Franchising, Knowledge Transfer Practices, and Institutions : Perspectives from Emerging Markets

Abstract

The popularity of franchising as a method for businesses expansion is increasing, from small, medium-sized, and large firms to social enterprises. To enjoy the benefits of franchising experienced by Western countries, Africa, through the African Development Bank, has put more effort in using the franchising model to promote SME development and the private sector with the goal of creating wealth and reducing poverty. Identifying the core practices of franchising is therefore essential in order to promote the general understanding of franchising among entrepreneurs, bankers, lawyers, management consultants, investors, donors, governments, and policymakers. By conducting three independent but related studies, this thesis contributes to the building of knowledge concerning knowledge management in franchising firms. Study 1 reviews the research on knowledge management for over two decades to provide an overview of what has been done and determine the gaps that need to be filled to advance theory and practice. I conducted two empirical studies to investigate the knowledge transfer practices of franchising firms in Africa. Study 2 investigates the factors that contribute to the choice of knowledge transfer mechanisms. I found that the successful transfer of knowledge depends not only on the choice of the correct transfer mechanisms but also on the use of such mechanisms to transfer the relevant knowledge to franchisees. Study 3 explores institutional factors and how they impede knowledge transfer practices. In this study I used a company that has utilized the franchising model successfully to grow in African countries regarded as having weak institutions. I found that franchising firms expand into different institutional environments by adapting knowledge transfer practices without altering the core practices of the model.