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Organizational choices and financial performance: the case of company-owned stores, franchisee-owned stores and stores-within-a-store among French fashion retailers

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Author Info

  • Paul Amadieu

    (University of Montpellier 1’, Economic and Social Administration, Montpellier)

  • Karine Picot-Coupey

    (CREM UMR CNRS 6211, University of Rennes 1, FranceCREM UMR CNRS 6211, University of Rennes 1, IGR-IAE Rennes, France)

  • Jean-Laurent Viviani

    (CREM UMR CNRS 6211, University of Rennes 1, IGR-IAE Rennes, France)

Abstract

This paper deals with the governance and financial performance issues in the context of French Fashion retail companies. In this study, we analyze the influence of the organizational choices on the financial performance at the network level. We consider three forms used in isolation (company-owned stores, franchisee-owned stores and stores-within-a-store), three dually-organized forms (dual forms mixing two of the three forms) as well as a combined form associating the three ones. We study a sample of mostly privately-held French retail companies from the fashion sector (n= 170), using two criteria of performance - profit margin ratio and return on assets. The results show that none of the purely or dual forms tends to generate better financial performance than any other, even though descriptive statistics exhibit important differences in terms of performance among organizational forms. The results highlight that networks combining company-ownership, franchising and stores-within-a-store generate better financial performance, up to a certain point.

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Bibliographic Info

Paper provided by Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS in its series Economics Working Paper Archive (University of Rennes 1 & University of Caen) with number 201335.

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Date of creation: Nov 2013
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Handle: RePEc:tut:cremwp:201335

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Postal: CREM (UMR CNRS 6211) - Faculty of Economics, 7 place Hoche, 35065 Rennes Cedex - France
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Related research

Keywords: Organizational form; financial performance; plural form; combined form; store-within-a-store; franchised store; company-owned store;

This paper has been announced in the following NEP Reports:

References

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  1. Noel Capon & John U. Farley & Scott Hoenig, 1990. "Determinants of Financial Performance: A Meta-Analysis," Management Science, INFORMS, vol. 36(10), pages 1143-1159, October.
  2. Magali Chaudey & Muriel Fadairo & Gwennaël Solard, 2013. "Network Integration Through Franchised and Company‐Owned Chains: Evidence from French Distribution Networks," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 34(3-5), pages 195-203, 04.
  3. Thierry Pénard & Emmanuel Raynaud & Stéphane Saussier, 2011. "Monitoring Policy and Organizational Forms in Franchised Chains," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(3), pages 399-417, November.
  4. Francine Lafontaine & Kathryn L. Shaw, 2005. "Targeting Managerial Control: Evidence from Franchising," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 131-150, Spring.
  5. Renáta Kosová & Francine Lafontaine & Rozenn Perrigot, 2013. "Organizational Form and Performance: Evidence from the Hotel Industry," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1303-1323, October.
  6. Frédéric Perdreau & Anne-Laure Le Nadant & Gérard Cliquet, 2010. "Plural Form and Franchisors Performance : Early Empirical Findings From Europe," Post-Print halshs-00522601, HAL.
  7. Botti, Laurent & Briec, Walter & Cliquet, Gérard, 2009. "Plural forms versus franchise and company-owned systems: A DEA approach of hotel chain performance," Omega, Elsevier, vol. 37(3), pages 566-578, June.
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