Reactions to disappointing performance in manufacturer-distributor relationships: The role of escalation and resource commitments

A model is presented of an exchange episode between a manufacturer and a distributor that generates disappointing performance outcomes. The authors suggest that manufacturers commit different types of resources in the initial stages of relationships with distributors, which affect both the distributor's ability and willingness to achieve performance goals. These initial resource commitments affect the commitment of further resources, after the receipt of negative outcomes, both directly (through a mental budgeting process) and indirectly (through the attributions made about the cause of the disappointment). The authors use resource theory, attribution theory, and research on escalation of commitment to structure their conceptual framework and research propositions.