Dada, O and Watson, A (2010) Entrepreneurial Orientation and the Franchise System: Organisational Antecedents and Performance Outcomes. Working Paper. Institute for Entrepreneurship and Enterprise Development, Lancaster University.
Abstract
The purpose of this paper is to understand the franchisor's perception of the role of entrepreneurial strategic orientation (EO)-innovative, risk-taking, and proactive actions-within the special case of franchised firms, given the opposing forces for standardisation/uniformity and system innovation/adaptation. A cross-sectional research design, involving a mail questionnaire survey, was employed to collect data from a sample of franchisors operating in the UK. The hypotheses specified in the study were tested using regression (including moderated regression) analyses. The results revealed that EO was significantly and positively related to the performance outcomes of franchise systems, both from financial and non-financial perspectives. In addition, both franchisor support and franchise contract clauses were positively and significantly related to EO. The external contexts of the franchise system-environmental hostility and environmental dynamism-were not found to be significant moderators in the relationship between EO and performance outcomes. This study extends our knowledge of the EO-performance outcomes relationship to the franchising context where the role of EO is presently underexplored.