How Does the Franchisor's Choice of Different Control Mechanisms Affect Franchisees’ and Employee-Managers’ Satisfaction?

Abstract

The Open University's repository of research publications and other research outputs How does the franchisor's choice of different control mechanisms affect franchisees' and employee-managers' satisfaction? Journal Item How to cite: Mellewigt, Thomas; Ehrmann, Thomas and Decker, Carolin (2011). How does the franchisor's choice of different control mechanisms affect franchisees' and employee-managers' satisfaction? Journal of Retailing, 3 pp. 320-331. For guidance on citations see FAQs.

New challenges in franchisor-franchisee relationship. An analysis from agency theory perspective

“…These aspects include the origin of the relationship between organizations (Caves and Murphy 1976;Gillis and Castrogiovanni 2012), with regard to coordination mechanisms for compensation and financing (Sen 1993;Wimmer and Garen 1997;Vázquez 2005; Gonzalez-Diaz and Solis-Rodriguez 2012), the duration and optimization of the agency contract (Shane 1998;Vázquez 2007), the control mechanisms on performance (El Akremi 2010; Mellewigt et al 2011), the risks in the relationship (Lafontaine 1992; Michael and Combs 2008), and the propensity to franchise by franchisors (Lafontaine 1992;Barthélemy 2011;Seawright et al 2013). In general, the literature concludes that to overcome the AP in a franchise outlet, it is important to identify these risks at an early stage, even before the business commences.…”

Performance in Franchise Systems : The Franchisee Perspective

“…Franchising research in recent years has been focused more on franchisors than on franchisees in the literature (Combs et al, 2011a). In a franchise agreement as an inter-firm relationship, the franchisee's performance will affect the franchisor's performance, and franchise systems do not succeed if the franchisees do not succeed (Mellewigt et al, 2011).…”

Control mechanisms and goal orientations: evidence from frontline service employees

“…As such, marketing control mechanisms aimed at employees should ultimately contribute to organizational performance (see Atuahene-Gima and Li, 2006;Hartline et al, 2000;Piercy et al, 2004). In fact, control mechanisms have been related with a number of employee responses positive for organizational outcomes (e.g., Atuahene-Gima and Li, 2006;Mellewigt et al, 2011;Piercy et al, 2004). Jaworski (1988) identifies two basic forms of control, namely formal and informal control mechanisms.…”

“…Accordingly, employees' compensation relies on a fixed salary to a greater extent (Piercy et al, 2012). As to output control, it refers to the specification of outputs sought by the organization, with the employees being responsible for their achievement (Mellewigt et al, 2011). Accordingly, rewards are contingent on reaching output standards (Rijsdijk and Ende, 2011), with compensation relying to a greater extent on incentives (Cravens et al, 1993;Piercy et al, 2012).…”

“…In a different vein, a control system concerns "an organization's set of procedures for monitoring, directing, evaluating, and compensating its employees" (Anderson and Oliver, 1987, p. 76). As such, control mechanisms are an important managerial tool for influencing employees' attitudes and behaviors (e.g., Jaworski and MacInnis, 1989;Mellewigt et al, 2011). In particular, control mechanisms provide employees with a number of cues on the appropriate behavior (and the resulting rewards) for approaching their organizational tasks (Joshi and Randall, 2001) and, thus, are likely to influence an individual's goal orientations (see DeShon and Gillespie, 2005).…”