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Are franchises bad employers?



    (Instituto de Empresa)

Franchise jobs are described as representing the epitome of the "low road" approach to managing employees. High turnover, little training, deskilled jobs, and little employee involvement, practices often seen as unsophisticated. Research on franchise operations suggests that their basic operating principles and practices tend to be more professional and advanced than those of equivalent independent operators. We might therefore expect their employee management practices to be more advanced as well, challenging the stereotype of franchise jobs. We use data from a national probability sample of establishments to examine the relationship between franchise status and employment practices.

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Paper provided by Instituto de Empresa, Area of Economic Environment in its series Working Papers Economia with number wp06-11.

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Length: 24 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:emp:wpaper:wp06-11
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  1. John Godard, 2001. "High performance and the transformation of work? The implications of alternative work practices for the experience and outcomes of work," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(4), pages 776-805, July.
  2. John Godard, 2001. "High Performance and the Transformation of Work? The Implications of Alternative Work Practices for the Experience and Outcomes of Work," ILR Review, Cornell University, ILR School, vol. 54(4), pages 776-805, July.
  3. 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.
  4. 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.
  5. Sandra E Black & Lisa M Lynch & Anya Krivelyova, 2003. "How Workers Fare When Employers Innovate," Working Papers 03-11, Center for Economic Studies, U.S. Census Bureau.
  6. Hennessy, David A., 2003. "Property Rights, Productivity, and the Nature of Noncontractible Actions in a Franchise System," Staff General Research Papers 11750, Iowa State University, Department of Economics.
  7. Gil A. Preuss, 2003. "High performance work systems and organizational outcomes: The mediating role of information quality," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(4), pages 590-605, July.
  8. Combs, James G. & Ketchen, David Jr. & Hoover, Vera L., 2004. "A strategic groups approach to the franchising-performance relationship," Journal of Business Venturing, Elsevier, vol. 19(6), pages 877-897, November.
  9. O. Brown Jr., William, 1998. "Transaction costs, corporate hierarchies, and the theory of franchising," Journal of Economic Behavior & Organization, Elsevier, vol. 36(3), pages 319-329, August.
  10. Knott, Anne Marie & McKelvey, Bill, 1999. "Nirvana efficiency: a comparative test of residual claims and routines," Journal of Economic Behavior & Organization, Elsevier, vol. 38(4), pages 365-383, April.
  11. Paul Osterman, 1994. "How common is workplace transformation and who adopts it?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
  12. Alan B. Krueger, 1991. "Ownership, Agency, and Wages: An Examination of Franchising in the Fast Food Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 106(1), pages 75-101.
  13. Gil A. Preuss, 2003. "High Performance Work Systems and Organizational Outcomes: The Mediating Role of Information Quality," ILR Review, Cornell University, ILR School, vol. 56(4), pages 590-605, July.
  14. Scott Shane & Maw-Der Foo, 1999. "New Firm Survival: Institutional Explanations for New Franchisor Mortality," Management Science, INFORMS, vol. 45(2), pages 142-159, February.
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