Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - The franchise relationship in China
T2 - agency theory and institutional theory perspectives
AU - Doherty, Anne Marie
AU - Chen, Xiaomin
AU - Alexander, Nicholas Simon
PY - 2014/10/10
Y1 - 2014/10/10
N2 - This study explores the franchise relationship in China, focusing on the relational constructs of power, control, support and conflict in this developing franchise environment. Agency theory has dominated franchise research. A more rounded theoretical interpretation of the franchising relationship is offered by employing both agency theory and institutional theory perspectives.The study adopts an interpretive approach, employing in-depth interviews with franchisors and franchisees in nine franchise organisations operating in the retail sector in China. It contributes a fuller understanding of how to manage the research process in China.The study reveals how the relational constructs of power, control, support and conflict are manifest in the franchise relationship in China. The explanatory power of agency theory is apparent when viewed in terms of the vertical agency problem. However, free-riding outside the franchise system, in the form of counterfeiting, mitigates against the occurrence of free-riding within it. With regard to institutional theory, we demonstrate that the regulatory institutional pillar is a crucial foundation for the franchise relationship.The study offers insights for franchisors and franchisees considering franchise relationships in China.For the first time in the literature, this study offers insights into key elements ofthe franchise relationship in China. Employing both agency and institutional theories facilitates a rounded explanation of the developing franchise environment in China.
AB - This study explores the franchise relationship in China, focusing on the relational constructs of power, control, support and conflict in this developing franchise environment. Agency theory has dominated franchise research. A more rounded theoretical interpretation of the franchising relationship is offered by employing both agency theory and institutional theory perspectives.The study adopts an interpretive approach, employing in-depth interviews with franchisors and franchisees in nine franchise organisations operating in the retail sector in China. It contributes a fuller understanding of how to manage the research process in China.The study reveals how the relational constructs of power, control, support and conflict are manifest in the franchise relationship in China. The explanatory power of agency theory is apparent when viewed in terms of the vertical agency problem. However, free-riding outside the franchise system, in the form of counterfeiting, mitigates against the occurrence of free-riding within it. With regard to institutional theory, we demonstrate that the regulatory institutional pillar is a crucial foundation for the franchise relationship.The study offers insights for franchisors and franchisees considering franchise relationships in China.For the first time in the literature, this study offers insights into key elements ofthe franchise relationship in China. Employing both agency and institutional theories facilitates a rounded explanation of the developing franchise environment in China.
KW - China
KW - Institutional theory
KW - Retail
KW - Qualitative
KW - Agency theory
KW - Franchise relationship
U2 - 10.1108/EJM-04-2012-0199
DO - 10.1108/EJM-04-2012-0199
M3 - Journal article
VL - 48
SP - 1664
EP - 1689
JO - European Journal of Marketing
JF - European Journal of Marketing
SN - 0309-0566
IS - 9-10
ER -