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International franchise partner selection and chain performance through the lens of organisational learning

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  • Catherine L. Wang
  • Levent Altinay

Abstract

This study aims to investigate how international franchisors engage in exploratory and exploitative learning in the partner selection process and the implications for chain performance. Based on an embedded case study of a leading international hotel organisation, the findings reveal that the franchisor attempted a balanced learning approach in response to challenges caused by high cultural distance in international markets. However, the ‘crowd-out’ effect of exploration and exploitation created a ‘tension’: exploration emphasising adaptation to local needs dominated the partner identification stage in country markets, whilst exploitation stressing standardisation and efficiencies dominated the partner decision-making stage at division. As a result, a consistent brand image came at the cost of very cautious international expansion.

Suggested Citation

  • Catherine L. Wang & Levent Altinay, 2008. "International franchise partner selection and chain performance through the lens of organisational learning," The Service Industries Journal, Taylor & Francis Journals, vol. 28(2), pages 225-238, March.
    • Handle: RePEc:taf:servic:v:28:y:2008:i:2:p:225-238
    DOI: 10.1080/02642060701842290
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    Cited by:

    1. Altinay, Levent & Brookes, Maureen & Madanoglu, Melih & Aktas, Gurhan, 2014. "Franchisees' trust in and satisfaction with franchise partnerships," Journal of Business Research, Elsevier, vol. 67(5), pages 722-728.
    2. Norazman Saharum & Ahmad Rahman Songip & Nurul Fadly Habidin & Mas Bambang Baroto, 2017. "A Review Evolution Dominant Theories in Adaptation to Franchising System," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(3), pages 528-538, March.
    3. Rosado-Serrano, Alexander & Paul, Justin & Dikova, Desislava, 2018. "International franchising: A literature review and research agenda," Journal of Business Research, Elsevier, vol. 85(C), pages 238-257.
    4. Srikant Devaraj & Pankaj C Patel, 2017. "Health insurance and employee productivity: Findings from the 2007 Survey of Business Owners," Economics Bulletin, AccessEcon, vol. 37(2), pages 1351-1364.
    5. González-Márquez, Rafael & Rosa-Díaz, Isabel María & Caro-González, Francisco Javier & Galán-González, José Luis, 2023. "Where to internationalise and why: Country selection by restaurant franchises," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    6. Kretinin, Andrey & Anokhin, Sergey & Wincent, Joakim, 2020. "Exploring the antecedents of franchise internationalization," Journal of Business Research, Elsevier, vol. 112(C), pages 422-430.
    7. Watson, Anna & Dada, Olufunmilola (Lola) & Grünhagen, Marko & Wollan, Melody L., 2016. "When do franchisors select entrepreneurial franchisees? An organizational identity perspective," Journal of Business Research, Elsevier, vol. 69(12), pages 5934-5945.
    8. Tamara Galkina, 2021. "International ECOpreneurship: Environmental commitment and international partner selection of Finnish firms from the energy sector," Journal of International Entrepreneurship, Springer, vol. 19(2), pages 300-320, June.
    9. José Ramírez-Hurtado & Flor Guerrero-Casas & Francisco Rondán-Cataluña, 2011. "Criteria used in the selection of franchisees: an application in the service industry," Service Business, Springer;Pan-Pacific Business Association, vol. 5(1), pages 47-67, March.

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