Franchiser influence strategy use and franchisee experience and dependence

Data from a survey of franchisees of a packaging, mailing, and business services franchise system indicate franchisers make more frequent use of requests, threats, and legalistic pleas, and less use of recommendations to coordinate less dependent franchisees. Franchisee dependence mediates the relationship between franchisee experience and franchiser use of recommendations, threats, and legalistic pleas. At the same time, it is interesting to find that franchiser use of information exchange and promise does not vary as franchisees mature in a system.     

Team Virtues and Performance: An Examination of Transparency, Behavioral Integrity, and Trust

Virtue-based research in business ethics has increased over the last two decades, but most of the research has focused on the actions of an individual person. In this article, we examine the associations among team-level virtues using data from two studies. Specifically, we investigate whether transparency (usually thought to be an organizational- or collective-level construct), behavioral integrity (usually thought to be an individual-level construct), and trust (usually thought to be an individual-level construct) can be conceptualized and operate at the team level of analysis and, if so, what their relationships are to team performance. Using Partial Least Squares (PLS) analysis, we found in both studies that team transparency was positively related to team behavioral integrity, which in turn was positively related to team trust. We also found evidence of a positive relationship between team trust and team performance. Implications of these findings for future teams and ethics research are discussed.     

Operational flexibility and market valuation of earnings

This paper examines the association between the stock returns and accounting earnings of firms that have different levels of operational flexibility. Operational flexibility is a firm’s ability to respond profitably to environmental fluctuations by shifting factors of production within a multinational network of subsidiaries. The geographic breadth and depth of a firm’s multinational network are used as indicators of operational flexibility. We find a significantly greater coefficient relating stock returns and accounting earnings for multinational firms that operate in many countries, but limit their concentration in any one foreign country, than for other multinational firms or domestic firms. This coefficient is significantly smaller for multinational firms whose foreign subsidiaries are highly concentrated in a few countries. When all multinational firms are pooled together, we find their earnings‐returns association does not differ from that of domestic firms. Copyright © 1999 John Wiley & Sons, Ltd.     

The changed legality of resale price maintenance and pricing implications

From 1911 until 2007, minimum resale price maintenance agreements between manufacturers and resellers were illegal under federal antitrust law. This handicapped manufacturers which sought to exert control over how their products were priced and promoted through the distribution channel. In June 2007, the United States Supreme Court—via the Leegin case—ruled that bilateral minimum resale price maintenance agreements would no longer be automatically illegal. Rather, they would be legal if their net impact is pro-competitive, and illegal only if the net impact is anti-competitive. This ruling empowers manufacturers to use resale price maintenance to create value for their customers and consumers. However, not all stakeholders—including some state legal systems—have embraced the Leegin ruling, thereby creating uncertainty regarding its final impact. Despite this uncertainty, the opportunities created by Leegin are worth exploring and acting upon. Since the Leegin ruling 3 years ago, a new landscape for resale pricing maintenance has been evolving. We discuss this landscape and the considerations for using resale price maintenance within its ambit. For many manufacturers, the chance of benefitting from Leegin outweighs any potential risks.     

Valuing Exclusivity from Encroachment in Franchising

Conflict is created when business format franchisors penetrate existing markets with new outlets that increase system-wide sales, but negatively affect the sales and profits of existing franchisees. Territorial exclusivity contracts are used to manage channel conflict in such situations. We present a model to value territorial exclusivity from the perspective of both the franchisor and the franchisee. We show that under certain circumstances there is positive value to the franchisor by including the exclusivity clause in the contract and to the franchisee by purchasing this exclusivity. When this happens, the likelihood of franchisor-franchisee encroachment-related conflict is reduced.     

Culture, product type, and price influences on consumer purchase intention to buy personalized products online

With personalization, consumers can choose from various product attributes and a customized product is assembled based on their preferences. Marketers often offer personalization on websites. This paper investigates consumer purchase intentions toward personalized products in an online selling situation.The research builds and tests three hypotheses: (1) intention to purchase personalized products will be affected by individualism, uncertainty avoidance, power distance, and masculinity dimensions of a national culture; (2) consumers will be more likely to buy personalized search products than experience products; and (3) intention to buy a personalized product will not be influenced by price premiums up to some level. Results indicate that individualism is the only culture dimension to have a significant effect on purchase intention. Product type and individualism by price interaction also have a significant effect, whereas price does not. Major findings and implications are discussed.