Monitoring and Coordination in Franchise Chains: Geographic Dispersion and Automation Impacting Contractual Mix

• Autor(a) principal: Bitti, Eugênio José Silva
• Data de Publicação: 2013
• Outros Autores: Aquino, André Carlos Busanelli, Amato Neto, João
• Tipo de documento: Artigo
• Idioma: por
• Título da fonte: Revista de contabilidade e organizações
• Texto Completo: https://www.revistas.usp.br/rco/article/view/55275
• topic: franchising; custos de monitoramento; automação.; franchising; monitoring costs; automation.

This study examines the interaction between influence factors on the contractual mix of Brazilian franchised chains. Two factors are discussed in more detail. First, geographical dispersion of outlets increases monitoring costs, which requires performance incentives mechanisms. Agency Theory proposes that powerful performance incentives are obtained when the local manager is shifted to residual claimant of the outlet. Reciprocally, more automated manufacturing processes increase the capacity of monitoring networks, reducing the need for such incentives. Tests are performed using information from 191 Brazilian franchised networks. Cross-sectional analysis supports our hypothesis: both vectors act in the expected direction on the distribution of ownership of units (owned and franchised stores). The study’s results support the propositions tested: both vectors act in the expected direction on the contractual mix. These results may be useful both for deciding to expand the chain as well as for choosing distinct technology bundles of production processes.