Are Franchises Bad Employers?
Franchise jobs are often 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, however, that the basic operating principles and practices of franchises tend to be more sophisticated 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. While descriptive statistics suggest that franchise operations use low road practices, once industry, size, and other control variables are included in the analysis, franchise operations appear on important dimensions to offer better jobs with more sophisticated systems of employee management than similar non-franchise operations.
|Date of creation:||Aug 2007|
|Date of revision:|
|Publication status:||published as Peter Cappelli & Monika Hamori, 2008. "Are Franchises Bad Employers?," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 61(2), pages 147-162, January.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Osterman, 1994. "How Common is Workplace Transformation and Who Adopts it?," ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
- 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.
- Sandra E. Black & Lisa M. Lynch & Anya Krivelyova, 2003.
"How workers fare when employers innovate,"
Working Paper Series
2003-22, Federal Reserve Bank of San Francisco.
- 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.
- Sandra E. Black & Lisa Lynch & Anya Krivelyova, 2003. "How Workers Fare When Employers Innovate," NBER Working Papers 9569, National Bureau of Economic Research, Inc.
- Hennessy, David A., 2003.
"Property Rights, Productivity, and the Nature of Noncontractible Actions in a Franchise System,"
Staff General Research Papers Archive
11750, Iowa State University, Department of Economics.
- 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.
- 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.
- 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, Omicron Delta Epsilon, vol. 34(1), pages 54-61, March.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13327. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.