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A Strategic Deviance Perspective on the Franchise Form of Organizing

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  • Roland E. Kidwell
  • Arne Nygaard

Abstract

Drawing on various theoretical perspectives, we propose that franchisors cannot assess and control opportunism absent comparative information provided by owning and operating some of their outlets and by franchising others. Moving beyond dyadic perspectives, we propose that the concept of strategic deviance suggests why franchisors accept deviant behavior resulting from vertical and horizontal agency problems in multiagent contracts. A plural form provides efficiency and quality benchmark information that curbs even greater levels of shirking and free–riding behaviors and enhances system performance. Opportunistic behaviors by company managers and franchisees are addressed through self–enforced social control and social comparison mechanisms.

Suggested Citation

  • Roland E. Kidwell & Arne Nygaard, 2011. "A Strategic Deviance Perspective on the Franchise Form of Organizing," Entrepreneurship Theory and Practice, , vol. 35(3), pages 467-482, May.
    • Handle: RePEc:sae:entthe:v:35:y:2011:i:3:p:467-482
    DOI: 10.1111/j.1540-6520.2011.00439.x
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    3. Watson, Anna & Dada, Olufunmilola (Lola) & Grünhagen, Marko & Wollan, Melody L., 2016. "When do franchisors select entrepreneurial franchisees? An organizational identity perspective," Journal of Business Research, Elsevier, vol. 69(12), pages 5934-5945.
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    5. James G. Combs & David J. Ketchen Jr & Jeremy C. Short, 2011. "Franchising Research: Major Milestones, New Directions, and its Future within Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 35(3), pages 413-425, May.
    6. Gillis, William E. & Combs, James G. & Yin, Xiaoli, 2020. "Franchise management capabilities and franchisor performance under alternative franchise ownership strategies," Journal of Business Venturing, Elsevier, vol. 35(1).
    7. William E. Gillis & James G. Combs & David J. Ketchen Jr., 2014. "Using Resource–Based Theory to Help Explain Plural Form Franchising," Entrepreneurship Theory and Practice, , vol. 38(3), pages 449-472, May.
    8. Constantino J. Garcia Martin & Amparo Medal-Bartual & Marta Peris-Ortiz, 2014. "Analysis of efficiency and profitability of franchise services," The Service Industries Journal, Taylor & Francis Journals, vol. 34(9-10), pages 796-810, July.
    9. Utgård, Jakob & Nygaard, Arne & Dahlstrom, Robert, 2015. "Franchising, local market characteristics and alcohol sales to minors," Journal of Business Research, Elsevier, vol. 68(10), pages 2117-2124.
    10. Semrau, Thorsten & Biemann, Torsten, 2022. "When sergeants can outrank generals: Person-organization fit and the performance of franchisees as agents of their franchisor," Journal of Business Venturing, Elsevier, vol. 37(2).

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