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Client opportunism in agency-client relationship: the role of information asymmetry, agency response and calculative commitment

Kambalor Ramakrishna Jayasimha (Department of Marketing, Indian Institute of Management, Indore, India)

Journal of Business & Industrial Marketing

ISSN: 0885-8624

Article publication date: 4 June 2021

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Abstract

Purpose

The focus is on how agencies can mitigate client opportunism in an agency-client relationship (ACR), particularly during the agency selection stage involving a pitch. This paper aims to empirically investigate the moderating effects of organizational mechanisms (particularly informational cues) and the agency’s past behavior on client opportunism. In a moderated moderation, this paper tests the effects of calculative commitment, informational cue and agency’s past behavior on the main effect.

Design/methodology/approach

The research is in the context of ACR involving a pitch at the agency selection stage. A mixed-method approach is used. In depth interviews with senior level executives were used to design the experimental vignettes. The main study uses experimental vignettes in a survey.

Findings

The study finds the prevalence of client opportunism during the pitch. The study reveals a significant relationship between information asymmetry and client opportunism. The findings of the study support the effectiveness of organizational mechanisms in mitigating client opportunism. The findings indicate that a proactive approach such as using informational cues mitigates client opportunism as it signals to the client that the agency cares for its intellectual property. Clients also take a cue from agencies past behavior. Third-party complaints and voice complaint deters client opportunism. Moderated moderation reveals that the client’s calculative commitment impacts client opportunism.

Originality/value

The study is novel in empirically examining client opportunism during the agency selection stage involving a pitch. The study re-emphasizes that information asymmetry is the primary reason for client opportunism in ACR at the agency selection stage. The role of organizational mechanism and agency response in mitigating client opportunism is a welcome addition. Moderated moderation effects involving calculative commitment is a novel addition.

Keywords

Acknowledgements

The author acknowledges the contributions of Rajendra Nargundkar, Himanshu Srivastava and Krishnan Iyer in conducting this study. The author would like to thank the editor and the reviewers for their insightful comments.

Citation

Jayasimha, K.R. (2021), "Client opportunism in agency-client relationship: the role of information asymmetry, agency response and calculative commitment", Journal of Business & Industrial Marketing, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JBIM-07-2020-0354

Publisher

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Emerald Publishing Limited

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