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Exploring Franchise Boards : a Stakeholder Perspective

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Exploring Franchise Boards : a Stakeholder Perspective University of Louisville ThinkIR: The University of Louisville's Institutional Repository Electronic Theses and Dissertations 5-2012 Exploring franchise boards : a stakeholder perspective. Denise M. Cumberland University of Louisville Follow this and additional works at: https://ir.library.louisville.edu/etd Recommended Citation Cumberland, Denise M., "Exploring franchise boards : a stakeholder perspective." (2012). Electronic Theses and Dissertations. Paper 297. https://doi.org/10.18297/etd/297 This Doctoral Dissertation is brought to you for free and open access by ThinkIR: The University of Louisville's Institutional Repository. It has been accepted for inclusion in Electronic Theses and Dissertations by an authorized administrator of ThinkIR: The University of Louisville's Institutional Repository. This title appears here courtesy of the author, who has retained all other copyrights. For more information, please contact [email protected]. EXPLORING FRANCHISE BOARDS: A STAKEHOLDER PERSPECTIVE By Denise M. Cumberland B.A., University of Maryland, 1980 M.A., University of Maryland, 1982 A Dissertation Submitted to the Faculty of the College of Education and Human Development of the University of Louisville in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Department of Leadership, Foundations and Human Resource Education University of Louisville Louisville, Kentucky May, 2012 Copyright 2012 by Denise Marie Cumberland All rights reserved EXPLORING FRANCHISE BOARDS: A STAKEHOLDER PERSPECTIVE By Denise M. Cumberland B.A., University of Maryland, 1980 M.A., University of Maryland, 1982 A Dissertation Approved on January 25, 2012 By the following Dissertation Committee: Dr. Rod P. Githens Dissertation Co-Chair Dr. Samuel C. Stringfield Dissertation Co-Chair Dr. Sharron A. Kerrick Dr. Brad Shuck Dr. Patricia K. Leitsch DEDICATION This dissertation is dedicated my father. Although his formal education ceased after 8th grade, his love for learning lasted a lifetime. In memory of Joseph C. Cumberland, 1913 - 1975 iii ACKNOWLEDGMENTS I want to acknowledge my best friend and life partner, Dennis P. Whittington, whose support over the last three years has allowed me to have laser focus on achieving my dream of earning a Ph.D. I want to thank Megan and Ryan, my children, who helped me laugh along the way, especially at the absurdity of having index cards taped to my bathroom mirror as I studied for comprehensive exams. My heartfelt thanks to my program committee, whose coaching and advice helped me travel the yellow brick road on the journey to the land of Ph.D. Dr. Sharon A. Kerrick's wise words of wisdom allowed me to set clear deadlines for my own work. Dr. Pat Leitsch's calm and steady voice offered me respite when my angst reached new highs. Dr. Brad Shuck provided on-going words of encouragement to bolster my confidence. My co-chair, Dr. Samuel C. Stringfield, provided the opportunity to draft my first three chapters in a safe environment, and his thoughtful edits elevated my work. Finally, without Dr. Rod P. Githens this Ph.D would not have been possible. At the age of 49, I signed up for one graduate course to "test the waters" about pursuing a Ph.D. Dr. Githens was my professor in that course and he helped me tum my love of learning into the reality of becoming a full time student. He also provided me with the opportunity to pursue my dream of working in academia. Dr. Githens is more than an advisor, more than a co-chair, and more than a mentor. His on-going faith in my ability IV to complete this program has given me the courage to not just walk, but to "skip" down the yellow brick road. There are many other players who also deserve thanks. Two trusted professors, Dr. John Keedy, and Dr. Melissa Evans-Andris, trained me on how to thoroughly conduct a qualitative study. Dr. Ann Herd grounded me in leadership theories, Dr. Namok Choi provided a new found appreciation for factor analyses, and Dr. Wayne Jones, assisted me in thinking about franchising boards based on his years in the industry. My fellow doctoral students provided me moral support and cheered me on during the highs and lows of being a student. My new found friends, including, Megan, Nora, Kelly, Sherry, Jeff, Kitty, Meg, Rupert, John, Ben, Bill, Tray, and Jason are now wonderful additions to my universe. A special thanks to my girlfriends, Kathy, Meredith, Tina, Alice and Meera, who stood by me on this adventure, with either cups of coffee, or glasses of wine, depending on the severity of the situation. In concluding, I would be remiss if I didn't thank the franchisees and franchisors that I interviewed for my research. These individuals generously gave their time and their candid perspectives. Three of these individuals also arranged for me to join their board conference calls and meetings over an extended period of time. I feel blessed to have had the opportunity to explore their world. v ABSTRACT EXPLORING FRANCHISE BOARDS: A STAKEHOLDER PERSPECTIVE Denise M. Cumberland January 25, 2012 The use of franchise advisory boards, typically composed of franchisees and franchisor representatives, is common practice in domestic and international franchise systems. Because effective board collaboration requires teamwork, understanding the stakeholder relationships on these boards is critical at the beginning of any board evaluation or organization development (OD) assessment. One of the goals of OD is to help organizations ensure groups, such as boards, function synergistically. Based on stakeholder and board governance literature, a four-quadrant grid for classifying franchise board relationships was proposed. This typology suggested that franchise board relationships could be classified based on which of the four normative governance processes were emphasized - partnership (franchisors and franchisees dedicated to working together), supporters club (franchisors and franchisees aligned to provide a united front to external audiences), political (franchisors and franchisees concerned with representing specific interests), or monitoring (franchisors and franchisees focused on compliance). Depending on which frames of governance the board favors, the relationships can be categorized as one of the following: antagonists, agents, allies or activists. vi Qualitative research methods included two phases to provide triangulation. First, 22 board members from multiple industries were interviewed. Second, a comparative case study of three franchise boards was conducted over an eight month period. Four research questions framed the study. The first question addressed why franchise boards form, a topic documented in practitioner literature, but with little empirical validation. Findings revealed that the motives for board formation do align with practitioner literature, with one exception. The second research question explored how franchisee and franchisor board members view the roles of the board. The data indicated that franchisors and franchisees agree on some of the reasons, but differ in some respects on the purpose of the boards. This suggests an issue that organization development efforts could help address. The third question investigated how boards were structured. Findings revealed some basic commonalities between different types of boards, be they franchise advisory councils, independent boards, or ad hoc groups. Importantly, however, variation in some key governance processes did have an impact on board member attitudes. The fourth research question examined what types of relationships exist. Findings supported the four grid typology, suggesting organization development practitioners have a practical tool for classifying franchise board relationships as antagonists, agents, allies or activists. The final chapter of this dissertation discusses this study's implications for franchise organizations. In addition, a series of recommendations are offered to help develop allied and activist stakeholder board relationships that foster trust and open communication exchanges. Keywords: Stakeholders; Franchise Boards; Organizational Development vii TABLE OF CONTENTS ABSTRACT ....................................................................................................................... vi LIST OF TABLES ............................................................................................................. xi LIST OF FIGURES ........................................................................................................... xii INTRODUCTION ............................................................................................................... 1 Background of the Study ............................................................................................... 2 Statement of the Problem .............................................................................................. 3 Purpose of this Study ..................................................................................................... 7 Research Questions ....................................................................................................... 7 Limitations .................................................................................................................... 8 Definitions ..................................................................................................................... 9 LITERATURE REVIEW .................................................................................................. 11 Introduction
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