. , p. 160
Series
Doctoral thesis / Luleå University of Technology 1 jan 1997 → …, ISSN 1402-1544
Keywords [en]
Opportunistic behavior, moral hazard, adverse selection, principal-agent, Agency Theory, professional agent, Theory of Relationship Constraints, client-advertising agency relationship, ex-ante, ex-post, formal constraint mechanisms, social constraint mechanisms
National Category
Business Administration Business Administration
Research subject
Industrial Marketing
Identifiers
URN: urn:nbn:se:ltu:diva-78015ISBN: 978-91-7790-552-3 (print)ISBN: 978-91-7790-553-0 (electronic)OAI: oai:DiVA.org:ltu-78015DiVA, id: diva2:1413227
Public defence
2020-04-22, A117, Luleå, 15:00 (English)
Opponent
Supervisors
Available from: 2020-03-10 Created: 2020-03-09 Last updated: 2020-04-24Bibliographically approved
List of papers
1. Perspectives: client–agency opportunism: how does it happen and what can we do about it?
Open this publication in new window or tab >>Perspectives: client–agency opportunism: how does it happen and what can we do about it?
2019 (English)In: International Journal of Advertising, ISSN 0265-0487, E-ISSN 1759-3948, Vol. 38, no 8, p. 1303-1312Article in journal (Refereed) Published
Abstract [en]

While it is seldom spoken about openly, opportunism always prevails in client–agency relationships and could lead to their demise. This study directs attention to client–agency opportunism by describing how it happens and ends with a discussion on how today’s client–agency dynamics can be improved.

Place, publisher, year, edition, pages
Taylor & Francis, 2019
Keywords
client-agency relationships, opportunistic behavior, adverse selection, moral hazard
National Category
Business Administration
Research subject
Industrial Marketing
Identifiers
urn:nbn:se:ltu:diva-76288 (URN)10.1080/02650487.2019.1670531 (DOI)000488177500001 ()
Note

Validerad;2019;Nivå 2;2019-12-06 (johcin)

Available from: 2019-10-08 Created: 2019-10-08 Last updated: 2020-03-09Bibliographically approved
2. Agency Theory in Marketing: 27 Years On
Open this publication in new window or tab >>Agency Theory in Marketing: 27 Years On
(English)In: Article in journal (Refereed) Accepted
Abstract [en]

Twenty-seven years have elapsed since Bergen, Dutta, and Walker Jr. (1992) published their work on agency theory in marketing. Agency theory is still relevant in marketing today. However, since 1992, there has been no comprehensive update of the literature on agency theory in marketing-related contexts despite the various developments in marketing, such as the advent of the internet, that have occurred in the interim. This paper covers the application of agency theory to marketing-related topics between 1992 and 2018 and seeks to update the overall knowledge of this application, suggesting new areas of research and managerial implications.

Keywords
agency theory, information asymmetry, opportunistic behavior, constraint mechanisms, marketing
National Category
Business Administration
Research subject
Industrial Marketing
Identifiers
urn:nbn:se:ltu:diva-77838 (URN)
Available from: 2020-02-24 Created: 2020-02-24 Last updated: 2020-05-13
3. Ex-Ante and Ex-Post Opportunism in Principal-Professional Marketing Relationships: A conceptual perspective and research propositions
Open this publication in new window or tab >>Ex-Ante and Ex-Post Opportunism in Principal-Professional Marketing Relationships: A conceptual perspective and research propositions
(English)In: Journal of Strategic MarketingArticle in journal (Refereed) Accepted
Abstract [en]

Opportunism has been widely studied to understand and predict the mechanisms behind it. While the phenomenon has been traditionally studied in principal-agent relationships, scant attention is given to relationships where the agent is a professional. Opportunistic behavior in principal-professional relationships manifests differently compared to principal-agent relationships. I introduce a model with nine propositions to enhance the current understanding of what constitutes opportunistic behavior in principal-professional relationships. My model suggests that both principals and professionals act opportunistically. I propose that ex-ante adverse selection derives from the principal’s hidden characteristics, and ex-post moral hazard derives from the professional’s hidden tacit knowledge. The model applies to professional exchanges that are defined by a competitive bidding environment, knowledge of the co-production environment, and fixed-incentives. I contribute theoretically by building on past theories to propose new conceptual perspectives, and practically by encouraging a better understanding of what constitutes opportunistic behavior in principal-professional marketing exchanges.

Place, publisher, year, edition, pages
Taylor & Francis
Keywords
opportunistic behavior; principal-professional; ex-ante; ex-post; principal opportunism
National Category
Business Administration
Research subject
Industrial Marketing
Identifiers
urn:nbn:se:ltu:diva-77839 (URN)
Available from: 2020-02-24 Created: 2020-02-24 Last updated: 2020-03-09

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