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In this paper, we examine ownership structures of franchise chains and evaluate their impact on franchisor profit. Specifically we compare pure forms of franchising with those that use both company-owned and franchised outlets within one chain — a phenomenon termed the plural form. Theoretically such plural arrangements are supposed to provide franchisors with lower costs, higher growth, greater total-quality, and reduced business risk. Empirical results of this study indicate the superiority of company-owned businesses over franchised units in generating franchisor profits. Moreover plurally organized systems compensate for losses from franchising with profits from company units and outperform purely franchised competitors in overall profitability. Despite a clear financial inferiority of franchise outlets, franchisors of our sample do not convert plural structures into wholly-owned chains. Much more when organizing the chain, franchisors face an (skewed) inverse u-shaped profitablity curve with both pure franchising and pure company-ownership lying at the (undesirable) extremes and with a performance peak somewhere in between. [ABSTRACT FROM AUTHOR]

Plural form franchising is modeled from an incomplete contracting perspective. Complete franchising is the unique, efficient governance structure only when the plural form externality is limited and the costs of investment are low for both franchisees. Governance structure choice is irrelevant when the costs of investment are high for all franchisees, because no franchisee will invest. Finally, a plural form governance structure is the unique, efficient equilibrium in all other cases because the power allocated to independent franchisees makes them confident that they will be able to recoup their investments. Not locational or other differences between units are necessary for the emergence of plural form franchising, but positive externalities being specific for the plural form. [ABSTRACT FROM AUTHOR]

How are the new farmer specialized cooperatives in China organized? This question is addressed by presenting data at three levels. First, data are presented regarding the historical development of farmer cooperatives in China. Second, data are presented regarding the membership composition of a sample of 66 farmer cooperatives in the Zhejiang province. Third, data are presented regarding the various attributes (governance, quality control system, and strategy) of a watermelon cooperative in this province. Many cooperatives are being transformed in organizations with a market orientation. The data indicate that cooperatives exhibit substantial heterogeneity, in terms of farmers being member and skewness in the distribution of control rights. Human asset specificity in terms of establishing and maintaining relations and access to markets seems to be more important than physical asset specificity in accounting for governance structure choice in the current institutional setting. [ABSTRACT FROM AUTHOR]

There are significant differences between the diversification behavior of investor-owned enterprises and cooperatives ({PAMVan Oijen and Hendrikse 2002}). However, the origin of these differences is not well understood. The impact of the orientation of decision-makers on the evolution of the diversification portfolio is analyzed with agent-based simulations. [ABSTRACT FROM AUTHOR]

The past three decades have witnessed a growing theoretical and managerial interest in international joint ventures (IJVs). Of growing interest has especially been the analysis of IJV performance. The previous studies have indicated very varying results about IJV performance and determinants of IJV performance. Fourteen hypotheses of the impact of foreign parent, target country, and investment strategy specific variables on performance were developed and tested. In a central role in the study was also the question do the results depend on the measure of performance? As the measures of performance were selected: longevity, survival, and stability. The empirical part of the paper is based on over 720 IJVs made by Finnish firms. The most significant variables were the international experience and the degree of diversification of the Finnish firms, unit unrelatedness, and the individualism dimension of culture. The results indicated relatively much differences depending on measure of performance. [ABSTRACT FROM AUTHOR]

The evolution of large international audit firms was driven by client needs and legal regulations specific for the audit industry. The organizational structure of these professional service firms can be characterized as a specific form of a strategic network. The national member firms have to adapt to their different legal, cultural, and economic national environment. In particular, the legal rules in the audit sector establish barriers of entry for foreign competitors and prevent more common forms of market entry, e.g. the acquisition of another audit firm or the establishment of a subsidiary in a foreign country. Networks of audit firms are a prime example of hybrid governance structures between markets and hierarchies and are organized by contractual relationships between legal and economically autonomous partnership entities from different countries. These networks are controlled by a committee structure. Strategic decisions are made by one or more lead firms. This article describes the governance structure of international audit firm networks. Furthermore, we analyse how coordination and incentive problems, e.g. hold-up and moral hazard situations are dealt with in these network structures. Exclusive rights, referral work, brand names, network-specific investments, and profit pooling are means to ensure that network members cooperate. [ABSTRACT FROM AUTHOR]

New trends in investor behaviour have emerged in recent years. It is believed that activist investors involve themselves in the companies in which they invest through influencing company strategy and through using their knowledge and contacts to introduce portfolio companies to networks of suppliers and customers, professionals and alternative sources of finance. We carry out a case study research to examine these trends. The findings empirically confirm the importance of organizational structure for the process of investor engagement. They show that independent and more specialized investors are much more involved with their companies than captives. Experienced and knowledgeable partners are also more likely to offer advice and support services. We also find examples of investor influence in company management in areas such as strategy, human resource management and performance evaluation. [ABSTRACT FROM AUTHOR]

This paper explores a model of inter-firm network in the case of the winter sports industry. It discusses the problem of skiing resort frontiers and the nature of the inter-firms arrangements to produce the final product i.e. spending holidays in a mountain resort. Two network archetypes are defined. They ensue from two approaches in economics: the Transaction Cost Economics and the French Theory of Conventions. In conclusion, we show that these two networks are complementary. Thus, skiing resorts can no longer be seen as autonomous organizations with spatial boundaries. Their frontiers are extended to the contractual or conventional arrangements which characterize the new winter sports industrial organization. [ABSTRACT FROM AUTHOR]

This paper analyses governance structures used to organize partnerships in R&D networks emphasizing the degree of administrative and social factors they embody. Data was obtained from European R&D networks created through Framework Programmes, which include a great number of universities, non-profit institutions and firms. We argue that governance structures are related to the applicability of the technology developed in the network. Findings show that two kinds of networks exist in which administrative structures as well as the openness and cohesion of the R&D network have different relevance in governance structures. This study not only provides a theoretical model to analyse governance structures of these networks, but is also useful both for improving the management of networks and for fostering collaboration at an international level. [ABSTRACT FROM AUTHOR]

This paper aims to grasp the complexity of how and why franchise partners as strategic alliance partners interact with each other given March's exploration/ exploitation trade-off (March 1991). A research model is presented that distinguishes five types of responses that partners may adopt in their relationships. The empirical part consists of a case study which focuses on two ‘strategic change Trajectories' (SCTs) in a franchise system in the Dutch drugstore industry. During these SCTs the franchisor tried to implement strategic changes in the franchise system. This paper discusses what responses franchisees adopted in a reaction to the introduction of these SCTs by the franchisor, what responses the franchisor adopted toward these franchisees in turn, and why both partners adopted these responses. The paper concludes with adding a new response type to the current response typology, with providing insight in why franchise partners adopt certain responses, and with discussing the implications of this study. [ABSTRACT FROM AUTHOR]