Article: Ownership structure, organisational flexibility and store performance in retail chains Journal: International Journal of Business Environment (IJBE) 2006 Vol.1 No.3 pp.268 - 279 Abstract: Drawing on agency and flexible capability perspectives, the authors develop a theoretical framework explaining the impact of ownership structure on organisational flexibility and store performance in retail chains. The researchers argue that franchised stores attract more entrepreneurial managers with more flexible capabilities and they have a stronger incentive to align their flexible capabilities with the demands of the business environment. A sample of 105 franchised and company-owned stores of an optical retail chain is used to test the hypotheses. Furthermore, the study found strong support for the hypotheses that |Franchised stores have a higher structural flexibility than company-owned stores|, but only weak support for operational and strategic flexible capabilities. Furthermore, in line with the study|s theoretical framework, it has been found that in a highly turbulent business environment, franchised stores perform better than company-owned stores. The paper concludes with a discussion of the implications for theory development and management of ownership structures in retail chains. Inderscience Publishers - linking academia, business and industry through research

Title: Ownership structure, organisational flexibility and store performance in retail chains

Authors: Henk W. Volberda, Ernst Verwaal, Niels Van Der Weerdt

Addresses: Department of Strategic Management, RSM Erasmus University, P.O. Box 1738, NL-3000 DR, Rotterdam, The Netherlands. ' Department of Strategic Management, RSM Erasmus University, P.O. Box 1738, NL-3000 DR, Rotterdam, The Netherlands. ' Department of Strategic Management, RSM Erasmus University, P.O. Box 1738, NL-3000 DR, Rotterdam, The Netherlands

Abstract: Drawing on agency and flexible capability perspectives, the authors develop a theoretical framework explaining the impact of ownership structure on organisational flexibility and store performance in retail chains. The researchers argue that franchised stores attract more entrepreneurial managers with more flexible capabilities and they have a stronger incentive to align their flexible capabilities with the demands of the business environment. A sample of 105 franchised and company-owned stores of an optical retail chain is used to test the hypotheses. Furthermore, the study found strong support for the hypotheses that |Franchised stores have a higher structural flexibility than company-owned stores|, but only weak support for operational and strategic flexible capabilities. Furthermore, in line with the study|s theoretical framework, it has been found that in a highly turbulent business environment, franchised stores perform better than company-owned stores. The paper concludes with a discussion of the implications for theory development and management of ownership structures in retail chains.

Keywords: business environment; organisational flexibility; ownership structure; retail chains; store performance; franchised stores; agency theory; strategic management.

DOI: 10.1504/IJBE.2006.010924

International Journal of Business Environment, 2006 Vol.1 No.3, pp.268 - 279

Published online: 18 Sep 2006 *

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Title: Ownership structure, organisational flexibility and store performance in retail chains

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