Monitoring policy and organizational forms in franchised chains

Abstract : Franchising is nowadays a prominent way to organize the distribution sector. While previous literature suggests that monitoring issues are a critical determinant of organizational choices, it is rather silent on the optimal monitoring strategy once the organization of the chain is set. In this article, we analyze the monitoring policy of chains with both franchised and company-owned units. We develop a model in which a chain monitors its outlets under asymmetric information on local demands and managers' efforts. We show that partial monitoring (i.e., when the franchisor monitors only a subset of its outlets) represents an optimal monitoring policy. Second, we identify the units that should be monitored. Finally, we discuss the impact of information technologies and outlet location on monitoring policy and how it may affect the proportion of franchised and company-owned units within the mixed chains.
Type de document :
Article dans une revue
International Journal of the Economics of Business, Taylor & Francis (Routledge), 2011, 18 (3), pp.399-417
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https://halshs.archives-ouvertes.fr/halshs-00656123
Contributeur : Danièle Moret-Bailly <>
Soumis le : mardi 3 janvier 2012 - 15:50:12
Dernière modification le : mardi 5 mars 2019 - 18:34:06

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  • HAL Id : halshs-00656123, version 1

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Thierry Pénard, Emmanuel Raynaud, Stéphane Saussier. Monitoring policy and organizational forms in franchised chains. International Journal of the Economics of Business, Taylor & Francis (Routledge), 2011, 18 (3), pp.399-417. 〈halshs-00656123〉

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