TY - JOUR
T1 - Institutional influences on the choice of organizational form
T2 - The case of franchising
AU - Combs, James G.
AU - Michael, Steven C.
AU - Castrogiovanni, Gary J.
PY - 2009/10
Y1 - 2009/10
N2 - Current explanations for franchising assume that managers only pay attention to firm-specific economic factors. In contrast, the authors submit that social factors described by institutional theory will enhance understanding. Using a sample of 1,300 franchisors active during 1980 through 2000, the authors find evidence that both environmental and internal institutional pressures influence firms' propensity to franchise, but that responsiveness to internal institutional pressures declines as economic reasons to franchise increase. Overall, social factors appear to actively influence franchising, but their impact is muted by economic factors. The results also suggest that perhaps franchising is itself becoming an institutionalized norm. For researchers, institutional theory promises to be a fruitful avenue for increasing understanding about franchising. For franchisors, results highlight the value of systematic analysis of franchising decisions.
AB - Current explanations for franchising assume that managers only pay attention to firm-specific economic factors. In contrast, the authors submit that social factors described by institutional theory will enhance understanding. Using a sample of 1,300 franchisors active during 1980 through 2000, the authors find evidence that both environmental and internal institutional pressures influence firms' propensity to franchise, but that responsiveness to internal institutional pressures declines as economic reasons to franchise increase. Overall, social factors appear to actively influence franchising, but their impact is muted by economic factors. The results also suggest that perhaps franchising is itself becoming an institutionalized norm. For researchers, institutional theory promises to be a fruitful avenue for increasing understanding about franchising. For franchisors, results highlight the value of systematic analysis of franchising decisions.
KW - Franchising
KW - Institutional theory
KW - Organizational form
KW - Panel data
UR - http://www.scopus.com/inward/record.url?scp=70350446723&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=70350446723&partnerID=8YFLogxK
U2 - 10.1177/0149206309336883
DO - 10.1177/0149206309336883
M3 - Article
AN - SCOPUS:70350446723
SN - 0149-2063
VL - 35
SP - 1268
EP - 1290
JO - Journal of Management
JF - Journal of Management
IS - 5
ER -