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http://dx.doi.org/10.5392/JKCA.2011.11.3.351

Effects of External Environment of Franchisor on Corporate Performance -Focused on Entrepreneurship, Market Orientation and Organizational Structure-  

Lee, Tae-Yong (대구가톨릭대학교 외식산업학과)
Yoo, Young-Jin (대구가톨릭대학교 외식산업학과)
Publication Information
The Journal of the Korea Contents Association / v.11, no.3, 2011 , pp. 351-367 More about this Journal
Abstract
Few previous researches have been studied in terms of franchisees' perceptions of franchisors' entrepreneurial activities within the boundary of restaurant franchising industry settings. The sampling frame for this study included 605 restaurant franchisees in the business-format franchising system in Korea and data were collected from 1 October 2009 to 28 February 2010. This study, from franchisees' views, investigated the relationship among franchisors' entrepreneurship, external environment, organizational structure(mechanistic-organic) and managerial performance, with structural equation modeling(SEM). The research findings were, firstly, external environment positively affected entrepreneurship which positively affected market orientation and managerial performance, and secondly, market orientation made franchisors select organic structure and heighten managerial performance. Also, external environment led franchisors to adopt organic structure and aggravated their managerial performance. The implications of these findings were as follows. Firstly, the more franchiors had initiatives, innovatedness and risk-taking attitudes, the higher they had managerial performances and market orientation. Secondly, franchisors should keep and heighten market share with keeping in mind with customer orientation, competition orientation, harmony between departments, long-term orientation and profitability. Thirdly, continuous and cautious environmental scanning was necessary because external restaurant environment made organizational structure being changed and managerial performance being aggravated.
Keywords
External Environment; Market Orientation; Entrepreneurship; Mechanistic-organic Organization; Managerial Performance; Franchise System;
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