The effect of entrepreneurial orientation on the franchise relationship

Dada, Olufunmilola; Watson, Anna

doi:10.1177/0266242612446035

Cited by 45 publications

(64 citation statements)

References 94 publications

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“…Although the entrepreneurial autonomy of the franchisor is undisputed, studies relating to franchisee entrepreneurial autonomy have been split, complicated and continue to be strongly debated (e.g. Barthélemy ; Bradach ; Dada and Watson , ; Darr et al . ; Davies et al .…”

Section: Introductionmentioning

confidence: 99%

A Model of Entrepreneurial Autonomy in Franchised Outlets: A Systematic Review of the Empirical Evidence

Dada

2016

Int J Management Reviews

101

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Entrepreneurial autonomy among franchisees is a persistent management challenge.There is a lack of empirical synthesis of its drivers, its consequences, and how it can be integrated with the standardization requirements in franchise systems. Various theoretical and empirical studies have stressed that merging franchisee autonomy with the franchisor's desire for uniformity is extremely difficult. This paper aims to provide a systematic review of the relevant empirical studies in order to identify a range of influences, controls, outcomes and associated moderating and mediating factors that offer a better representation of what contributes to the understanding of franchisee entrepreneurial autonomy. By drawing together findings from a broad range of theoretical perspectives, the evidence was used to develop a comprehensive model of entrepreneurial autonomy in franchised outlets. The model not only provides a structure that brings together prior studies, but also identifies the less researched areas that can advance the management literature on the notion of autonomy in franchising. The research and practitioner implications of the review and its limitations and possible directions for future studies are discussed.

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Section: Introductionmentioning

confidence: 99%

A Model of Entrepreneurial Autonomy in Franchised Outlets: A Systematic Review of the Empirical Evidence

Dada

2016

Int J Management Reviews

101

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“…For example, in hostelry and retailing, where there is standardization of processes, services, and structural and relational capital, in many cases with suppliers, it is very evident that the IC is basically in the hands of the principal (Dada and Watson 2012;Croonen and Brand 2013). In addition, in those sectors where the differential IC of both parties is usually stable over time, it is the principal who develops the most innovations in the facilities and contributes to a greater extent to increasing the perceived value of the outlet.…”

Section: Franchisee Intellectual Capital Outlet Perceived Valuementioning

confidence: 99%

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

Sanfelix¹,

Puig²

2018

cuadernosgestion

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Agency theory has been widely used in the franchising literature. This theory analyzes the contract relationships between the principal and agent and has been mostly applied to franchising in traditional sectors (e.g., restaurants, retailing, or travel agencies) where the processes and procedures can be easily standardized. Recently, there has been a spectacular development of high-intensity knowledge sectors, especially in the health sector (dentists, opticians, physiotherapists etc.), where many companies choose franchising to expand the network and improve the survival rates of franchisees, although this strategy goes against the traditional view of the agency theory. In this work, we propose to study this “new agency problem”, using the franchising business model as our research field. The know-how in high-knowledge-intensive sectors is difficult to codify and transfer, and it opens new possibilities for resource-based and intellectual capital perspectives to explain how knowledge assets are built into contracts in franchisor-franchisee relationships. Using resource-based theory and an intellectual capital perspective, we develop propositions on how to handle the knowledge transfer more efficiently. From this point of view, we propose an interorganizational dynamic contract to provide a more efficient knowledge transfer, thereby contributing to the success of the franchise networks as well as reducing the failure rates of franchisees’ outlets.

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“…Recently, human resource (HR) operational autonomy was added as a research avenue to the EO-performance link in franchise systems (Grünhagen et al, 2014), as well as franchisor resources, EO and performance in a coupleowned franchise outlet (Chien, 2014). Although some research has been conducted on EO and the franchise system (Lindsay & McStay, 2004;Maritz & Nieman, 2006), specifically measuring the EO of franchisors (Dada & Watson, 2012Grünhagen et al, 2014), limited research is available regarding EO of franchisees. In this paper we answer the call for research regarding all five EO dimensions, measured on franchisees.…”

Section: Determining the Entrepreneurial Orientation (Eo) Of Franchiseesmentioning

confidence: 99%

“…According to the authors, franchisees with high levels of EO are thus likely to be more productive, which can lead to a more profitable franchise system. Many scholars focus their efforts on the EO of franchisees (Kauffman & Dant, 1998;Dada & Watson, 2012;Dada & Watson, 2010;Grünhagen, Wollan, Dada & Watson, 2014;Ketchen, Short & Combs, 2011). However, earlier work on EO focused only on one or two of the EO dimensions (Lumpkin & Dess, 1996: 429;Dada & Watson, 2010Hughes & Morgan, 2007: 651) and not on all five dimensions of EO as introduced by Lumpkin and Dess (1996).…”

Section: Introductionmentioning

confidence: 99%

“…Dant et al (2011: 254) suggest several important factors when studying franchising, including: diffusion of innovation; knowledgetransfer mechanisms; entrepreneurial orientation; turf issues; interdependencies; and autonomy. For most of the studies conducted on franchise systems only three of the five EO dimensions were measured, namely innovation, risk-taking, and pro-activeness (Maritz & Nieman 2006;Bolton & Thompson, 2003;Dada & Watson, 2012Grünhagen et al, 2014;Chien, 2014). However, Wiklund and Shepherd (2005: 75) suggest that EO comprises five dimensions namely, innovation, risk-taking, pro-activeness, competitive aggression, and autonomy.…”

Section: Introductionmentioning

confidence: 99%

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Investigating the effect of location, specifically shopping centres, on franchisees’ entrepreneurial orientation: A cluster analysis

Botha

Prawlall

2017

SAJBM

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Franchisees play an important role in franchise systems, as they are responsible for managing their business and ensuring its overall performance. Since earlier research confirmed the relationship between entrepreneurial orientation (EO) and performance, this study explores the effect of location on the five dimensions of EO for franchisees. This study assessed franchisees, their risk taking, innovation, pro-activeness, competitive aggression and autonomy, and investigated location clusters related to this. Location was investigated from a geographical and operational stance. A face-to-face survey was conducted among 104 franchisees operating in four major cities in the retail sector in South Africa. Two clusters were identified: 'operating inside of shopping centres' (50%) and 'operating outside of shopping centres' (50%). Contradictory to what was found in the literature, the results indicate that a franchisee is likely to be more entrepreneurially orientated when operating outside of a shopping mall in the Johannesburg region. The strongest and weakest EO dimensions in terms of cluster construction were identified. Furthermore we found that, since the EO dimensions are highly correlated, it is likely that a franchisee will experience high levels of all of the dimensions simultaneously and therefore share in the positively associated benefits of EO, such as growth and performance.

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The effect of entrepreneurial orientation on the franchise relationship

Cited by 45 publications

References 94 publications

A Model of Entrepreneurial Autonomy in Franchised Outlets: A Systematic Review of the Empirical Evidence

A Model of Entrepreneurial Autonomy in Franchised Outlets: A Systematic Review of the Empirical Evidence

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

Investigating the effect of location, specifically shopping centres, on franchisees’ entrepreneurial orientation: A cluster analysis

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