Catherine L Wang and Levent Altinay (2006)
The Role of Prior Knowledge in International Franchise Partner Recruitment. International Journal of Service Industry Management, 17 (5). pp. 430-443. ISSN 0956-4233
Full text access: Open
To investigate the role of prior knowledge in the international franchise partner recruitment process and to evaluate how cultural distance influences the role of prior knowledge in this process.
A single embedded case study of an international hotel firm was the focus of the enquiry. Interviews, observations and document analysis were used as the data collection techniques.
Findings reveal that prior knowledge of the franchisor enables the franchisor to coordinate more efficiently with prospective partners. However, the case study firm experienced a great deal of cultural distance in different country markets. The greater the cultural distance, the more challenges the firm has to face in terms of upgrading and adapting its prior knowledge to local needs.
The findings are based on a hotel franchise chain, and may not be generalisable to other firms or industry sectors, although the literature on international management does not indicate any substantial differences between hotel firms and other types of organisations. Despite this limitation, the findings shed light on the importance of critically evaluating a firm’s prior knowledge in a complex, multinational context.
This paper illuminates the challenges international franchisors face, and highlights the need to adapt their prior knowledge base to the local needs. The findings also reinforce the message that selecting prospective franchisees that are familiar to the franchise business format and willing to adopt the franchise system is crucial to the long-term success of the franchise system.
This paper cross-fertilises literature of organisational learning and franchising and evaluates the interplay of prior knowledge, cultural distance and international franchise recruitment. The findings provide further evidence on the mixed influences of prior knowledge on international franchise partner recruitment, and caution firms to critically evaluate their prior knowledge in international expansion. The findings also contribute to the understanding of franchise partner selection and recruitment, and bring in new addition to the body of existing franchising literature which largely examines the operations of the franchise system.
This is a Published version
This version's date is:
is peer reviewed
Deposited by Al Dean (ZSRA118) on
in Royal Holloway Research Online.Last modified on 07-Jan-2011
(C) 2006 Emerald, whose permission to mount this version for private study and research is acknowledged. The repository version is the author's final draft.
Altinay, L. (2004), “Implementing international franchising: the role of intrapreneurship”, International Journal of Service Industry Management, Vol. 15 No. 5, pp. 426-443.
Aydin, N. and Kacker, M. (1990), “International outlook of US-based franchisers”, International Marketing Review, Vol. 7 No 2., pp. 45-53.
Brickley, J. and Dark, F, (1987), “The choice of organizational form: the case of Franchising”, Journal of Financial Economics, Vol.18, pp. 401-421.
Calantone, R. J and Zhao, Y. S. (2001) “Joint ventures in China: A comparative study of Japanese Korean, and U.S. partners”, Journal of International Marketing, Vol. 9, No. 1, pp1-23.
Castrogiovanni, G, J. and Justis, R. T. (1998), “Franchising configurations and transitions”, Journal of Consumer Marketing, Vol. 15, No. 2, pp 170-190.
Chetty, S. and Campbell-Hunt, C. (2004), “A strategic approach to internationalization: a traditional versus a ‘born-global’ approach”, Journal of International Marketing, Vol 12, No1., pp57-81.
Clark, JJ (1993), “Holiday Inn: new rooms in the inn”, Cornell Hotel and Restaurant Administration Quarterly, Vol. 34, No 5., October, pp. 59-67.
Cohen, W. M. and Levinthal, D. A. (1990), “Absorptive capacity: A new perspective on learning and innovation”, Administrative Science Quarterly, Vol.35, pp128-152.
Conner, K. and Prahalad, C., (1996), “A resource-based theory of the firm: knowledge versus opportunism”, Organisation Science, Vol. 7, No. 5, pp. 477-501.
De Clercq, D. and Sapienza, H. J. (2005), “When do venture capital firms learn from their portfolio companies?”, Entrepreneurship: Theory and Practice, Vol. 29, No. 4, pp. 517-535.
Dewhurst, J. and Burns, P. (1993), Small Business Planning, Finance and Control. Macmillan.
Eisenhardt, K. and Bourgeois, L. J. (1988) “Politics of strategic decision-making in high velocity environments: toward a mid-range theory”, Academy of Management Journal, Vol. 31, pp737-770.
Elango, B. and Fried, V. (1997), “Franchising research: a literature review and synthesis”, Journal of Small Business Management, July, pp 68-81.
Eriksson, K., Johanson, J., Majkgard, A. and Sharma, D. D. (2000), “Effect of variation on knowledge accumulation in the internationalization process”, 22 International Studies of Management and Organization, Vol. 30, No. 1, pp. 26- 44.
Eroglu, S. (1992), “The internationalization process of franchise systems: a conceptual model”, International Marketing Review, Vol. 9, No.5, pp 19-30.
Fey, C. F. and Beamish, P. W. (2001), “Organizational climate similarity and performance: international joint ventures in Russia”, Organization Studies, Vol. 22, No. 5, pp. 853-882.
Finnie, M., Bevan, N., Eadie, G., Collyer, G. and Noble, S., (1999) “Bass: Hospitality Tense”, Deutsche Bank, 5th October.
Fulop, C., (2000), “History and development”. In Franchising Hospitality Services, Lashley, C. and Morrison, A. (Eds.), Butterworth Heinemann, pp. 22-43.
Fulop, C. and Forward, J. (1997), “Insights into franchising: a review of empirical and theoretical perspectives”, The Service Industries Journal, Vol. 17, No. 4, pp. 603-625.
Gerringer, J. M., (1991), “Strategic determinations of partner selection criteria in international joint venture”. Journal of International Business Studies, Vol. 22, No. 1, pp. 41-61. Grant, C. (1985), Business Format Franchising: A System for Growth, Economist Intelligence Unit.
Hitt, A. M., Dacin, T. M., Levitas, E., Arregle, J. and Borza, A. (2000), “Partner Selection in Emerging and Developed Market Contexts: Resource Based and Organisational Learning Perspectives”, Academy of Management Journal, Vol 43, No. 1, pp. 449-476.
Johanson, J. and Vahlne, J. E. (1977), “The internationalization process of the firm: a model of knowledge development and increasing foreign market commitments”, Journal of International Business Studies, Vol. 8 No.1, pp. 23-32.
Knabe, R., Cumming, R., Hargreaves, E. and Purdy, M (2000), “Bass: hot on the heels of the brewing disposal?”, Dresdner Kleinwort Benson Research, 10th August.
Kogut, B. and Zander, U. (1992), “Knowledge of the firm, combinative capabilities, and the replication of technology”, Organization Science, Vol. 3 No. 3, pp383- 397.
Leonard-Barton, D. (1992), “Core capabilities and core rigidities: a paradox in managing new product development”, Strategic Management Journal, Vol.13, summer special issue, pp. 111-125.
Liyanage, S. and Barnard, R. (2002), “What is the Value of Firms’ Prior Knowledge? Building Organisational Knowledge Capabilities”, Singapore Management Review, Vol. 24 No.3, pp. 35-50.
Madhok, A. and Tallman, S. B. (1998), “Resources, transactions and rents: managing value through interfirm collaborative relationships”, Organization Science, Vol. 9 No.3, pp. 326-339.
Madsen, T. K. and Servais, P. (1997), “The internationalization of born globals: an evolutionary process?” International Business Review, Vol. 6 No. 6, pp. 561- 583.
Mendelsohn, M., (1996), The Guide To Franchising. Pergamon Press, NewYork.
Miller, D. (1993), "The architecture of simplicity", Academy of Management Review, Vol.18, pp116-138. Minkler, A. (1990), “An empirical analysis of a firm’s decision to franchise”, Economic Letters, Vol. 34, pp. 77-82.
Norton, S. (1988), “Franchising, brand name capital, and the entrepreneurial capacity problem”, Strategic Management Journal, Vol. 9, pp. 105-114.
Sampson, C. R. (2005), “Experience Effects and Collaborative Returns in R&D Alliances”, Strategic Management Journal, Vol. 26, pp. 1009-1031.
Schein, E. H. (1996), “Culture: the missing concept in organisation studies”, Administrative Science Quarterly, Vol. 41, pp. 229-240.
Schildt, H.A., Maula, M.V.J. and Keil, T. (2005), “Explorative and exploitative learning from external corporate ventures”, Entrepreneurship: Theory and Practice, Vol. 29 Issue 4, pp. 493-515.
Strauss, A. L. and Corbin, J., (1990), The Basics of Qualitative Research: Grounded Theory Procedures and Techniques, Sage: Newbury Park, CA.
Taylor, S., (2000), “Hotels” in Lashley, C. and Morrison, A. (Eds.). Franchising Hospitality Services. Butterworth Heinemann, Oxford. pp. 170-191.
Tatoglu, E., (2000), “Western joint ventures in Turkey: strategic motives and partner selection criteria”, European Business Review, Vol. 12 No. 3, pp. 137-147.
Todeva, E. and Knoke, D. (2005), “Strategic Alliances and Models of Collaboration”, Management Decision, Vol. 43 No. 1, pp. 123-148.
Yin, K. R, (1994), Case Study Research: Design and Methods, Sage Publications, London.