Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control

Glaser MA, Jirasek M, Windsperger J (2020)
International Journal of the Economics of Business 27(3): 357-375.

Zeitschriftenaufsatz | Veröffentlicht | Englisch
 
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Autor*in
Glaser, Matthias AugustinUniBi ; Jirasek, Michal; Windsperger, Josef
Abstract / Bemerkung
This study provides a new explanation of the ownership structure of franchise firms by highlighting a trade-off between adaptation and control under increasing uncertainty. Franchise chains are formed to reduce transaction costs by combining franchisee outlets as an adaptation mechanism and company-owned outlets as a control mechanism. We argue that under low to moderate uncertainty, franchisors prioritize local responsiveness to profit opportunities by operating a lower proportion of company-owned outlets (PCO); by contrast, under high environmental uncertainty, franchisors prefer more central control through a higher PCO to coordinate interdependent local market outlets better. Hence, the franchisor must find an optimal PCO by balancing the PCO decreasing effect of higher local adaptation with the PCO increasing effect of higher central coordination under increasing uncertainty. Therefore, we posit a U-shaped relationship between the PCO and environmental uncertainty. Data from German and Swiss franchise systems provide support for the study’s hypotheses.
Erscheinungsjahr
2020
Zeitschriftentitel
International Journal of the Economics of Business
Band
27
Ausgabe
3
Seite(n)
357-375
ISSN
1357-1516
eISSN
1466-1829
Page URI
https://pub.uni-bielefeld.de/record/2962542

Zitieren

Glaser MA, Jirasek M, Windsperger J. Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control. International Journal of the Economics of Business. 2020;27(3):357-375.
Glaser, M. A., Jirasek, M., & Windsperger, J. (2020). Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control. International Journal of the Economics of Business, 27(3), 357-375. https://doi.org/10.1080/13571516.2020.1718460
Glaser, M. A., Jirasek, M., and Windsperger, J. (2020). Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control. International Journal of the Economics of Business 27, 357-375.
Glaser, M.A., Jirasek, M., & Windsperger, J., 2020. Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control. International Journal of the Economics of Business, 27(3), p 357-375.
M.A. Glaser, M. Jirasek, and J. Windsperger, “Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control”, International Journal of the Economics of Business, vol. 27, 2020, pp. 357-375.
Glaser, M.A., Jirasek, M., Windsperger, J.: Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control. International Journal of the Economics of Business. 27, 357-375 (2020).
Glaser, Matthias Augustin, Jirasek, Michal, and Windsperger, Josef. “Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control”. International Journal of the Economics of Business 27.3 (2020): 357-375.

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