• Journal of Distribution Science
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• v.12 no.2
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• pp.39-47
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• 2014

Purpose - The ultimate goal of a franchise system comes from its win-win strategy. Agency theory uses goal incongruity to examine complex contracting problems between buyers and suppliers. Goal incongruity within a contractual relationship can be defined as the agent's desire not to cooperate. It is the degree to which the contractual terms do not satisfy the agent's goals. The greater the goal incongruity between the agent and the contract, the more likely it is that the agent will meet the terms of the contract. Thus, goal incongruity between buyers and suppliers has close relationships with both behavioral and financial performance. This study tries to examine these relationships in the franchise context using a model including related variables, such as regulatory foci, financial performance, and opportunism, to explain the reasons that not all franchisees perform their best. In particular, the study examines the effects of goal incongruity on regulatory focus, and the effects of regulatory focus on performance and opportunism. In short, the objective is to determine goal incongruity's effect on regulatory foci, and the effect of regulatory focus on performance and opportunism. Research design, data, and methodology - This study used data collected from the franchisee managers of 104 franchisors in South Korea. The franchisors include more than 10 franchisees, the majority of whom have been in business for more than five years. The study also surveyed 104 franchisees, matched with their franchisors for the sake of a dyadic approach. The study used regression analysis to test the hypotheses. Results - H1 and H2 predicted that goal incongruity would decrease promotion focus and increase prevention focus. Supporting H1, the result indicates goal incongruity had a positive effect on promotion focus. However, H2 was not supported. Goal incongruity had no significant effect on prevention focus (β = -.375, t = -4.331 and β = -.145, t = -1.950, respectively). H3 and H4 predicted that promotion focus would increase financial performance and decrease opportunism. Supporting these hypotheses, the results indicate that promotion focus had a positive effect on financial performance and a negative effect on opportunism (β = .771, t = 7.899 and β = -.765, t = -6.778, respectively). H5 and H6 predicted that prevention focus would decrease financial performance and increase opportunism. However, the results do not support these hypotheses. The results indicate that prevention focus had no effects on opportunism or financial performance (β = -.130, t = -1.070 and β = .090, t = .641, respectively). Overall, the evidence generally supported the hypotheses. Conclusion - Goal incongruity between a franchisor and a franchisee increases the franchisee's financial performance and opportunism, and the relationship is mediated by promotion focus. Interestingly, however, prevention focus has no mediating effect between goal incongruity and performance. Even though no significant relation exists between goal incongruity and prevention focus, the results have two implications. First, decreasing goal incongruity can improve financial performance and suppress franchisee opportunism. Second, the relationship between goal incongruity and performance affects promotion-focused franchisees.

• Journal of Distribution Science
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• v.14 no.7
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• pp.91-100
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• 2016

Purpose - Recently actively growing franchise systems distribution channel system in which franchise headquarter compared with franchise occupies an important place in distribution channel. Due to this, franchise and franchise headquarter are interdependent on task and in this situation the goal they go after, motivation and objective are probably inconsistent. If so, possibility to participate goal setting process or operating activity of opposite side is becoming bigger and in the end conflict may generate. The purpose of this study is to examine the role of the supervisor's attitude and expertise as moderating factors in the relationship between goal-incongruity/coercive power/role-incongruity and the conflict perceived by franchisee. Research design, data and methodology - This study was intended to verify how the supervisor's attitude and expertise as moderating factors in the relationship between goal-incongruity/coercive power/role-incongruity and the conflict perceived by franchisee. In order to achieve the purpose of this study, some study models and hypotheses have been established through theoretical examinations. Then, using these scales, the researcher completed the questionnaire survey. To test our hypotheses, the survey was conducted from March 9, 2016 for 20 days by random sampling, The study was implemented through a descriptive survey method using a self-administered questionnaire. A survey of 124 restaurant franchisee across Seoul and Gyeonggi Province was performed. A total of 124 completed responses were analyzed. In this study, I used SPSS 22.0 to analyze data and did frequency analysis to see demographic, and general features of the respondents; also did exploratory factor analysis to examine the validity of the items of measurement. Factor analysis was first calculated at a minimum, the number of factors, principal component analysis used when variables are committed to maximising the information with (principle component analysis) and the rotation of factors were angry about the great variable factors than 1.0 by applying Varimax rotation. In addition, I used the value of Cronbach's (Alpha) to examine the reliance of questionnaire items, final analysis the reliability factor can be found both high reliability hayeoteumeuro exceeds over 0.6 and did Multiple regression analysis to test hypothesis and also did hierarchical regression analysis to examine moderating effect. Results - To analyze the proposed model, according to the analysis result, it was found that the influence of goal-incongruity, coercive power, and role-incongruity on the perceived conflict of franchisee is moderated by the supervisor's attitude and expertise. That is, the more the supervisor's attitude and expertise were positive, the more the conflicts of the goal-incongruity, coercive power, and role-incongruity were decreased. It also confirmed previous research's finding that goal-incongruity, coercive power, and role-incongruity positively influence on the conflict. Conclusions - According to the results of this research which reduces the conflict of franchise from the in consistent goal; coercive power, and inconsistent role of superiors, it provides very important implications for franchise headquarter which has franchise system and also give them some suggestion about how to recruit superiors and what kind of training may be fit for the superiors.

• Journal of Distribution Science
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• v.18 no.4
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• pp.51-60
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• 2020

Purpose: The purpose of this study is to derive a strategy to manage the relationship termination intention of the partner in a B2B transaction. To achieve this goal, the relationship compatibility was classified into goal incongruity, domain dissensus, perception difference, and verified the effects of these variables on relationship termination intention. Trust which is well known as a variable which develops the relationship and prevents relationship termination is used as a moderating variable in this study. This study identifies and highlights which relationship incompatibility increases relationship termination intention more when trust is high and when it is low. Research design, data, and methodology: The data of this study were obtained via an interview with 274 purchasing decision makers. Results: It was found that goal incongruity and domain dissensus increased the partner's relationship termination intention. Trust amplified the effect of goal incongruity which increased relationship termination intention, but reduced the effect of domain dissensus which increase relationship termination intention. Conclusions: Through this research, it has emerged that the relationship can be terminated because of high trust. If a partner has a high level of trust in the past in a company, it should take more care not to perceive goal incongruity.

• Asia Marketing Journal
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• v.20 no.2
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• pp.1-27
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• 2018

This study examines the effects of dependence and conflict on organizational performances in partnership, qualitatively (trust) and quantitatively (sales) under four control variables (period of business, number of goods, competition density, and number of employees). Also, this study presents termination cost and alternative attractiveness as the antecedents of dependence, goal incongruity and unfairness as the antecedents of conflict. As the results of analysis with survey data from 360 distributors in manufacturer-distributor partnership, 7 hypotheses are supported and 2 hypotheses are rejected. The results of structural equation modeling (SEM) verify that termination cost increases dependence, that alternative attractiveness reduces dependence, that goal incongruity and unfairness increase conflict, that dependence reduces conflict, that dependence increases trust, and that conflict reduces trust. However, unexpectedly, dependence reduces sales, and conflict has no impact on sales. The results of this study provide insightful implications theoretically and managerially to scholars and practitioners interested in partnership.

• Journal of Distribution Science
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• v.15 no.2
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• pp.91-100
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• 2017

Purpose - Domestic franchise market has been grown steadily, reaching 50 trillion won in sales and 3,360 franchise headquarters in 2014. A franchise system is an effective business system for the franchisees to lower the failure rate due to the fact that the inexperienced entrepreneurs are supported by their headquarters through the franchisee contract. However, there are also conflicts between franchiser and franchisee behind the quantitative growth of domestic franchise industry. Therefore, it is very important to structure the causes of conflicts and to examine the effect of factors on the relationship commitment and performances. Research design, data, and methodology - In this study, the author divides the composite incompatibility between the franchise and the franchisee into goal incongruity, domain dissensus, and perceptual differences, and examines each dimension to the relationship with commitment and performances. To verify the proposed research model and test hypotheses, the author selected 200 franchise responses in food and beverage industry. The data were analyzed using SPSS 18.0 and AMOS structural equation modeling program. Results - The empirical findings provide goal incongruity and perceptual differences have a negative effect on the affective commitment, but not the calculative commitment. In addition, affective commitment and calculative commitment are found to have a positive effect on re-contractual intention and extended brand shop running intention, respectively. Affective commitment have a stronger effect on re-contractual intention than calculative commitment. Conclusions - First of all, the fact that goal incongruity and perceptual differences negatively affect the affective commitment, but it does not affect the calculative commitment. It means the relationship commitment in distribution channel are multi-dimensional concept that may be attributed to emotional or affective dimensions but may exist in terms of necessity or power-dependence. Second, the level of relationship commitment such as affective and calculative commitment to franchise headquarters positively affects the re-contractual intention and franchiser's extend brand shop running intention suggest that franchiser should encourage and support existing franchisee's commitment. Third, the fact that affective commitment has a greater effect on relationship performance than calculative commitment means to induce franchisee's affective commitment and to prevent the inconsistency between goals and perceptual differences.

• The Korean Journal of Franchise Management
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• v.12 no.1
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• pp.35-44
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• 2021

Purpose: This study examines the opportunism moderating effect by the startup experience in the relationship between franchisor and franchisees. In the case of a franchise system that has a continuous relational exchange transaction, relationship management is a very important activity because the relationship management between franchisor and franchisees improves the quality of the relationship. Nevertheless, there is insufficient of research on opportunism, which is a negative factor in managing the relationship between franchisor and franchisees in continuous relationship. Research design, data and methodology: This study, we explore the cause of opportunism based on transaction cost theory through prior research and establish a research model based by goal incongruity, uncertainty, information asymmetry, transaction specific assets, the relevance to determinant of opportunism and the startup experienced which is a moderating variable. To verify several hypotheses, the data were collected from 300 out of 1,760 domestic franchisees and analyzed using multiple regression analysis with SPSS program. Results: The findings are as follows. Goal incongruity did not affect opportunism. Opportunism increased as uncertainty increased, and as information asymmetry increased, opportunism increased. An opportunism decreased as transaction specific assets increased. Moreover, the findings show that startup experience only plays a moderating role in the relationship between information asymmetry and opportunism. Therefore, 4 out of 8 hypotheses were supported. Conclusions: The findings show that uncertainty, information asymmetry, and transaction specific assets are the determinants of opportunism. In addition, the results of the analysis of the moderating role of startup experience show that the less entrepreneurial experience, the greater the influence of information asymmetry on opportunism. Our findings mean that maintaining a successful relationship between franchisors and franchisees is possible when franchisors provide knowledge sharing, goal sharing, environmental sharing, and management information sharing to franchisees. In addition, the findings of this study shows that the contract content and management should be changed according to the entrepreneurial experience. In other words, the franchisors must share and integrate the accumulated franchisees' and franchisors' experience with the franchisees to create a synergy that can lead to successful bilateral relationship maintenance, which in turn reduces opportunism.

• Journal of Distribution Research
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• v.9 no.3
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• pp.21-47
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• 2004

This study has investigated the effects of relieving and promoting factors on dissolution intention under the condition of low commitment buyer-seller relationships. Based on intensive literature reviews, eight alleviating factors (dependence, cooperation, communication, relational norms, transaction specific investments, relationship termination costs, satisfaction, and trust) and five promoting factors (opportunism, conflict, goal incongruity, attractiveness of alternatives, and unfairness) were included. A total of thirteen hypotheses were testee using data collected from a dining franchising system. Among 300 collected, 79 cases of low commitment buyer-seller relationships were analyzed. The results showed that eight out of thirteen hypotheses were supported. But five hypotheses related to the variables of cooperation, transaction specific investments, relationship termination costs, attractiveness of alternatives, and opportunism were not supported. following a detailed presentation of the analysis results, the paper concludes by discussing the academic and managerial implications of the findings.