New Developments in the Theory of Networks - Franchising, Alliances and Cooperatives

New Developments in the Theory of Networks

Contents

Contributors

New Developments in the Theory of Networks: Introduction

1 Franchising

1.1 Contract Design and Decision Rights

1.2 Incentives and Ownership Strategy

1.3 Strategy, Competition and Internationalization of Franchise Firms

1.4 Entrepreneurship and Franchising

1.5 Franchising and Regulation

2 Alliances

2.1 Value Creation in Network Relationships

2.2 Organization of Innovation Through Alliances

2.3 Knowledge Management in Networks

3 Cooperatives

3.1 Behavioral Logics and Governance of Cooperatives

References

Part A: Franchising

Contract Design and Decision Rights

Incentives and Ownership Strategy

Strategy, Competition and Internationalization of Franchise Firms

Entrepreneurship and Franchising

Franchising and Regulation

Determinants of Contractual Completeness in Franchising

1 Introduction

2 Contractual Completeness

2.1 Contractual Completeness and Decision Rights

2.2 Relationship Between Completeness and Complexity

3 Determinants of Contractual Completeness in Franchising

3.1 Transaction Cost Theory

3.1.1 Environmental Uncertainty

3.1.2 Transaction-Specific Investments

3.2 Agency Theory

3.3 Property Rights Theory

3.4 The Relational View of Governance

3.5 Organizational Capability View

4 Empirical Analysis

4.1 Sample and Data Collection

4.2 Measurement

4.3 Results

4.4 Discussion and Conclusion

Appendix: Measures of Variables

References

Delegation and Autonomy in Franchising

1 Introduction

2 Control Versus Autonomy in Franchise Relationships

2.1 Autonomy and Free-Riding Hazards

2.2 Relational Governance and Autonomy

2.3 Knowledge Assets and Autonomy

3 Data and Procedures

3.1 Dependent Variable

3.2 Independent Variables

4 Methods and Results

5 Conclusions

References

Allocation of Decision Rights in International Franchise Firms: The Case of Master and Direct Franchising

1 Introduction

2 Organization of International Franchise Firms

2.1 Decision Rights

3 Theoretical Views on the Allocation of Decision Rights

3.1 Property Rights Theory and Allocation of Decision Rights

3.2 Agency Theory and Allocation of Decision Rights

3.3 Transaction Cost Theory and Allocation of Decision Rights

4 Conclusion

References

Incentives and Control in Company-Owned Versus Franchised Outlets: An Empirical Study at the Chain Level

1 Introduction

2 The Efficiency of the Plural Form

2.1 Franchised Units: An Efficient Form?

2.2 Company-Owned Units: The Efficiency of a Hierarchical Form

2.3 The Strange Form: Multi-Unit Franchises

3 The Net Case Study

3.1 NET: A Plural Form in a Reform Context

3.2 Net: A Contrasted Plural Form

4 Econometric Analysis

4.1 Explained Variables

4.2 Explanatory Variables

4.2.1 Organizational Choices

4.2.2 Unit´s Characteristics

4.3 Organizational Choices and Performances: Econometric Results

5 Conclusion

References

Plural Form and Franchisor Performance: Early Empirical Findings from Europe

1 Introduction

2 Literature Review

2.1 Plural Form

2.2 Agency Theory

2.3 Resource Scarcity Theory

2.4 Risk-Based Explanation of Plural Form

2.5 A Critical´´ Asset View of Plural Form

3 Hypotheses

3.1 Plural Form and Critical Assets

3.2 Plural Form and Life Cycle Stage

4 Method

4.1 Data

4.2 Measurement Scales

5 Results

6 Discussion and Conclusion

6.1 Theoretical Contributions

6.2 Managerial Implications

6.3 Limitations and Opportunities for Further Research

References

Inner Strength Against Competitive Forces: Successful Site Selection for Franchise Network Expansion

1 Introduction

2 Theoretical Framework

3 Hypotheses

3.1 Market Perspective Criteria

3.2 Inner Strength Perspective Criteria

4 Data, Methods and Variables

4.1 Sample

4.2 Variables

4.2.1 Dependent Variables

4.2.2 Independent and Control Variables

4.3 Methods

5 Results

6 Discussion

References

Market Saturation or Market Concentration: Evidence on Competition Among U.S. Limited Service Franchise Brands

1 Introduction

2 Restaurant Competition, Concentration, and Franchising

3 Structural Changes in the Limited-Service Restaurant Industry

3.1 Establishment and Firm Level Data from the Economic Censuses of 1997 and 2002

3.2 Concentration of Sales in Franchise Systems, 1997 and 2002

3.3 Restaurant Brands Data from Industry Reports

4 Methodology

4.1 Directory Data on Limited-Service Restaurant Chains

4.2 Economic Census and Census of Population Data

5 Results

5.1 Analysis Within Economic Census Measures

5.2 Analysis of Economic Census Measures with Franchised Format Audit

6 Discussion and Implications

References

A Model of Optimal International Market Expansion: The Case of US Hotel Chains Expansion into China

1 Introduction

2 The International Expansion Assessment Model

2.1 Macro-environmental Assessment (Phase One)

2.2 Micro-environmental Assessment (Phase Two)

2.3 Market Entry Mode (Phase Three)

2.3.1 Country Characteristics and Entry Mode

2.3.2 Industry Sector Characteristics and Entry Mode

2.3.3 Firm Characteristics and Entry Mode

2.3.4 In Summary

3 Application of Model to US Hotel Chain Entry into China

3.1 Country Profile: China

3.2 Profile of China´s Hotel Industry

3.3 Firm-Specific Characteristics

3.4 Macro Assessment: Conclusions

3.5 Micro Assessment: Conclusions

3.6 Entry Mode: Conclusions

4 Conclusions

References

Is the Theory of Entrepreneurship Applicable to Franchising?

1 Introduction

2 Franchising and Entrepreneurship

2.1 Franchising from the Viewpoint of Entrepreneurship

2.2 The Process of Becoming a Franchisee

3 Shane´s Model of the Entrepreneurial Process

3.1 The Individual-Opportunity Nexus Framework

3.2 Key Postulates of the Individual-Opportunity Nexus Framework

4 Conclusions and Implications

References

Regulating the Franchise Relationship: Franchisor Opportunism, Commercial Morality and Good Faith

1 Introduction

2 Not an Ordinary Commercial Contract

3 Good Faith and the Franchise Relationship

4 Formulating a Concept of Good Faith

4.1 The Meaning of Good Faith

4.2 The Limitations on Good Faith

4.3 The Reality of Good Faith

5 Legislating a Good Faith Obligation

6 Conclusion

References

Effect of New Regulation on Franchising Performance: An Exploratory Study in Spain

1 Introduction

2 The Spanish Franchise Legislation

3 Aspects and Effects of Franchise Regulation

3.1 Positive Aspects of Regulation

3.2 Negative Aspects of Regulation

3.3 Moderating Effect of Origin and Growth

4 Data and Empirical Analysis

5 Results

6 Discussion

References

Part B: Alliances

Value Creation in Network Relationships

Organization of Innovation through Alliances

Knowledge Management in Networks

The Efficacy of Relational Governance and Value-Creating Relational Investments in Revenue Enhancement in Supplier-Buyer

1 Introduction

2 Conceptual Background

2.1 Relational Exchange Theory (RET)

2.1.1 Relationalism (Relational Governance)

2.1.2 Commitment-Trust Theory

2.2 Value-Exchange Model (VEM)

3 The Conceptual Model

3.1 Perceived Relationality (Relational Governance)

3.2 Relationship Quality

3.2.1 Total Partner Satisfaction (TPS)

3.2.2 Inter-organizational Trust

3.3 Inter-organizational Commitment

3.4 Value-creating Relational Investments (VcRIs)

3.4.1 Value-Creating Relational Investments: The Process

3.5 Revenue-Enhancing Behaviours (ReBs)

3.5.1 Longevity of Relationship

3.5.2 Increased Business Share

3.5.3 Word-of-Mouth Effects

3.5.4 Reduced Partial Defection

3.6 Moderating Variables

3.6.1 Relationship Phase

3.6.2 Relational Polygamy

4 Summary and Future Research

References

Networked Resource Access and Networked Growth: A Double Network Hypothesis on the Innovative Entrepreneurial Firm

1 Introduction

2 Networked Resource Access in NTBFs

3 Networked Growth

4 A ``Double Network´´ Hypothesis

5 A Test of the Double Network Hypothesis

5.1 Sample and Measures

5.1.1 Inbound Networks

5.1.2 Outbound Networks

5.1.3 Control Variables

5.2 Data Analysis and Results

6 Summary and Conclusions

References

A Network Approach to the Structure and Organization of Joint RandD Projects

1 Introduction

2 Theoretical Perspectives

2.1 Joint RandD Projects as Social and Complex Networks

2.2 Structural Attributes of Social and Complex Networks

2.3 Research Questions

3 Data and Methodology

3.1 Experts Panel Selection

3.2 Panel of Experts Range

3.3 Design and Validation of the Questionnaire

3.4 Measures

3.4.1 Measure of Independent Variables

3.4.2 Measure of Dependent Variables

3.4.3 Control Variables

4 Analysis

5 Results

5.1 Research Question 1: Variability and Significance of Measures

5.2 Research Question 2: Determinants of the Success of Projects

6 Conclusions

References

Strong Ties, Weak Ties and the Management of Innovation: The Case of Danish and German SMEs

1 Introduction

2 Innovation in SME Networks

2.1 Innovation, Knowledge and Networks

2.2 Strategic Partners in the Innovation Process

2.3 Avoidance of Uncertainty and Dependence

2.4 Innovation Management in Denmark and Germany

3 Empirical Study

3.1 Data Bases and Operationalization

3.2 Findings

4 Discussion

Appendix

Questionnaire

References

Organization of Knowledge Transfer in Clusters: A Knowledge-Based View

1 Introduction

2 Literature Review

3 The Design of Knowledge Transfer Mechanisms in Clusters

4 Empirical Analysis

4.1 Sample and Data Collection

4.2 Measurement

4.2.1 Information Richness

4.2.2 Knowledge Characteristics

4.2.3 Control Variables

4.3 Results

4.3.1 Hypothesis 1: HIR

4.3.2 Hypotheses 2: LIR

5 Discussion

Appendix

Measures of Variables

References

Influence of Network Maturity on Organisational Learning and Knowledge Transfer in Strategic Alliances

1 Introduction

2 Theoretical Framework

2.1 Organisational Learning and Knowledge Transfer

2.2 The Evolutionary Perspective of Organisational Learning in Strategic Alliances

3 Research

3.1 Research Design

3.2 Research Settings

3.3 Findings

3.3.1 Organisational Learning and Knowledge Transfer

3.3.2 Network Longevity Vs. Network Maturity

Network Longevity

Network Maturity

4 Concluding Remarks

References

Part C: Cooperatives

Behavioral Logics and Governance of Cooperatives

Gemeinschaft and Gesellschaft in Cooperatives

1 Introduction

2 Case Studies

2.1 Member Motive Variety

2.1.1 Swedish Forest Owners

2.1.2 Macedonian Dairy Farmers

2.1.3 Russian Agricultural Producers

2.1.4 Members of a Swedish Farm Supply and Grain Marketing Cooperative

2.1.5 New Zealand Dairy Farmers

2.2 Alignment of Member Society and Business Firm Motives

3 Gemeinschaft and Gesellschaft

3.1 Gemeinschaft

3.2 Gesellschaft

3.3 From Gemeinschaft to Gesellschaft

4 Analysis

5 Conclusions

References

The Role of Social Capital in the Development of Community-Based Co-operatives

1 Introduction

2 Theoretical Background

2.1 Defining Social Capital

2.2 The Formation of Social Capital

3 Qualitative Research and Development of Hypotheses

3.1 Social Capital and Community-Based Co-operatives

3.2 The Community Context and Social Capital

3.3 Participation in Community-Based Co-operatives and Social Capital

4 Methods

4.1 Sampling Frame and Response Rates

4.2 Variables and Measures

4.2.1 Community Context

4.2.2 Social Capital

4.2.3 Participation and Community-Based Co-operatives

5 Results

5.1 The Community Context

5.2 Levels of Participation

5.3 Social Network Characteristics

5.4 The Relationship Between Community Context, Social Capital and Participation in Community-Based Co-operatives

6 Implications

7 Discussion, Limitations and Conclusion

References