Toward a model of franchisee entrepreneurship

Dada, Olufunmilola; Watson, Anna; Kirby, David A.

doi:10.1177/0266242610376078

Cited by 54 publications

(123 citation statements)

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“…It is therefore important to understand how franchisors communicate the shift in risk taking to franchisees across different cultures. Secondly, there is an apparent contradiction between the autonomy which may be granted to franchisees versus the standardization which franchise systems are often seen to represent (see Dada, Watson, & Kirby, 2012 for a discussion of the issues). Thus, the rhetoric used in promoting the system to franchisees becomes of particular interest.…”

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confidence: 99%

Entrepreneurial Orientation Rhetoric in Franchise Organizations: The Impact of National Culture

Watson

Dada

Wright

et al. 2017

Entrepreneurship Theory and Practice

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This study examines the role of national culture on the entrepreneurial orientation (EO) rhetoric contained within franchisee recruitment promotional materials, where EO rhetoric is defined as the strategic use of words in organizational narratives to convey the risk taking, innovativeness, proactiveness, autonomy, and competitive aggressiveness of the firm. The sample comprised 378 franchise organizations, in five different countries (Australia, France, India, South Africa, and the UK). The results indicate that franchise systems operating in high uncertainty avoidance and feminine cultures use less entrepreneurially oriented rhetoric, suggesting that EO rhetoric in franchise organizations varies according to different national cultural contexts. Keywords franchising, entrepreneurial orientation, national cultureResearch suggests that there are cross-cultural variations in entrepreneurial entry rates (Autio, Pathak, & Wennberg, 2013) and it seems that this in part stems from differences in national cultural values. It has been contended that entrepreneurship is a response to certain environmental conditions that can help or hinder entrepreneurial success (Lee & Peterson, 2000). Berger (1991, p. 122) comments that ''culture [. . .] serves as the conductor, and the entrepreneur as the catalyst'' to entrepreneurship. Mueller and Thomas (2001, p. 58) argue that values and norms are ''powerful forces in controlling and directing human behavior,'' and thus differences in cultural values may mean that the extent to which entrepreneurial behaviors, such as risk taking and independent thinking, are considered desirable will differ between cultures (Hayton, Gerard, & Zahra, 2002). Therefore, it is suggested that some cultures will be Covin and Miller (2014), empirical research on the relationship between EO and national culture is very limited. This provides a significant research opportunity (Covin & Miller, 2014), which the present study seeks to develop further.This paper examines the role of national culture on the EO rhetoric contained within franchisee recruitment promotional materials. Drawing on Zachary et al. (2011a), we define EO rhetoric as the strategic use of words in organizational narratives to convey the risk taking, innovativeness, proactiveness, autonomy, and competitive aggressiveness of the firm. We argue that cultural differences in EO will lead to differences in the extent to which EO rhetoric is used to attract franchisees. Thus, for example, in cultures where autonomy is more highly valued, franchisors may be more likely to stress the independence offered by franchising in their communications. Similarly, in cultures where risk taking is not valued (or indeed where cultures are risk-averse), franchisors may emphasize the reduced risk offered by being part of an established system. EO has been conceptualized in a number of different ways in the literature (see Covin & Lumpkin, 2011 for a discussion), but these have principally been aligned to one of two key conceptualizations. The first,...

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confidence: 99%

Entrepreneurial Orientation Rhetoric in Franchise Organizations: The Impact of National Culture

Watson

Dada

Wright

et al. 2017

Entrepreneurship Theory and Practice

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“…Therefore, it is clear that future research work should be focused on the more IC intensive sectors with strong growth prospects, such as lawyers, dentists, physiotherapists, orthopedic specialists, and teaching academies and should study further the mechanisms for creating and improving confidence between the parties. In addition, it could also be of interest to study the mechanisms in these sectors for the transmission of knowledge horizontally, or between entrepreneurs (Dada et al 2010), as well as vertically, or between entrepreneurs and customers (Dant 2008).…”

Section: Discussionmentioning

confidence: 99%

“…One of the aspects that has received more interest has been the assistance or support provided by the franchisor to the franchisee (Hossein and Wang 2008). However, most of these studies analyze the existing barriers and methods for the transfer of knowledge from the franchisor to the franchisee, few studies have analyzed the importance of knowledge transfer between franchisees and from franchisees to franchisors (Dada and Watson 2010). Benavides et al (2008) establish three IC characteristics that the franchisee must know: it must be secret between the parties; it must be essential to the development of the core business of the franchise, and should be specific to each franchisor.…”

Section: The Challenge Of Intellectual Capital Transfermentioning

confidence: 99%

“…In this regard, the advantages coming from the efficient transmission of IC between the franchisees themselves can positively affect the brand (Dada et al 2010), giving rise to the image of the chain even being extended due to the reputation of its own workers (Watson and Stanworth 2006). Accordingly, some chains establish expensive mechanisms for transmitting knowledge that link franchisees and thereby enhance their image.…”

Section: The Challenge Of Intellectual Capital Transfermentioning

confidence: 99%

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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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“…Between countries and industries, there may for example be institutional or cultural differences. At the level of franchise systems, there may for example be differences in the geographical dispersion of units (Szulanski and Jensen 2008), in centralization levels (Windsperger 2004;Mumdžiev and Windsperger 2011) or in the use of instruments for knowledge sharing (Dada et al 2012). ENJOY (pseudonym) is a Dutch franchise system that started in the mid-1990s in a specific sub-sector of the fast food industry.…”

Section: Empirical Setting and Samplementioning

confidence: 99%

Entrepreneurial networking: a blessing or a curse? Differential effects for low, medium and high performing franchisees

2017

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Recent studies have called for a better understanding of the link between networking and entrepreneurial performance. We provide such understanding in three ways: by focusing on a specific entrepreneurial context (franchise systems), by developing a multifaceted theoretical framework and by highlighting a contingency that may affect the networkingperformance link. We combine knowledge and learning perspectives with a networking perspective to develop and test a multi-faceted framework on the effects of franchisee networking with peers within a franchise system ('peer networking') on franchisee unit performance. In particular, we argue that the performance benefits that franchisees draw from networking with their peers vary between low, medium and high performing franchisees. We use ordinary least squares (OLS) and Quantile Regression analyses to test our hypotheses with empirical data from a Dutch franchise system. Our results confirm that structural, resource and relational facets of franchisee peer networking affect unit performance, and that they benefit and harm low, medium, and high performing franchisees differently.

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Toward a model of franchisee entrepreneurship

Cited by 54 publications

References 91 publications

Entrepreneurial Orientation Rhetoric in Franchise Organizations: The Impact of National Culture

Entrepreneurial Orientation Rhetoric in Franchise Organizations: The Impact of National Culture

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

Entrepreneurial networking: a blessing or a curse? Differential effects for low, medium and high performing franchisees

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