Digitization of interorganizational relationships: direct effects of benefit magnitude and indirect effects of benefit asymmetry on reseller profit

Purpose: The purpose of this study is to examine the effects of relationship digitization benefits on reseller profit. The authors hypothesized two pathways by which the digitization benefits improve reseller profitability: direct and indirect. The direct pathway is via enhancing the reseller’s digital resources and capabilities and the indirect pathway is by improving the relationship with a focal manufacturer by reducing inequity and enhancing interorganizational trust. Design/methodology/approach: The authors use the survey methodology to attempt to understand the interorganizational dynamics of digitization. The authors survey more than 200 resellers in the computer and computer components industry. Findings: Overall, the pattern of results generally supports the framework for direct and indirect effects of digitization benefits on the bottom line of the reseller, as well as the idea of examining the benefits structure components of benefit magnitude and benefit asymmetry. Sales benefit magnitude improves reseller profit directly, as enhanced digital resources result in a more efficient and effective reseller salesforce. The indirect effects flow through to profitability via inequity and trust. Originality/value: The authors are not aware of any prior research that uses the asymmetry and magnitude framework to approach the digitization phenomenon.