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Governance structures in the hotel industry

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  • Dahlstrom, Robert
  • Haugland, Sven A.
  • Nygaard, Arne
  • Rokkan, Aksel I.

Abstract

This study investigates alternative governance forms in the hotel industry. Agency theory maintains that the need for control over service quality, financial risk, and the market environment affect the choice of governance form. Prior agency research emphasizes alternative governance structures that principals employ, given local market conditions, agent incentives, and risk preferences. The study augments the established principal-agent perspective with a discussion of entrepreneurial motivations to join hotel alliances. The study analyzes the choice between independent ownership and affiliation with a voluntary chain as well as the choice between integration and franchising. Data analyses from 650 hotels indicate that the hotel size, amenities, population, and distance to headquarters influence governance.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Business Research.

Volume (Year): 62 (2009)
Issue (Month): 8 (August)
Pages: 841-847

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Handle: RePEc:eee:jbrese:v:62:y:2009:i:8:p:841-847

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Web page: http://www.elsevier.com/locate/jbusres

Related research

Keywords: Hotel industry Voluntary chains Agency theory Monitoring Franchising Service industry;

References

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  1. Corriveau, Gilles & Tamilia, Robert D., 2002. "Comparing transactional forms in administered, contractual and corporate systems in grocery distribution," Journal of Business Research, Elsevier, vol. 55(9), pages 771-773, September.
  2. Arne Nygaard & Ingunn Myrtveit, 2000. "Moral hazard, competition and contract design: empirical evidence from managerial, franchised and entrepreneurial businesses in Norway," Applied Economics, Taylor & Francis Journals, vol. 32(3), pages 349-356.
  3. Norton, Seth W, 1988. "An Empirical Look at Franchising as an Organizational Form," The Journal of Business, University of Chicago Press, vol. 61(2), pages 197-218, April.
  4. Farok J Contractor & Sumit K Kundu, 1998. "Modal Choice in a World of Alliances: Analyzing Organizational Forms in the International Hotel Sector," Journal of International Business Studies, Palgrave Macmillan, vol. 29(2), pages 325-356, June.
  5. Andrea Shepard, 1993. "Contractual Form, Retail Price, and Asset Characteristics in Gasoline Retailing," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 58-77, Spring.
  6. Brickley, James A & Dark, Frederick H & Weisbach, Michael S, 1991. "The Economic Effects of Franchise Termination Laws," Journal of Law and Economics, University of Chicago Press, vol. 34(1), pages 101-32, April.
  7. HOLMSTROM, Bengt, . "Moral hazard and observability," CORE Discussion Papers RP -379, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Brickley, James A. & Dark, Frederick H., 1987. "The choice of organizational form The case of franchising," Journal of Financial Economics, Elsevier, vol. 18(2), pages 401-420, June.
  9. Oliver D. Hart, 1983. "The Market Mechanism as an Incentive Scheme," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 366-382, Autumn.
  10. Goldberg, Stephen M & Green, Paul E & Wind, Yoram, 1984. "Conjoint Analysis of Price Premiums for Hotel Amenities," The Journal of Business, University of Chicago Press, vol. 57(1), pages S111-32, January.
  11. Rubin, Paul H, 1978. "The Theory of the Firm and the Structure of the Franchise Contract," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 223-33, April.
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Cited by:
  1. Muriel Fadairo & Cintya Lanchimba Lopez, 2012. "Performance in distribution systems : What is the influence of the upstream firm’s organizational choices ?," Working Papers 1224, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  2. Muriel Fadairo & Cintya Lanchimba, 2012. "Performance in distribution systems : What is the influence of the upstream firm's organizational choices ?," Working Papers halshs-00727382, HAL.

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