Supplier fairness as a mediating factor in the supplier performance–reseller satisfaction relationship Cengiz Yilmaz*, Bulent Sezen, Ebru Tumer Kabadayı Gebze Institute of Technology, Isletme Fakultesi, Cayirova Fabrikalar Yolu No. 101, 41400 Gebze, Kocaeli, Turkey Abstract The study examines the role of reseller perceptions of supplier fairness in the relationships between reseller evaluations of supplier role performance components and reseller satisfaction. Specifically, reseller perceptions of supplier distributive fairness and procedural fairness are posited as key factors, mediating the effects of reseller assessments of supplier delivery performance, operational support, boundary personnel performance, and financial and sales performance on reseller satisfaction. Results of nested model comparisons using data collected from resellers in Turkey support the hypothesized mediating role of fairness perceptions. Specific relationships between supplier performance components and fairness perceptions, as well as the effects of both fairness types on reseller satisfaction, are discussed. D 2002 Elsevier Inc. All rights reserved. Keywords: Supplier fairness; Supplier performance; Reseller satisfaction 1. Introduction For many supplier firms, establishing and maintaining a network of satisfied resellers is crucial to the long-run viability of their channel systems (Dwyer, 1980; Geyskens et al., 1999). A high level of satisfaction promotes a cooperative orientation in marketing channel relationships and manifests itself in such desirable attitudinal and behav- ioral channel partner responses as increased relationship commitment (e.g., Anderson, 1994), voluntary restraints in opportunistic behaviors (e.g., Brown et al., 2000), and avoidance from dysfunctional conflict (e.g., Lusch, 1977). In view of this, supplier firms in many industries are looking for ways to increase the satisfaction levels of the resellers in their channel systems. One approach supplier firms can take is to focus on the components of their channel role performance as the primary determinants of reseller satisfaction (e.g., Anderson and Narus, 1984). In this view, a supplier seeking to increase the satisfaction levels of resellers should, first of all, improve its performances in several aspects of its channel role, most notably in terms of product quality, operational support, service quality, delivery performance, financial returns gen- erated for the reseller, and contributions to reseller sales and market share (Cannon and Perreault, 1999). Consider, how- ever, a supplier that has very little room for the improvement of performance outcomes because its decisions and actions on such factors are constrained by resource limitations or other uncontrollable factors. The role performance approach provides this supplier with little guidance in terms of managing the satisfaction levels of its resellers. More important, it is not uncommon that some substantial amount of variability may be observed across the satisfaction levels of the resellers of even a ‘‘truly high-performing’’ supplier. Again, the role performance view offers very little as to why some resellers are still dissatisfied. Alternatively, recent developments in channels theory highlight reseller perceptions of supplier fairness as an important factor in resellers’ thought processes as they assess their suppliers and develop (dis)satisfaction (e.g., Kumar et al., 1995). If a supplier’s resellers perceive that rewards are allocated in an equitable manner and such allocation decisions are made according to fair methods, guidelines, and processes, satisfaction is deemed more likely to prevail. Suppliers are therefore urged to take steps to enhance perceptions of fairness as an alternative route to reseller satisfaction, focusing specifically on the principles of equity in reward distribution and transparency and openness in relationships with resellers (e.g., Frazier, 1983a). Nonetheless, very little is known about (1) the 0148-2963/$ – see front matter D 2002 Elsevier Inc. All rights reserved. doi:10.1016/S0148-2963(02)00485-X * Corresponding author. Tel.: +90-262-653-8497x1470; fax: +90-262- 653-8521. E-mail address: yilmazcengiz@penta.gyte.edu.tr (C. Yilmaz). Journal of Business Research 57 (2004) 854 – 863