The interplay of prior knowledge, cultural distance and international franchise recruitment

[German title: Die Wechselwirkung zwischen vorrangigem Wissen, kultureller Entfernung und Anwerben von internationalen Verkaufskonzessionsnehmern]

Title: The role of prior knowledge in international franchise partner recruitment 
Author(s): Levent Altinay, Catherine L. Wang 
Journal: International Journal of Service Industry Management 
ISSN: 0956-4233 
Year: 2006 Volume: 17 Issue: 5 Page: 430 – 443 
DOI: 10.1108/09564230610689768 
Publisher: Emerald Group Publishing Limited 

Abstract: Purpose – To investigate the role of prior knowledge in the international franchise partner recruitment process and to evaluate how cultural distance influences the role of prior knowledge in this process.
Design/methodology/approach – A single embedded case study of an international hotel firm was the focus of the enquiry. Interviews, observations and document analysis were used as the data collection techniques.
Findings – Findings reveal that prior knowledge of the franchisor enables the franchisor to coordinate more efficiently with prospective partners. However, the case study firm experienced a great deal of cultural distance in different country markets. The greater the cultural distance, the more challenges the firm has to face in terms of upgrading and adapting its prior knowledge to local needs.
Research limitations/implications – The findings are based on a hotel franchise chain, and may not be generalisable to other firms or industry sectors, although the literature on international management does not indicate any substantial differences between hotel firms and other types of organisations. Despite this limitation, the findings shed light on the importance of critically evaluating a firm’s prior knowledge in a complex, multinational context.
Practical implications – This paper illuminates the challenges international franchisors face, and highlights the need to adapt their prior knowledge base to the local needs. The findings also reinforce the message that selecting prospective franchisees that are familiar to the franchise business format and willing to adopt the franchise system is crucial to the long-term success of the franchise system.
Originality/value – This paper cross-fertilises literature of organisational learning and franchising and evaluates the interplay of prior knowledge, cultural distance and international franchise recruitment. The findings provide further evidence on the mixed influences of prior knowledge on international franchise partner recruitment, and caution firms to critically evaluate their prior knowledge in international expansion. The findings also contribute to the understanding of franchise partner selection and recruitment, and bring in new addition to the body of existing franchising literature which largely examines the operations of the franchise system. 

Keywords: Culture, Explicit knowledge, Franchising, Recruitment, Tacit knowledge 

Article Type: Research paper 

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