Ownership structure, organisational flexibility and store performance in retail chains.

Drawing on agency and flexible capability perspectives, the authors develop a theoretical framework explaining the impact of ownership structure on organisational flexibility and store performance in retail chains. The researchers argue that franchised stores attract more entrepreneurial managers with more flexible capabilities and they have a stronger incentive to align their flexible capabilities with the demands of the business environment. A sample of 105 franchised and company-owned stores of an optical retail chain is used to test the hypotheses. Furthermore, the study found strong support for the hypotheses that 'Franchised stores have a higher structural flexibility than company-owned stores', but only weak support for operational and strategic flexible capabilities. Furthermore, in line with the study's theoretical framework, it has been found that in a highly turbulent business environment, franchised stores perform better than company-owned stores. The paper concludes with a discussion of the implications for theory development and management of ownership structures in retail chains.

Managing for Legitimacy: Agency Governance in its “Deep” Constitutional Context

Recent literature on bureaucratic structure has gone further than studying discretions given to bureaucrats in policy making, and much attention is now paid to understanding how bureaucratic agencies are managed. This article proposes that the way in which executive governments manage their agencies varies according to their constitutional setting and that this relationship is driven by considerations of the executive’s governing legitimacy. Inspired by Tilly (1984), we compare patterns of agency governance in Hong Kong and Ireland, in particular configurations of assigned decision-making autonomies and control mechanisms. This comparison shows that in governing their agencies the elected government of Ireland’s parliamentary democracy pays more attention to input (i.e. democratic) legitimacy while the executive government of Hong Kong’s administrative state favors output (i.e. performance) legitimacy. These different forms of autonomy and control mechanism reflect different constitutional models of how political executives acquire and sustain their governing legitimacy.