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Strategic CSR and the Competitive Advantage of Franchise Firms

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Design and Management of Interfirm Networks

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

Abstract

Although corporate social responsibility (CSR) is a widely researched topic, there is a lack of its application in the franchise literature. The integration of CSR into the franchise business model is vital as it affects the franchise firm’s growth and survival. Based on resource-based and organizational capabilities theories, our study explains how CSR strategy impacts the creation of intangible brand name assets as critical source of sustainable competitive advantage and, hence, increased financial performance. We adopt a multi-stakeholder-oriented CSR construct of economic, legal, ethical, and philanthropic responsibility dimensions. Using data from Austrian franchise firms, our results show that those CSR dimensions have a positive impact on brand name asset creation. Specifically, philanthropic responsibility strategy has the greatest impact on brand name assets, followed by legal, ethical, and economic responsibility strategies. Overall, this is the first study in franchising which explains the strategic role of CSR.

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Notes

  1. 1.

    Franchise Business Outlook January 2018, published by the International Franchise Association (IFA) Foundation.

  2. 2.

    Report published in 2011 by the European Franchise Association: “Franchising: A Vector for Economic Growth in Europe.”

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Author information

Authors and Affiliations

  1. Department of Business and Management, LUISS Guido Carli University, Rome, Italy

    Maria Jell-Ojobor

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  1. Maria Jell-Ojobor
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Correspondence to Maria Jell-Ojobor .

Editor information

Editors and Affiliations

  1. University of Vienna, Vienna, Austria

    Josef Windsperger

  2. Institute of Management of Rennes (IAE), Université de Rennes 1, Rennes, France

    Gérard Cliquet

  3. RSM, Erasmus University Rotterdam, Leiderdorp, Zuid-Holland, The Netherlands

    George Hendrikse

  4. Vienna University of Technology, Wien, Austria

    Marijana Srećković

Appendix Summary Measures on CSR Strategy and Brand Name Assets

Appendix Summary Measures on CSR Strategy and Brand Name Assets

Constructs

Items

Description of measures

Brand name assets

Cronbach’s-α = 0.738

CR = 0.932

AVE = 0.776

Four seven-point items, anchored by “do not agree at all” [1] and “totally agree” [7], adopted from Combs and Ketchen, 1999; Erramilli et al., 2002; Barthélemy, 2008

1. Our franchise brand is very strong as compared to our competitors.

2. Our franchise system is very recognized as compared to our competitors.

3. The quality of our franchise system is very high as compared to our competitors.

4. Our brand name is very important for the achievement of competitive advantage.

Constructs

Items

Description of measures

Economic responsibility strategy

Cronbach’s-α = 0.787 CR = 0.913 AVE = 0.783

Three seven-point items, “do not agree at all” [1] and “totally agree” [7], developed by franchise consultants

1. Shared values create trust and bonding in franchise relationships.

2. Social interests beyond minimum legal requirements should be considered after economic interests only.

3. Commitment to social and environmental standards should be consistent with economic objectives.

Legal responsibility strategy

Cronbach’s-α = 0.835

CR = 0.931

AVE = 0.730

Five seven-point items, “do not agree at all” [1] and “totally agree” [7], developed by franchise consultants

1. We have implemented a compliance system to guarantee the recognition of applicable law.

2. We monitor our franchisees’ compliance with the law.

3. We impose sanctions on franchisees for violating the law.

4. We monitor our franchisees’ compliance with system standards and values.

5. We impose sanctions on our franchisees for breaching system standards and values.

Ethical responsibility strategy

Cronbach’s-α = 0.815

CR = 0.939

AVE = 0.757

Five seven-point items, “do not agree at all” [1] and “totally agree” [7], developed by franchise consultants

1. Through sustainable corporate operations, we create progress and benefit for the whole society.

2. Our franchise system aims to add economic as well as social and environmental value with its business operations.

3. If economic and social interests are inconsistent with our corporate operations, we try to find a balance between them.

4. Our franchise system upholds fundamental values which are codified in system manuals, codes of conduct, and similar documents.

5. We expect from our franchisees to comply with our system values.

Constructs

Items

Description of measures

Philanthropic responsibility strategy

Cronbach’s-α = 0.830

CR = 0.921

AVE = 0.746

Four seven-point items, “do not agree at all” [1] and “totally agree” [7], developed by franchise consultants

1. Integration of social and environmental interests into corporate strategy is the responsibility of a corporate citizen.

2. As corporate citizens, we consider social engagement as self-purpose and independent of economic interests.

3. Our franchise system’s reputation is increased by our proven social and environmental engagement.

4. A franchise system should communicate its social and environmental positioning and engagement to the public.

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Jell-Ojobor, M. (2019). Strategic CSR and the Competitive Advantage of Franchise Firms. In: Windsperger, J., Cliquet, G., Hendrikse, G., Srećković, M. (eds) Design and Management of Interfirm Networks. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-030-29245-4_6

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