Abstract
The research question for this study is how does the environment affect the internal working and outcomes of marketing channel relationships in a developing country using Saudi Arabia as a case study? Viewing the environment as a stock of resources diverts attention to environmental munificence and the channel member's responses to pressure generated for the lack or availability of such critical resources.
Applying the resource dependence perspective to the political economy framework, this study argues that in the Saudi Arabian food channel system that is characterized by unbalanced distribution of power skewed in favor of the supplier, the retailer access to a relatively munificent output market will mitigate the supplier's power advantage that otherwise would be used to bureaucratize the channel, endanger the quality of the exchange relationship, and consequently the efficiency of the channel.
The authors use a structural equation model to analyze data from the food channel in Saudi Arabia utilizing a survey method and a personal interview technique. The results indicate that environmental munificence affect the internal working and outcomes of marketing.