Column 13 · Channels and Governance · Era 3, Competitive Advantage (1980s)
Channel Political Economy
Implementation, process · Major · Cluster V, Interfirm Networks
Description
Stern and Reve proposed the political economy framework, in which channel structure and processes are analyzed as an internal economy and internal polity interacting with an external economic and sociopolitical environment.
Managerial Implications
A channel is both an economy (who does what, who earns what) and a polity (who decides, how conflict is handled), inside an external environment. When redesigning a channel, change the economic and political structures together; new margin arrangements without new decision rights, or the reverse, produce conflict. Analyze the environment too, because regulation and technology reshape channel economics faster than partners adapt.