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Question

'The manufacturer threatens to withdraw a resource or terminate a relationship if intermediaries fail to cooperate', refers to which one of the following channel power?

This question was previously asked in
UGC NET 2016 Paper 2 Management Question Paper (22-Jan-2017)
The correct answer is

Coercive power

Concept: French and Raven's bases of channel power distinguish influence by its source - reward, coercion, legitimacy, expertise or reference - and the wording of the situation reveals which base is at work.

Channel power is the ability of one channel member to influence another. Here the manufacturer influences intermediaries by threatening to withdraw a resource or end the relationship if they do not cooperate - that is, by holding out a penalty. Influence based on the threat of punishment is coercive power.

Example: A car maker warning a dealer that it will cut supplies or cancel the dealership unless targets are met is exercising coercive power.

Reward power works through positive incentives, not threats; legitimate power rests on a contractual or hierarchical right to direct; and referent power flows from the intermediary's desire to be identified with a respected manufacturer. Because the cue here is a threat of withdrawal or termination rather than an incentive, right or identification, those three are eliminated.

Hence it refers to coercive power.

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