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Are franchises bad employers?

Author

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  • MONIKA HAMORI

    () (Instituto de Empresa)

Abstract

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.

Suggested Citation

  • Monika Hamori, 2006. "Are franchises bad employers?," Working Papers Economia wp06-11, Instituto de Empresa, Area of Economic Environment.
  • Handle: RePEc:emp:wpaper:wp06-11
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    References listed on IDEAS

    as
    1. 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.
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    3. Hennessy, David A., 2003. "Property rights, productivity, and the nature of noncontractible actions in a franchise system," Journal of Economic Behavior & Organization, Elsevier, vol. 52(4), pages 443-468, December.
    4. 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.
    5. 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.
    6. 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.
    7. 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 223-233, April.
    8. Wade L. Thomas & Michael J. O'Hara & Frank W. Musgrave, 1990. "The Effects of Ownership and Investment upon the Performance of Franchise Systems," The American Economist, Sage Publications, vol. 34(1), pages 54-61, March.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
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    Cited by:

    1. Tschoegl Adrian E, 2007. "McDonald's -- Much Maligned, But an Engine of Economic Development," Global Economy Journal, De Gruyter, vol. 7(4), pages 1-18, December.
    2. Maté Fodor, 2016. "Essays on Education, Wages and Technology," ULB Institutional Repository 2013/239691, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    Employement practise; Franchise organizations;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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