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Research Note: Trade Name Franchise Membership as a Human Resource Management Strategy: Does Buying Group Training Deliver ‘True Value’ for Small Retailers?

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  • Reginald A. Litz
  • Alice C. Stewart

Abstract

Human resource management (HRM) is an important source of competitive advantage. However, recent reports document that HRM, and in particular employee training, is less likely to occur in small firms. One possible remedy of special interest to small retailers is trade name franchise membership. Trade name franchises, or buying groups, claim to offer small firms advantages not otherwise realizable, including bulk buying discounts, brand name recognition and workforce training. We report results from our study of over 300 small and medium-sized hardware stores, which tested the effects of employee training and trade name franchise membership, on small firm performance. Trade name franchisees achieve higher mean performance; however, the contribution to performance made by franchisees’ training does not appear to be significantly better than that of independent stores.

Suggested Citation

  • Reginald A. Litz & Alice C. Stewart, 2000. "Research Note: Trade Name Franchise Membership as a Human Resource Management Strategy: Does Buying Group Training Deliver ‘True Value’ for Small Retailers?," Entrepreneurship Theory and Practice, , vol. 25(1), pages 125-135, October.
    • Handle: RePEc:sae:entthe:v:25:y:2000:i:1:p:125-135
    DOI: 10.1177/104225870002500110
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    References listed on IDEAS

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    1. Hoy, Frank & Shane, Scott, 1998. "Franchising as an entrepreneurial venture form," Journal of Business Venturing, Elsevier, vol. 13(2), pages 91-94, March.
    2. Birger Wernerfelt, 1991. "Brand Loyalty and Market Equilibrium," Marketing Science, INFORMS, vol. 10(3), pages 229-245.
    3. Frank Mueller, 1996. "Human Resources As Strategic Assets: An Evolutionary Resource‐Based Theory," Journal of Management Studies, Wiley Blackwell, vol. 33(6), pages 757-785, November.
    4. Mahoney, Joseph T., 1995. "The management of resources and the resource of management," Journal of Business Research, Elsevier, vol. 33(2), pages 91-101, June.
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    1. Evelien P. M. Croonen & Marko Grünhagen & Melody L. Wollan, 2016. "Best fit, best practice, or stuck in the middle? The impact of unit ownership on unit HR performance in franchise systems," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 697-711, September.
    2. Kim Hoque & Nicolas Bacon, 2006. "The antecedents of training activity in British small and medium-sized enterprises," Work, Employment & Society, British Sociological Association, vol. 20(3), pages 531-552, September.
    3. Neil Tocher & Matthew W. Rutherford, 2009. "Perceived Acute Human Resource Management Problems in Small and Medium Firms: An Empirical Examination," Entrepreneurship Theory and Practice, , vol. 33(2), pages 455-479, March.
    4. Francesco Chirico & Dianne H. B. Welsh & R. Duane Ireland & Philipp Sieger, 2021. "Family versus Non‐Family Firm Franchisors: Behavioural and Performance Differences," Journal of Management Studies, Wiley Blackwell, vol. 58(1), pages 165-200, January.
    5. Rauch, Andreas & Hatak, Isabella, 2016. "A meta-analysis of different HR-enhancing practices and performance of small and medium sized firms," Journal of Business Venturing, Elsevier, vol. 31(5), pages 485-504.

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