Control modes in international service operations: the propensity to franchise

Article Abstract:

A study explores the factors that influence a service company's choice between equity-based control and franchising. It proposes that global franchising serves as an alternative control mode to 100% ownership of foreign operations. The study involves 12 large, US-based multinational companies from the hotel, restaurant, food retail and merchandise retail industries. The control mode selected by these organizations are explained using transaction cost analysis and a theoretical framework based on agency theory. The results show that the tendency towards global franchising is directly related to the franchisor's international experience, the level of the host country's contextual uncertainty, and the monitoring costs related to the geographical and 'cultural' distance between the franchisor and the franchisees.

International business enterprises, Multinational corporations

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The acquisition, transfer, and depreciation of knowledge in service organizations: productivity in franchises

Article Abstract:

A study was conducted to investigate the acquisition, depreciation and transfer of knowledge gathered through learning by doing in service organizations. More particularly, the study examined productivity gains in 36 pizza stores franchised from the same corporation and owned by 10 different franchisees in Southwestern Pennsylvania. The collection of data was done for one and a half years. Results showed that the unit cost of production substantially drops as the franchises gain experience in production. Knowledge through learning by doing swiftly depreciated in these organizations. Transfer of knowledge was seen across stores owned by the same franchisee but not across stores owned by different franchisees.

Eating places, Limited-Service Restaurants, Fast Food Pizza Restaurants, Fast food restaurants, Pizza restaurants, Pizzerias, Transfer of training, Experiential learning

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The persistence and transfer of learning in industrial settings

Article Abstract:

Data collected from 16 shipyards which were involved in constructing Liberty Ships during World War II are used to examine learning within organizations and whether learning is transferred across organizations. Research results suggest that learning achieved through production depreciates rapidly and that the measure of cumulative output overstates whether knowledge persists within organizations. The results also suggest that while there is some evidence that knowledge transfers across organizations, when production is initiated within organizations, organizations do not appear to gain from learning in alternative organizations.

Learning, Organizational behavior

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