Skip to main content
SpringerLink
Log in

Exploring relationship satisfaction between global professional service firms and local clients in emerging markets

  • Article
  • Published:
Journal of International Business Studies Aims and scope Submit manuscript

Abstract

Extending the perspective of agency theory, this study incorporates both professional and local knowledge asymmetry into a model of relationship satisfaction between global professional service firms and their local clients. The model also includes learning orientation and adaptation that are theorized to regulate the impact of knowledge asymmetry on goal incongruence, which ultimately affects relationship satisfaction. China was selected as the setting of the study because it is the largest emerging market, has seen double-digit growth of advertising expenditures for the past two decades, and is home to many multinational advertising agencies that have increasingly pursued local clients as revenue sources. Multiple informants from 177 domestic Chinese firms and their multinational advertising agencies were personally interviewed, and the dyadic data were used to test the model. Results show that both types of knowledge asymmetry lead to goal incongruence, which causes client dissatisfaction. The role of learning orientation varies, as does the role of adaptation, in moderating the impact of knowledge asymmetry on goal incongruence and the impact of goal incongruence on relationship satisfaction. Theoretical and managerial implications of the findings are discussed, along with the limitations of the study and future research directions.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2
Figure 3
Figure 4
Figure 5

Similar content being viewed by others

Notes

  1. A few minor instances in which the back-translation revealed slight differences were resolved through discussions among the two bilingual researchers.

  2. Detailed results of the chi-square difference tests are available upon request from the authors.

  3. Results available upon request from the contact author.

References

  • Aiken, L. S., & West, S. G. 1991. Multiple regression: Testing and interpreting interactions. Thousand Oaks, CA: Sage.

    Google Scholar 

  • Alvesson, M. 2001. Knowledge work: Ambiguity, image and identity. Human Relations, 54 (7): 863–886.

    Article  Google Scholar 

  • Anand, B. N., & Khanna, T. 2000. Do firms learn to create value? The case of alliances. Strategic Management Journal, 21 (3): 295–315.

    Article  Google Scholar 

  • Argyris, C., & Schon, D. A. 1978. Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley.

    Google Scholar 

  • Arnold, D. J., & Quelch, J. A. 1998. New strategies in emerging markets. Sloan Management Review, 40 (1): 7–20.

    Google Scholar 

  • Atuahene-Gima, K. 2005. Resolving the capability-rigidity paradox in new product innovation. Journal of Marketing, 69 (4): 61–83.

    Article  Google Scholar 

  • Bagozzi, R. P., & Yi, Y. 1988. On the evaluation of structural equation models. Journal of the Academy of Marketing Science, 16 (1): 74–94.

    Article  Google Scholar 

  • Baker, W. E., & Sinkula, J. M. 1999. The synergistic effect of market orientation and learning orientation on organizational performance. Journal of the Academy of Marketing Science, 27 (4): 411–427.

    Article  Google Scholar 

  • Baron, R. M., & Kenny, D. A. 1986. The moderator-mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51 (6): 1173–1182.

    Article  Google Scholar 

  • Bergen, M., Dutta, S., & Walker Jr., O. C. 1992. Agency relationships in marketing: A review of the implications and applications of agency and related theories. Journal of Marketing, 56 (3): 1–24.

    Article  Google Scholar 

  • Bleby, M. 2007. Taking China's advertising dragons by the tail. Business Day, 31 October: 13.

  • Bostrom, G.-O. 1995. Successful co-operation in professional services: What characteristics should the customer have? Industrial Marketing Management, 24 (3): 151–165.

    Article  Google Scholar 

  • Brennan, D. R., Turnbull, P. W., & Wilson, D. T. 2003. Dyadic adaptation in business-to-business markets. European Journal of Marketing, 37 (11–12): 1636–1665.

    Article  Google Scholar 

  • Brislin, R. W. 1976. Translation applications and research. New York: Goulder Press.

    Google Scholar 

  • Calantone, R. J., Cavusgil, S. T., & Zhao, Y. 2002. Learning orientation, firm innovation capability, and firm performance. Industrial Marketing Management, 31 (6): 515–524.

    Article  Google Scholar 

  • Cannon-Bowers, J. A., Salas, E., & Converse, S. 1993. Shared mental models in expert team decision making. In N.J. Castellan Jr. (Ed.) Individual and group decision making: Current issues: 221–246. Hillsdale, NJ: Lawrence Erlbaum.

    Google Scholar 

  • Cannon, J. P., Achrol, R. S., & Gundlach, G. T. 2000. Contracts, norms, and plural form governance. Journal of the Academy of Marketing Science, 28 (2): 180–194.

    Article  Google Scholar 

  • Cannon, J. P., & Perreault, W. D. 1999. Buyer–seller relationships in business markets. Journal of Marketing Research, 36 (4): 439–460.

    Article  Google Scholar 

  • Capar, N., & Kotabe, M. 2003. The relationship between international diversification and performance in service firms. Journal of International Business Studies, 34 (4): 345–355.

    Article  Google Scholar 

  • Cheng, Y. C. 2004. Fostering local knowledge and human development in globalization of education. International Journal of Educational Management, 18 (1): 7–24.

    Google Scholar 

  • Cort, K. T., Griffith, D. A., & White, D. S. 2007. An attribution theory approach for understanding the internationalization of professional service firms. International Marketing Review, 24 (1): 9–25.

    Article  Google Scholar 

  • Davis, T. R. V. 2004. Different service firms, different international strategies. Business Horizons, 47 (6): 51–59.

    Article  Google Scholar 

  • De Long, D. W., & Fahey, L. 2000. Diagnosing cultural barriers to knowledge management. Academy of Management Executive, 14 (4): 113–127.

    Google Scholar 

  • Dutta, S., Heide, J. B., & Bergen, M. 1999. Vertical territorial restrictions and public policy: Theories and industry evidence. Journal of Marketing, 63 (4): 121–134.

    Article  Google Scholar 

  • Dwyer, F. R., Schurr, P. H., & Oh, S. 1987. Developing buyer–seller relationships. Journal of Marketing, 51 (2): 11–27.

    Article  Google Scholar 

  • Eisenhardt, K. 1989. Agency theory: An assessment and review. Academy of Management Review, 14 (1): 57–74.

    Google Scholar 

  • Ethiraj, S. K., Kale, P., Krishnan, M. S., & Singh, J. V. 2005. Where do capabilities come from and how do they matter? A study in the software services industry. Strategic Management Journal, 26 (1): 25–45.

    Article  Google Scholar 

  • Etzioni, A. 1988. The moral dimension: Toward a new economics. New York: Free Press.

    Google Scholar 

  • Fornell, C., & Larcker, D. F. 1981. Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18 (1): 39–50.

    Article  Google Scholar 

  • Fornell, C., Johnson, M. D., Anderson, E.W., Cha, J., & Bryant, B.E. 1996. The American customer satisfaction index: Nature, purpose, and findings. Journal of Marketing, 60 (4): 7–18.

    Article  Google Scholar 

  • Galer, G., & van der Heijden, K. 1992. The learning organization: How planners create organizational learning. Marketing Intelligence and Planning, 10 (6): 5–12.

    Article  Google Scholar 

  • Ganesan, S. 1994. Determinants of long-term orientation in buyer–seller relationships. Journal of Marketing, 58 (2): 1–19.

    Article  Google Scholar 

  • Garvin, D. 1993. Building a learning organization. Harvard Business Review, 71 (4): 78–91.

    Google Scholar 

  • Hair, J. F., Black, B., Babin, B., Anderson, R. E., & Tatham, R. L. 2005. Multivariate data analysis, (6th ed.). Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • Hallen, L., Johanson, J., & Seyed-Mohamed, N. 1991. Interfirm adaptation in business relationships. Journal of Marketing, 55 (2): 29–37.

    Article  Google Scholar 

  • Hazel, D. 2007. Spreading wings. Chain Store Age, 83 (5): 84–92.

    Google Scholar 

  • Heide, J. B. 2003. Plural governance in industrial purchasing. Journal of Marketing, 67 (4): 18–29.

    Article  Google Scholar 

  • Hewett, K., Money, R. B., & Sharma, S. (2002). An exploration of the moderating role of buyer corporate culture in industrial buyer–seller relationships. Journal of the Academy of Marketing Science, 30 (3): 229–239.

    Article  Google Scholar 

  • Hitt, M. A., Bierman, L., Uhlenbruck, K., & Shimizu, K. 2006. The importance of resources in the internationalization of professional service firms: The good, the bad and the ugly. Academy of Management Journal, 49 (6): 1137–1157.

    Article  Google Scholar 

  • Homburg, C., & Pflesser, C. 2000. A multiple-layer model of market-oriented organizational culture: Measurement issues and performance outcomes. Journal of Marketing Research, 37 (4): 449–463.

    Article  Google Scholar 

  • Hult, G. T. M., & Ferrell, O. C. 1997. A global learning organization structure and market information processing. Journal of Business Research, 40 (2): 155–166.

    Article  Google Scholar 

  • James, L. R., Demaree, R. G., & Wolf, G. 1984. Estimating within-group interrater reliability with and without response bias. Journal of Applied Psychology, 69 (1): 86–98.

    Google Scholar 

  • Jap, S. D. 1999. Pie-expansion efforts: Collaboration processes in buyer–supplier relationships. Journal of Marketing Research, 36 (4): 461–475.

    Article  Google Scholar 

  • Jap, S. D., & Anderson, E. 2003. Safeguarding interorganizational performance and continuity under ex post opportunism. Management Science, 49 (12): 1684–1701.

    Article  Google Scholar 

  • Jensen, M. C., & Meckling, W. H. 1976. Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3 (4): 305–360.

    Article  Google Scholar 

  • Johnson, J. L., & Sohi, R. S. 2003. The development of interfirm partnering competence: Platforms for learning, learning activities, and consequences of learning. Journal of Business Research, 56 (9): 757–766.

    Article  Google Scholar 

  • Jonsson, P., & Zineldin, M. 2003. Achieving high satisfaction in supplier–dealer working relationships. Supply Chain Management, 8 (3–4): 224–240.

    Article  Google Scholar 

  • Kale, S. H., & Barnes, J. W. 1992. Understanding the domain of cross-national buyer–seller interactions. Journal of International Business Studies, 23 (1): 101–132.

    Article  Google Scholar 

  • Kim, S.-K., & Trimi, S. 2007. IT for KM in the management consulting industry. Journal of Knowledge Management, 11 (3): 145–155.

    Article  Google Scholar 

  • Knight, G. 1999. International services marketing: Review of research, 1980–1998. Journal of Services Marketing, 13 (4–5): 347–360.

    Article  Google Scholar 

  • Kohli, A. K., Jaworski, B. J., & Kumar, A. 1993. MARKOR: A measure of market orientation. Journal of Marketing Research, 30 (4): 467–477.

    Article  Google Scholar 

  • Kotabe, M., Murray, J., & Javalgi, R. 1998. Global sourcing of services and marketing performance: An empirical investigation. Journal of International Marketing, 6 (4): 10–31.

    Google Scholar 

  • Kundu, S. K., & Merchant, H. 2008. Service multinationals: Their past, present, and future. Management International Review, 48 (4): 371–377.

    Article  Google Scholar 

  • Lacity, M. C., & Willcocks, L. P. 1998. An empirical investigation of information technology sourcing practices: Lessons from experience. MIS Quarterly, 22 (3): 363–408.

    Article  Google Scholar 

  • Larson, M. S. 1977. The rise of professionalism: A sociological analysis. Berkeley: University of California Press.

    Google Scholar 

  • Levesque, L. L., Wilson, J. M., & Wholey, D. R. 2001. Cognitive divergence and shared mental models in software development project teams. Journal of Organizational Behavior, 22 (2): 135–144.

    Article  Google Scholar 

  • Levitt, T. 1983. The globalization of markets. Harvard Business Review, 61 (3): 92–102.

    Google Scholar 

  • Li, H., & Atuahene-Gima, K. 2001. Product innovation strategy and the performance of new technology ventures in China. Academy of Management Journal, 44 (6): 1123–1134.

    Article  Google Scholar 

  • Li, T., & Calantone, R. 1998. The impact of market knowledge competence on new product advantage: Conceptualization and empirical examination. Journal of Marketing, 62 (4): 13–29.

    Article  Google Scholar 

  • Liljander, V., & Strandvik, T. 1995. The relation between service quality, satisfaction and intentions. In D. Kunst & J. Lemmink (Eds), Managing Service Quality: 45–63. London: Paul Chapman.

    Google Scholar 

  • Lindsay, V., Chadee, D., Mattsson, J., Johnston, R., & Millett, B. 2003. Relationships, the role of individuals and knowledge flows in the internationalisation of service firms. International Journal of Service Industry Management, 14 (1): 7–35.

    Article  Google Scholar 

  • Lindskold, S. 1978. Trust development, the grit proposal and the effects of conciliatory acts on conflict and cooperation. Psychological Bulletin, 85 (4): 772–793.

    Article  Google Scholar 

  • Lu, J. 2005. Dentsu China's development. Nanfang Dushi Daily, 20 July.

  • Luo, X. 2007. Consumer negative voice and firm-idiosyncratic stock returns. Journal of Marketing, 71 (3): 75–88.

    Article  Google Scholar 

  • Maddox, K. 2006. Agencies chase China boom. BtoB, 91 (6): 1–2.

    Google Scholar 

  • Mahler, J. 1997. Influences of organizational culture on learning in public agencies. Journal of Public Administration Research and Theory, 7 (4): 519–540.

    Article  Google Scholar 

  • McKenzie, R. 2002. CRM poses global pitfalls. Computing Canada, 28 (14): 27.

    Google Scholar 

  • Moorman, C., & Miner, A. S. 1998. Organizational improvisation and organizational memory. Academy of Management Review, 23 (4): 698–723.

    Google Scholar 

  • Noordewier, T. G., John, G., & Nevin, J. R. 1990. Performance outcomes of purchasing arrangements in industrial buyer-vendor relationships. Journal of Marketing, 54 (4): 80–93.

    Article  Google Scholar 

  • Patterson, P. G., & Cicic, M. 1995. A typology of service firms in international markets: An empirical investigation. Journal of International Marketing, 3 (4): 57–84.

    Google Scholar 

  • Podsakoff, P. M., MacKenzie, S. B., & Lee, J. 2003. Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88 (5): 879–903.

    Article  Google Scholar 

  • Pothukuchi, V., Damanpour, F., Choi, J., Chen, C. C., & Park, S. H. 2002. National and organizational culture differences and international joint venture performance. Journal of International Business Studies, 33 (2): 243–265.

    Article  Google Scholar 

  • Prendergast, G., West, D., & Shi, Y. 2006. Advertising budgeting methods and processes in China. Journal of Advertising, 35 (3): 165–176.

    Article  Google Scholar 

  • Ravald, A., & Gronroos, C. 1996. The value concept and relationship marketing. Journal of Marketing, 30 (2): 19–30.

    Google Scholar 

  • Senge, P. M. 1990. The fifth discipline: The art and practice of learning organization. New York: Currency Doubleday.

    Google Scholar 

  • Sharma, A. 1997. Professional as agent: Knowledge asymmetry in agency exchange. Academy of Management Review, 22 (3): 758–798.

    Google Scholar 

  • Sharp, D. J., & Salter, S. B. 1997. Project escalation and sunk costs: A test of the international generalizability of agency and prospect theories. Journal of International Business Studies, 28 (1): 101–121.

    Article  Google Scholar 

  • Sheth, J. N. 1996. Organizational buying behavior: Past performance and future expectations. Journal of Business and Industrial Marketing, 11 (3–4): 7–24.

    Article  Google Scholar 

  • Sinkula, J. M. 1994. Market information processing and organization learning. Journal of Marketing, 58 (1): 35–45.

    Article  Google Scholar 

  • Sinkula, J. M., Baker, W. E., & Noordewier, T. 1997. A framework for market-based organizational learning: Linking values, knowledge, and behavior. Journal of the Academy of Marketing Science, 25 (4): 305–318.

    Article  Google Scholar 

  • Swart, J., & Kinnie, N. 2007. Simultaneity of learning orientations in a marketing agency. Management Learning, 38 (3): 337–358.

    Article  Google Scholar 

  • Szymanski, D. M., Sundar, G. B., & Varadarajan, P. R. 1993. Standardization versus adaptation of international marketing strategy: An empirical investigation. Journal of Marketing, 57 (4): 1–17.

    Article  Google Scholar 

  • Vermillion, L. J., Lassar, W. M., & Winsor, R. D. 2002. The Hunt–Vitell general theory of marketing ethics: Can it enhance our understanding of principal–agent relationships in channels of distribution? Journal of Business Ethics, 41 (3): 267–286.

    Article  Google Scholar 

  • Wageman, J. J. 1999. Burnout among postsecondary faculty in North Dakota, PhD dissertation, University of North Dakota.

  • Wageman, R., & Gordon, F. M. 2005. As the twig is bent: How group values shape emergent task interdependence in groups. Organization Science, 16 (6): 687–702.

    Article  Google Scholar 

  • White, H. 1980. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48 (4): 817–838.

    Article  Google Scholar 

  • Xin Jing Daily. 2004. Opening of the Chinese advertising market with WTO.

  • Zou, S., & Cavusgil, S. T. 2002. The GMS: A broad conceptualization of global marketing strategy and its effect on firm performance. Journal of Marketing, 66 (4): 40–56.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Marketing, City University of Hong Kong, Kowloon, Hong Kong

    Wenyu Dou, Nan Zhou & Chenting Su

  2. Department of Advertising, Public Relations, and Retailing, Michigan State University, USA

    Hairong Li

Authors
  1. Wenyu Dou
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Hairong Li
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Nan Zhou
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Chenting Su
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Wenyu Dou.

Additional information

Accepted by Daniel Bello, Area Editor, 16 July 2009. This paper has been with the authors for three revisions.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Dou, W., Li, H., Zhou, N. et al. Exploring relationship satisfaction between global professional service firms and local clients in emerging markets. J Int Bus Stud 41, 1198–1217 (2010). https://doi.org/10.1057/jibs.2009.78

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/jibs.2009.78

Keywords

Search

Navigation