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Esoteric governance mechanism and collective brand equity creation in confederated organizations: Evidence from an emerging economy

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  • Basu, Shubhabrata
  • Pereira, Vijay
  • Sinha, Paresha
  • Malik, Ashish
  • Moovendhan, V.

Abstract

Homogenous resource endowment, contrary to resource heterogeneity, is an unlikely source of competitive advantage. Likewise, a proliferation of similar organizations in a given environment, triggers intense incumbent rivalry. In this study, we present evidence of how resource homogeneity amongst industry peer firms leads to non-competitive aggregation under a confederated structure. The creation of that structure is facilitated by quasi-normative, esoteric governance mechanisms, leading to creation, and leveraging of common brand equity as a collective resource, that provide members with competitive advantages. Using an emerging market case study on an ethnic group of about 2,000 independent restaurants, we highlight how the founder’s esoteric beliefs nearly a century ago, coupled with formalized and standardized processes and practices, and the spawning of newer restaurants via replication, reinforce the collective brand equity. Complementing the case study, we adopted the survey method to empirically test and validate the existence of brand equity from customers’ side.

Suggested Citation

  • Basu, Shubhabrata & Pereira, Vijay & Sinha, Paresha & Malik, Ashish & Moovendhan, V., 2022. "Esoteric governance mechanism and collective brand equity creation in confederated organizations: Evidence from an emerging economy," Journal of Business Research, Elsevier, vol. 149(C), pages 217-230.
    • Handle: RePEc:eee:jbrese:v:149:y:2022:i:c:p:217-230
    DOI: 10.1016/j.jbusres.2022.05.007
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