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Performance Measurement in Car Distribution Chains
Linköping University, Faculty of Arts and Sciences. Linköping University, Department of Management and Economics, Business Administration.
2003 (English)In: EAA European Accounting Association,2003, 2003Conference paper (Refereed)
Abstract [en]

The research reported in this paper focuses on Performance Measurement Systems (Performance Measurement System) in car distribution chains in Sweden, Germany, Spain, Australia and the UK. Slightly more than 100 in-depth interviews were conducted with manufacturers, importers and dealers in order to identify strategic issues in framing a Performance Measurement System. In a pre-study, it was found that car distribution is subject to ambiguous changes and contradictory views. Distribution and retailing are strategic factors that car manufacturers cannot neglect. Car distribution has for a long time been organized through franchised dealer networks. In the last years, this system has been challenged by a number of changes, e.g. the Internet, changed legislation and pressure on distribution costs. Through the emergence of the Internet, the manufacturer controls all communication channels except the dealer. In the traditional system, the customer gains information from the local dealer. Most customers now use the Internet as the primary information channel. As market communication becomes more globalized, it becomes increasingly important for car manufacturers to control dealers. This new environment calls for new ways of managing the dealer network. Manufacturers particularly need to consider systems that make it possible to gear dealers towards manufacturers- goals. The Performance Measurement System is the primary tool for accomplishing this task. Although manufacturers and dealers share the goal of maximizing profit and sales, they have different interests and extensive communication problems have been identified across actors in car distribution chains (Köhler and Meffert, 1998). Goal divergence between manufacturers and dealers gives rise to conflicts. Suitable Management Control and Performance Measurement Systems may improve performance and minimizing conflicts. Rafer et al (1997) argue that the design and implementation of effective incentive programmes help the car manufacturer to establish proper control of the distribution chain. A framework that identifies strategic issues in framing a Performance Measurement System is proposed. The framework takes a number of contingency variables into account: ownership (privately owned or manufacturer-owned), number of brands represented (solus, dual or multi franchising) and geographical area characteristics. To the extent that dealers find the Performance Measurement System fair, it is an indispensable tool for implementing manufacturers- interest of controlling the distribution chain. Without dealers- commitment to the Performance Measurement System, lack of legitimity may hinder the manufacturer from controlling activities carried out in the distribution chain.

Place, publisher, year, edition, pages
National Category
Social Sciences
URN: urn:nbn:se:liu:diva-31633Local ID: 17439OAI: diva2:252456
Available from: 2009-10-09 Created: 2009-10-09

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