Realising plural-form benefits in international hotel chains

Tourism Management 33 (2012) 580e591

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Tourism Management journal homepage: www.elsevier.com/locate/tourman

Realising plural-form benefits in international hotel chains Maureen Brookes a, *, Angela Roper b a b

Business School, Oxford Brookes University, Gipsy Lane Campus, Headington, Oxford OX3 0BP, UK School of Management, University of Surrey, Guildford, Surrey GU2 7XH, UK

a r t i c l e i n f o

a b s t r a c t

Article history: Received 13 September 2010 Accepted 23 June 2011

There have been a number of synergistic benefits identified in domestic plural chains; those that comprise a mixture of company-owned and franchised units. This qualitative research investigates whether, and how, these synergistic benefits are realised within international plural chains. Through conducting a multiple case study of international hotel chains, the study makes a contribution to our understanding of the dynamics at work within plural organisations. The plural-form model is found to be of only partial relevance to international hotel chains and its potential benefits incompletely realised. Contributory factors include industry-specific factors, the use of multiple brands, the size of hotel chains and the possible lack of complementarity between more complex owned and franchised divisions. However, more importantly, the findings point to a relationship between managerial mindsets and the different organisational processes adopted and the impact this relationship has on enhancing or undermining plural-form advantages. Ó 2011 Elsevier Ltd. All rights reserved.

Keywords: Plural organisations International Hotel chains Franchise Organisational processes

1. Introduction The plural organisation, as defined by Bradach (1995), is one which comprises a portfolio of company-owned and franchised units. Prior to this seminal definition, a number of researchers had noted that many organisations, particularly within tourism industry sectors, were using both ownership and franchise market entry strategies. Early research efforts focused on explaining the rationale for using this dual distribution strategy (Bai & Tao, 2000) or determining the most appropriate mix of franchised versus company-owned units. More latterly however, researchers began to focus on the potential benefits to be gained from simultaneously employing these two modes (Cliquet & Croizean, 2002; Mitronen & Moller, 2003; Srinivasen, 2006) with numerous studies undertaken within hotel and restaurant chains. Despite the international nature of these industrial sectors, most research has been undertaken within a domestic context (Dant, Perrigot, & Cliquet, 2007). Those studies which have been internationally focussed have either compared the existence of the plural form across different countries (Dant et al., 2007; Perrigot & Cliquet, 2005) or the extent of the plural form in international versus domestic networks (Perrigot, 2008). To date, there appears

to be no published research that investigates whether all the benefits of the plural form, identified within domestic chains, are achievable within international chains. This paper attempts to fill this gap by investigating whether, and how, plural-form benefits can be realised in international hotel chains. The latter provide a suitable context for the research given their long history of operating internationally using mixed market entry modes (Litteljohn, Roper, & Altinay, 2007). Furthermore, through reporting findings from a qualitative study, the paper answers calls for research which examines the plural form more closely (Ehrmann & Spranger, 2005a) and which documents the possible synergies in plural organisations (Combs, Ketchen, Shook, & Short, 2011). The paper begins with a review of the extant literature to identify the benefits of the plural organisation form and how these are realised in domestic chains. It then reviews international empirical studies to reveal current knowledge gaps. The existence of the plural form within international hotel chains is explored before the methodology is explained and the findings presented. A number of managerial implications is identified through the study and these are highlighted in the conclusion. 2. The plural organisation and its benefits

* Corresponding author. Tel.: þ44 1865 483893; fax: þ44 1865483878. E-mail addresses: [email protected] (M. Brookes), [email protected]. uk (A. Roper). 0261-5177/$ e see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.tourman.2011.06.013

Research into the plural organisation began with investigations that sought to explain the rationale for using a mix of companyowned and franchised units. The majority of early efforts was

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underpinned by the theory of ownership redirection, first proposed by Oxenfeldt and Kelly (1968e1969), and sought to determine whether franchised units were likely to become company-owned units over the life of the franchise system (Anderson, 1984; Brickley & Dark, 1987; Caves & Murphy, 1976; Dant, Kaufmann, & Paswan, 1992; Dant, Paswan, & Standworth, 1996; Hunt, 1973; Thompson, 1992). Baker and Dant (2007) report from their extensive literature review that researchers adopted a wide range of theoretical perspectives to examine ownership redirection from a unit-level perspective (applying agency or transaction cost theory) or at the strategic level (applying theories of resource constraint, signalling or property rights). On the basis of their review, the authors conclude that research on ownership redirection is ‘characterised by inconsistent and contradictory results’ (p. 17). Research on the plural form continued, albeit from different theoretical perspectives, underpinned by two key questions; what mode should be used in which market? (e.g. franchise or ownership), and given the existence of mixed modes what is the best configuration within a chain? However, researchers observed that there appears to be no conclusive answer to the first question (Dnes & Garoupa, 2005; Milgrom & Roberts, 1992) thus reiterating Bradach and Eccles (1989) who emphasised that the choice is principally linked to the vagaries of circumstance. Furthermore, merely interpreting the choice of entry strategy for a given site as a rational response illuminates little about the dynamics at work in such structures (Cliquet & Croizean, 2002). Hence researchers sought to answer the second question as to the optimum mix of franchised and owned units with varying results (Shane, 1998). Lafontaine and Kaufmann’s (1994) US multi-sector study revealed that the proportion of franchise units increases in relation to the age, growth rate and geographic dispersion of the chain. Sen (1998) identified that a chain’s mix of franchised versus companyowned units was influenced by its past growth strategy in his study of US restaurants. In contrast, within the same research context, Dahlstrom and Nygaard (1999) determined that the optimum combination is related to the operating system and new product development within the chain. From their French cosmetic retail study, Cliquet and Croizean (2002) concluded that those plural forms that work best are those with a low proportion of companyowned outlets (10e15 percent) and that chains which go beyond this ratio are likely to run into trouble. However Penard, Raynaud, and Sassier (2003) identified in their French study that chain efficiency depends on the correct balance of royalty rates from franchisees, and that franchise chains which have a high brand name value have higher levels of ownership. Lafontaine and Shaw (2005) also found a correlation between high brand value and levels of ownership in their North American multi-sector study. They concluded that experienced franchisors maintain a stable level of ownership, but the targeted rate varies across different chains and different industry sectors. Perrigot’s (2006) French study revealed that service franchisors use less company-owned outlets than retail franchisors. Within a similar research context, Barthelemy (2008) concluded that chains should have a lower proportion of franchised units when brand name value and business practice tacitness are high. Other researchers have identified the optimum proportion of franchised to company-owned units within plural chains as between 67% and 91% (Ehrmann & Spranger, 2003; Juste, Lucia-Palacios, & Polo-Rendondo, 2009), although Perrigot, Cliquet, and Piot-Lepetit (2009, p. 278) concluded from their French hotel chain study that ‘no universal threshold exists’ for the plural form. While the answer to the second question therefore remains ambiguous, what these studies did do is consistently point to the potential benefits to be gained through the use of the plural form and these are examined in the following section.

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2.1. Benefits of the plural form Although researchers recognised the potential complementarity of different market entry mechanisms (Azevedo & Silva, 2001; Bradach & Eccles, 1989; Harrigan, 1984), it was the acceptance of the plural form as a stable, rather than transitory state in mature franchise networks (Baker & Dant, 2007; Dant & Kaufmann, 2003; Ehrmann & Spranger, 2003; Penard et al., 2003) that focussed research attention on their purported benefits. Table 1 synthesises the wealth of research on the plural form underpinned by different theoretical perspectives and research contexts and categorises these into three key areas; chain growth, control, and adaptation and renewal. The first categorisation depicted in Table 1 relates to chain growth which Bradach (1997) labels as an additive benefit. The use of two market entry modes enables chains to grow more rapidly by overcoming resource constraints and by allowing a chain to match specific market opportunities to franchised or owned units (Affuso, 2002; Bradach, 1995, 1997, 1998; Cliquet & Croizean, 2002). However, Ehrmann and Spranger (2003) concluded that chain growth is not a key rationale for adopting the plural form. The second category of benefits relates to the control of the franchise chain. Empirical studies have identified that the plural form improves cost control and profit maximisation (Brickley & Dark, 1987; Hennart, 1993; Juste et al., 2009; Lewin-Solomons, 1999; Penard et al., 2003), often through improved information gathering and feedback (Heide, 2003; Lafontaine & Kaufmann, 1994; Michael, 2000; Sen, 1998) and its impact on decision making rights (Hendrikse & Jiang, 2005). Control is also improved through the competitive element introduced between the two types of organisational forms (Bradach, 1997, 1998; Ehrmann & Spranger, 2005c; Mols, 2000), reducing problems associated with opportunistic behaviour (Affuso, 2002; Kidwell & Nygaard, 2010). Concept control (Cliquet, 2000; Cliquet & Croizean, 2002) is achieved through organisational stability (Dant & Kaufmann, 2003; Lafontaine & Shaw, 2005) or via efficiency gains (Barthelemy, 2008; Botti, Briec, & Cliquet, 2009; Ehrmann & Spranger, 2005a; Kalnins & Mayer, 2002; Kranz & Lewin-Solomons, 2008; Perdreau, le Nadant, & Cliquet, 2010; Perrigot et al., 2009; Srinivasen, 2006). Cooperative relationships have also been found to play a role in maintaining control (Ehrmann & Spranger 2005b; Gillis & Combs, 2009). Control benefits therefore relate to both financial and quality control. As Michael (2000) advises, quality in this context refers to both product quality as well as adherence to the franchisor’s operating procedures and standards. Chain adaptation and renewal is the third category of benefits identified in Table 1. Previous research has demonstrated that the plural form helps to enhance innovation within chains (Bradach, 1997, 1998; Cliquet & Croizean, 2002; Cliquet & Nguyen, 2003; Dant & Kaufmann, 2003; Ehrmann & Spranger, 2005c; Lafontaine & Kaufmann, 1994; Sorenson & Sorensen, 2001), although some researchers suggest that innovation is dependent on the actual composition of the plural form (Dahlstrom & Nygaard, 1999). Innovation is required for chain renewal to ensure sustainability over its life cycle and to maintain a competitive advantage (Morrison, 2000). There is also a tension between adapting the franchise concept to be responsive to local market demands and maintaining sufficient control to protect brand uniformity and integrity (Sorenson & Sorensen, 2001; Weaven & Frazer, 2007), particularly in international franchise systems (Cox & Mason, 2007). Previous research has identified that plural forms are better able to adapt and respond to local market demands than purely franchised or purely owned chains (Bai & Tao, 2000; Bradach, 1997, 1998; Perrigot et al., 2009). While the research findings depicted in Table 1 provide some indication of how these three categories of benefits are achieved

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Table 1 Plural-form benefits identified through empirical studies. Plural-form benefit

Research findings

Study context

Indicative author

Chain growth

Overcomes resource constraints and effects rapid market penetration Enables both parties to grow e owner and franchisee

US fast food restaurant chains

Bradach, (1995, 1997, 1998)

UK service, hospitality and retail chains French cosmetic retail chains

Affuso (2002)

US multi-sector study

Brickley and Dark (1987)

Development of a comparative institutional model US fast food chains

Hennart (1993)

Development of a theoretical model Spanish retail chains US multi-sector study

Penard et al. (2003)

US restaurant chains

Sen (1998)

US restaurant chains

Michael (2000)

Plural governance structures in purchasing relationships Development of model from an incomplete contracting perspective US fast food restaurant chains

Heide (2003)

Independent and producerowned distribution channels UK service, hospitality and retail chains

Mols (2000)

US multi-sector study

Ehrmann and Spranger (2003, 2005c)

Development of a strategic deviance model French multi-sector study including hotel, bakery and cosmetic industries French cosmetic retail chains

Kidwell and Nygaard (2010)

Facilitates rapid development and territory coverage through complementarity Chain control Cost control and profit maximisation

Feedback and information

Minimises principal-agent costs as franchisors can choose the form that best suits the location in relation to monitoring and free riding. Minimises costs through mix of franchise and companyowned outlets Generates cost savings and improves trust amongst chain members Economises on monitoring costs through co-existence of franchised and company-owned units Controls monitoring costs and incentives Facilitates policy and standards development through company-owned units; franchisees provide objective feedback on policy Facilitates gathering information about markets and training through company-owned units Weakens franchisee power through information and credible commitment Reduces information asymmetry problems Alleviates incentive conflicts through pattern of decision rights under dual structure

Induces competition and allows benchmarking

Concept control

Stability

Efficiency

Relationship management

Adaptation and renewal

Improves control by introducing a level of competition between different types of units Induces competition resulting in higher powered incentives and provides better information Achieves a solution of potential moral hazard and adverse selection problems by providing a trade off between risk insurance and incentives in the presence of uncertainty and asymmetric information Helps to signal trust and level diverse interests and establish performance benchmarks across different types of units which improves quality Manages opportunism through internal quasi markets and social comparison mechanisms Achieves greater economic efficiency and balances chain growth with concept control Achieves greater economic efficiency and balances chain growth with concept control Affords greater control which is valued by franchisors Maintains a stable level of corporate control and ownership over time and helps franchisors to manage their portfolio Facilitates achieving economies of scale Improves profitability as company-owned units compensate for losses from franchising Leads to greater efficiency (in certain conditions) through eliminating problems with vertical integration or market governance Improves chain performance Improves efficiency if uniform standards require activities to be the same in both company-owned and franchised units, then company-owned stores work as a commitment device to select more efficient activities Achieves greater efficiency than either wholly-owned or wholly-franchised chains Realises greater technical and scale efficiency Enhances performance in young franchisors with high human capital with higher proportions of franchised units Creates a cooperative relationships as franchisors demonstrate a positive long term intent Strikes a balance between standardisation and innovation by developing resources that encourage knowledge sharing and aid in the development of trust

Cliquet and Croizean (2002)

Lewin-Solomons (1999)

Juste et al. (2009) Lafontaine and Kaufmann (1994)

Hendrikse and Jiang (2005)

Bradach (1997, 1998)

Affuso (2002)

Cliquet (2000)

Cliquet and Croizean (2002)

US fast food chains US fast food and car rental chains US (Texas) hotel and pizza chains US owned restaurant chains

Dant and Kaufmann (2003) Lafontaine and Shaw (2005)

US restaurant chains

Srinivasen (2006)

French multi-sector study US fasts food chains

Barthelemy (2008) Kranz and Lewin-Solomons (2008)

French hotel chains

Botti et al. (2009)

French hotel chains European multi-sector study

Perrigot et al. (2009) Perdreau et al. (2010)

US multi-sector study

Ehrmann and Spranger (2005b)

North American multi-sector study

Gillis and Combs (2009)

Kalnins and Mayer (2002) Ehrmann and Spranger (2005a)

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Table 1 (continued ) Plural-form benefit

Research findings

Study context

Indicative author

Innovation

Increases innovation as franchisees provide source of new innovations and company-owned units provide platform for research and development Increases innovation and enables the viability of innovations to be tested Increases innovation as franchisees are source of innovative ideas for new product development but role played is dependent on percentage of franchise units in chain Promotes innovation through organisational learning and the exploration/exploitation paradox Achieves greater flexibility and adaptation of chain as company-owned stores can be used as test laboratories for innovations Achieves greater innovation through idea generation, testing and implementation Develops insights for new approaches to operational efficiency and new product development Accelerates innovation Achieves system-wide adaptation in response to changing markets through development of trust and cooperation Allows headquarters to balance the need for inducing the goodwill effort (the public good) and the benefit of capturing positive externality Improves innovation as company-owned units can be used as laboratories for innovation testing and training and controls brand diffusion and its extension and evolution

US multi-sector study

Lafontaine and Kaufmann (1994)

US fast food restaurant chains

Bradach (1997, 1998)

US restaurant chains

Dahlstrom and Nygaard (1999)

US restaurant chains

Sorenson and Sorensen (2001)

French cosmetic retail chains

Cliquet and Croizean (2002)

French retail and service industries US fast food chains

Cliquet and Nguyen (2003)

US multi-sector study US fast food restaurant chains

Ehrmann and Spranger (2005c) Bradach (1997, 1998)

Through the development of a multitask and multi-agent model French hotel chains

Bai and Tao (2000)

Adaptation and responsiveness

within the plural form, it was Bradach’s (1997, 1998) investigation of how US fast food chains achieve four key organisational goals of growth, uniformity, system-wide adaptation and local responsiveness that provided meaningful insight on how plural-form benefits are realised. 2.2. Achieving plural-form benefits Cliquet and Croizean (2002, p. 240) suggest that Bradach’s work transformed ‘the classic vision of the relationship between franchising and company-owned systems’. As noted above, Bradach (1997, 1998) argued that chain growth is enhanced through the additive process. In addition to this, Bradach’s (1997, 1998) found that his sample chains used one set of organisational processes within franchised divisions and a different set within the companyowned units. He argued that using these two sets of organisational design processes gives rise to a third or ‘plural’ organisation process that creates synergistic benefits for the chain, thereby better enabling them to achieve their goals. The model forwarded by Bradach (1997) is adapted in Table 2 to illustrate the key plural processes used for linking the different organisational arrangements of franchise and company ownership. These manifest themselves as processes of modelling, ratcheting, socialisation and mutual learning and allow for the simultaneous attainment of uniformity and adaptation across the chain. As such, they help plural forms to realise the benefits identified in Table 1. Modelling occurs when franchisees replicate their structures on those of the company-owned hierarchy, particularly when franchisees own multiple units (Bradach, 1995, 1997, 1998). Modelling helps chains to overcome control problems normally associated with franchising as franchisees replicate company-owned policies and practices. As such it enhances financial and concept control and increases the stability of the chain (Cliquet & Croizean, 2002; Dant & Kaufmann, 2003; Lafontaine & Shaw, 2005). Ratcheting involves the use of benchmarks where the performance of one type of arrangement is used to set targets for the other (Bradach, 1997, 1998; Mols, 2000). An element of competition is introduced through ratcheting which increases the information shared

Dant and Kaufmann (2003)

Perrigot et al. (2009)

across the chain and serves to increase efficiency (Affuso, 2002; Ehrmann & Spranger, 2003). The plural process of socialisation involves the movement of people from franchise to companyowned units and vice versa which improves the information and feedback between the different organisational forms, thereby supporting financial and quality control (Bradach, 1997, 1998; Kidwell & Nygaard, 2010). It also supports the final plural process of mutual learning which facilitates adaptation and renewal. In this process, new innovative product and process ideas are drawn from franchisees but tested within company units to ensure financial viability (Cliquet & Croizean, 2002; Dahlstrom & Nygaard, 1999; Lafontaine & Kaufmann, 1994; Perrigot et al., 2009). When new innovations are generated within the company-owned units, franchisees are reported to perform a more rigorous and critical review of those innovations to ensure their

Table 2 Plural processes. Design Feature

Company

Plural-form process

Franchise

Structure

Hierarchy

Modelling process

Federation of minihierarchies

Organisation processes for control

Budget, MIS, authority

Ratcheting process

Incentives, contracts, and persuasion

Organisation processes for coordination

Ascend hierarchy

Socialisation

Business builders and small business owners

Organisation processes for communication and decision making

Centralised Mutual learning process expertise

(Adapted from Bradach, 1997, p. 283).

Local experience

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viability and market acceptance (Bradach, 1997, 1998; Cliquet & Nguyen, 2003). Through the plural process of mutual learning, chains are better able to achieve both adaptation and renewal and through all four plural processes chains are able to realise pluralform benefits. Building on Bradach’s work, Cliquet (2000) investigated plural forms and plural processes in French hotel, bakery and cosmetic industries through research commissioned by the French Federation of Franchising. Overall, he found that Bradach’s model could only partially be verified for mature chains, but with some exceptions for different sectors. For example, limited concept hotel chains remained in company arrangements and changed only when they went international. Cliquet (2000) is critical of the original plural model suggesting that: 1. It is difficult to generalise in terms of industry and time (it is too static). 2. Certain aspects are not emphasised (e.g. the strategic and the cultural e symbiosis between directors’ mentalities, unit managers and the context). However, he concluded that these criticisms are perfectly normal, given that Bradach examined only a limited number of very large mature companies in the same industrial sector. However, Cliquet’s (2000) study did suggest that chains, at least in the hotel industry, adopt plural forms as they expand internationally. Subsequent studies began to investigate plural forms in an international context and these are reviewed in the following section.

2.3. The plural form in an international context Although limited, there have been empirical studies that have examined plural chains within international contexts. In these studies, researchers began to conceptualise and measure plurality by the proportion of company-owned (Dant et al., 2007; Penard et al., 2003; Perrigot, 2008) or franchised units within chains (Perdreau et al., 2010). Much like early domestic studies, most research efforts focussed on the existence and configuration of the plural form. Penard et al. (2003) concluded from their study of 745 French chains that those with an international presence had a higher proportion of franchised units and thus were less plural. Similarly, in a comparative study of the plural form in France, Brazil and the US, Dant et al. (2007) determined that despite US chains having the highest level of internationalisation; the occurrence of the plural form was less than in France or Brazil. Perrigot’s (2008) subsequent research exploring the link between the plural form and internationalisation within US and French chains, supported these findings. Furthermore, Perrigot (2008) concluded that the plural form rate for international networks was lower than that for domestic networks and that there was a negative impact of internationalisation on the plural form (e.g. the proportion of companyowned units decreased). It was only in a recent European study examining the proportion of franchised units in international plural chains, where a potential performance benefit was identified (Perdreau et al., 2010). A gap still remains in our understanding of whether all the potential benefits accrued to domestic plural chains can be achieved in international plural chains. This paper therefore attempts to further develop our understanding of the synergies of the plural form and respond to calls for further research using primary data gathered across different country and cultural settings (Baker & Dant, 2007; Barthelemy, 2008). The following section explores the occurrence of the plural form in the international hotel industry in order to justify the research context.

3. The plural form in the international hotel industry Bradach (1998, p. 5) advocated that ‘the first indication of the plural form’s significance is found in a survey of the structure of chain organizations’. Within the hotel industry a chain is defined as ‘Organisations which comprise two or more hotel units operating under a system of decision making permitting coherent policies and a common strategy through one or more decision making centres and in which the hotel units and corporate functions are linked to add value to each other by ownership or contractual relationships’ (Peng, 2004, p. 243) Research suggests that the plural form has been in existence in international hotel chains for quite some time (Dunning & McQueen, 1981; Todd & Mather, 1999). Evidence of the plurality of hotel chains has also been identified through the Hotels Magazine annual survey of the 325 largest hotel chains in the world. For example, in the survey published in 2009, seven out of the largest ten chains comprised franchised and company-owned units as Table 3 illustrates. More recently, one has witnessed a strategic reorientation of the major hotel chains as they have chosen to implement ‘asset-light’ growth strategies through the addition of franchise units at the expense of company-owned units. This ‘shift away from hotel assets towards fee business’ has been identified in US multinational chains (Bender, Partlow, & Roth, 2008, p. 225) and within Europe (Slattery, Gamse, & Roper, 2008). Despite some researchers suggesting the hotel industry is ‘in transition’ (Whittaker, 2008, p. 648), chains still comprise owner-operated units, as well as franchised units within their portfolios. As such, the plural form appears to be a stable fixture within the international hotel industry, much like the industrial context used by Bradach (1997, 1998). While the latter’s sample included domestic restaurant chains with a range of 26e65% company-owned units, the mix employed by the largest hotel chains in Table 3 ranges from 15% to 75% company-owned and operated. However, unlike researchers investigating the international plural form, Bradach (1997, 1998) did not suggest that proportionality was a definitional issue. This study adopts this original interpretation of the plural form but seeks to contribute to our understanding by answering the following research questions: 1. Are all plural-form benefits realised in international chains and if so, how? 2. Is the plural-form model therefore relevant to international hotel chains?

Table 3 The mix of company and franchise units in the largest hotel chains, 2010. World rankinga

Hotel chain

1

Intercontinental Hotel Group Marriott International Hilton Hotels Corp. Accor Starwood Hotels and Resorts Worldwide Carlson Hospitality Worldwide Global Hyatt Corp.

3 4 5 8 9 10

Total unitsb

Total countriesb

Plural mix Company (%)

Franchise (%)

4400

100

15

85

3200 3500 4000 992

67 81 90 100

50 23 79 52

50 77 21 48

1059

77

38

62

434

45

75

25

Source: Company information. a Ranking according to total numbers of rooms (Hotels’ 325, 2009). b Approximate numbers quoted by companies.

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These questions form the basis of our enquiry, the methodology of which is explained below. 4. Methodology A qualitative multiple case study research strategy was adopted, similar to the research of Bradach (1995, 1997, 1998), Cliquet (2000) and Cliquet and Croizean (2002). This approach enabled us to add ‘flesh and bones’ (Patten & Appelbaum, 2003, p. 62) to the research by explaining organisations through the people that work within them, thereby building on the previous studies using secondary data or theoretical modelling. Qualitative studies are increasingly used within international franchise research so that a better understanding of operational issues can be determined (Doherty, 2009; Weaven & Frazer, 2007). As the research sought to determine whether and how plural-form benefits are achieved, a case study strategy was employed. Case studies have a distinct advantage when attempting to answer ‘how’ questions and are useful when the phenomenon is little understood and the dynamics of it need to be incorporated in the research (Yin, 2003). A multiple case study strategy was adopted to increase generalisability (Eisenhardt, 1989) A purposive sampling approach was used to identify a sample of cases rich in information about the research problem (Alam, 2005; Shaw, 1999). Starting with the Hotels survey, a potential sample of plural hotel chains that operate in at least five countries was identified. Five countries were deemed acceptable as this reflects the definition of a global hotel brand used by Todd and Mather (1999). Peng’s (2004) definition of a hotel chain was used to ‘bind the territory’ of the case (Miles & Huberman, 1994). Our approach therefore differs from other studies of hotel chains (Perrigot et al., 2009) where single hotel brands operated under the same corporate ownership were considered as separate chains. Primary data was collected using semi-structured key informant interviews; a practice frequently used in organisational studies as it provides an economical approach to gaining ‘global’ data on organisations (Bryman, 1994, p. 49). As in previous plural studies, the interview schedule was organised around pre-defined themes (Eisenhardt, 1989) to investigate organisation structure, and organisation processes for control, coordination, decision making, and communication as identified in Table 2. Particular emphasis was placed on determining how these organisational processes differed between franchised and company-owned units and what processes were undertaken to compare or integrate the different types of units and their organisational members. This approach therefore helped to ensure internal validity (Gibbert, Ruigrok, & Wicki, 2008). The interview schedule was piloted with two informants working within the corporate headquarters of one plural hotel chain, and following minor amendments, access was then negotiated to five further hotel chains which are within the recommended size range

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for multiple case studies (Eisenhardt, 1989; Miles & Huberman, 1994; Shaw, 1999). The five chains were responsible for a total of 15 different hotel brands between them at the outset of the study, the same as in Perrigot et al.’s (2009) research. The five sample chains operated 4394 hotels between them comprising 753,000 hotel rooms. 15 interviews were conducted by the authors in total, each up to 2 h in duration. For cross checking purposes (Yin, 2003) at least two interviews were held in each chain with senior executives at corporate headquarters responsible for strategy and development or marketing and distribution, and for operations management given their knowledge of how these functional areas operated across the chain and the different brands. Interviews were tape recorded for accuracy and transcribed. Triangulation was achieved through document review and archival analysis including the company organisation charts, brand standards, operating procedures, annual reports, press releases, internal memos, analyst and investor reports in order to increase construct validity (Gibbert et al., 2008; Riege, 2003; Yin, 2003). Replication logic was applied to each case for the purpose of external validity and reliability enhanced by following a case study protocol and maintaining all data within one database (Gibbert et al., 2008; Riege, 2003). Data was analysed using NVivo according to the ‘three concurrent flows of activity’ (Miles & Huberman, 1994, p. 16); data reduction, data display and conclusions drawing. Data reduction took place through both descriptive coding using the predetermined themes in the research instrument, and interpretive coding according to the emergent themes (Gibbs, 2004). Data was displayed by case study firm and by market entry mode in order to facilitate within and across case comparison. The extant literature was then used to draw conclusions from this study (Perry, 1998). 4.1. Plural forms in international hotel chains As plural forms, the case study chains varied in their size, number of countries of operations, and in their proportion of company-owned units. While they also varied in the number of years of operation, they were all mature, well-established chains. Table 4 provides details on these cases at the point of selection for the study, labelled only as A, B, C, D and E, as required for anonymity purposes. As the table suggests, there appears to be no correlation between the extent of internationalisation and the proportion of company-owned units as the most international case had 30% of its portfolio under company ownership and the next most international had 80%. Despite their differences, the cases all operated two main structures or divisions for company-owned and franchised units simultaneously, although in Case E the franchise structure was a relatively recent development. Compared to previous plural-form studies however, the operating divisions were more variable in their

Table 4 The mix of company and franchise units in the research sample. Hotel chain

A B C D E

HQ

Europe North America Europe North America Europe

Years operating

60þ 40þ 60þ 100þ 40þ

Total countriesa

100 61 70 5 38

(Source: Company documents at sample identification, January, 2003). a Approximate numbers quoted by companies. b Company owned, leased or managed. c Franchised or master franchised.

Total brands

5 5 2 2 1

Total unitsa

3063 723 384 114 110

Total rooms

491,000 127,500 64,500 41,000 29,000

Plural mix Companyb (%)

Franchisec (%)

30 20 80 68 78

70 80 20 32 22

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composition. Company-owned divisions included hotel units that were directly or partially owned, leased, or operated under management contract for a third party owner. Informants revealed that these different models were all operated under a single hierarchal arrangement. Franchised divisions comprised units that were individually franchised and those that were operated under master franchise agreement. Master franchise agreements differ from individual franchise agreements as they entitle the franchisee the rights to open franchised units and to grant these rights to third parties as a sub-franchisor usually over a defined geographical territory (Quinn & Alexander, 2002). The two divisions displayed significant design differences in terms of formality as well as the organisational processes for control, coordination, decision making and communication. Within the franchised division there were further differences in the processes used for individual and master franchisees. The divisions were perceived by informants to be very different. As one informant suggested, these are ‘distinct and separate structures’ and the divisions ‘haven’t really been pushed together particularly well’. The rationale for the different divisions is that each division requires ‘distinct and separate skill sets’ by those who manage them. As one informant explained, ‘the nature of the support is much more consultative on the franchise side and you can handle a lot more things because it is a lot less in depth, . on the management side those people are totally responsible for the day-to-day operations’. Other informants supported this perspective, suggesting that ‘when you are franchised you don’t have the same number of contacts as a managed company’ as you needed to be ‘way more accountable’ in company-owned divisions. Within the franchised structure, however, the relationship with master franchisees was seen to be different because they were more like ‘strategic alliances’ and therefore there is ‘a different set of expectations that you have to manage’.

There were mixed views however, on the complexity of running the different divisions. Some informants reported that these plural forms are ‘complicated’ and often ‘very confusing’ to run as each design is ‘run a little differently’. Another suggested that these differences created a ‘complication or a complexity, but it is not an issue’. A further informant explained that there ‘isn’t much confusion on a day-to-day basis, but it causes problems from a decision making point of view at the top level’. The findings also reveal that these design differences have an impact on the plural-form benefits achievable in international hotel chains. Table 5 depicts the design differences and the following sections identify the impact of these design processes on the plural-form benefits achieved. 4.2. Plural benefit one: chain growth The study reveals that the use of mixed entry modes enables international hotel chains to achieve faster growth by enabling them to take advantage of opportunities available in different regions. As one CEO explained, expansion was, ‘not restricted by geographical boundaries, not limited by narrow strategies’. Another informant suggested that ‘in building brands we adopt different operating and ownership models as appropriate’ and another, ‘we’ll look at really anything that makes sense to us’. However, the findings also reveal that in choosing particular market entry modes, decisions were frequently ‘opportunistic’ in nature, rather than strategic. As one informant explained, ‘If a guy in Tunisia comes up to us and says, “Look I’d love to work with you, can I do this, this and this?” and it looks good financially, why not?’ Another suggested, ‘people always make this a strategy, the biggest strategy in the hotel business, but at the end of the day there is a lot of opportunistic development’. The findings also indicate that there is a need for flexibility to achieve desired growth rates. An informant explained that ‘where we fall out with an owner or we just can’t find an owner with whom we want to work, we will just underwrite a hotel to get

Table 5 Plural-form processes in international hotel chains. Design feature

Company

Plural-form process

Franchise

Structure

Hierarchy

No evidence of modelling process

Structure varied, no replication even in master franchisees

Organisation processes for control

Financial control: through budgeting; heavy reliance on reporting systems and corporate involvement at unit level

No evidence of ratcheting process

Financial control: Limited to contribution to revenue and development targets (in master franchisees)

Quality control: High level of formalisation and heavy reliance on diagnostic systems

Limited evidence of ratcheting process but driven by master franchisee

Quality control: High level of formalisation and heavy reliance on diagnostic systems; contractual controls also used. Diagnosis decentralised in master franchise agreements

Organisation Processes for Coordination

Wide range of varied coordination processes used within companyowned units (tasks forces, committees, conferences, e-chat rooms, management transfers)

Evidence of socialisation between company-owned and master franchised units only

Limited use of coordination mechanisms used with individual franchisees; Extensive use of coordination mechanisms in mature franchise agreements (task forces, functional committees, conferences, management transfers, interlocking directorates

Organisation processes for communication and decision making

Communication frequent but decision making reliant on centralised expertise

Limited evidence of mutual learning process

Communication between company-owned and individual franchisees limited; frequent and informal between company-owned and master franchisees Centralised expertise for strategic decisions concerning the brand; decentralised for daily operations in individual franchises; greater levels of decentralisation for decision making in master franchisees

M. Brookes, A. Roper / Tourism Management 33 (2012) 580e591

it done’. It was certainly the case that master franchisees in particular accounted for much of the growth in some of the chains. Informants reported that they would continue to rely on ownership and franchised market entry modes to achieve international expansion goals, however there was no defined or planned proportion identified across the sample. 4.3. Plural benefit two: control As Table 5 highlights, organisational structures and processes influence how financial and quality control are achieved across the two divisions. Both employed hierarchical structures, although the spans of control were much greater for franchised divisions given the ‘expectations’ and ‘accountability’ identified in the previous section. For example, in one case senior vice presidents in the company-owned divisions were responsible for seven hotels, but in the franchised divisions, they were responsible for up to 90 hotels. Informants suggested that within company divisions, ‘there is a hierarchy there, clearly and it’s got a backbone of steel about it, I don’t think you could run a plc any other way’. Other informants suggested these structures were highly ‘centralised’ and ‘bureaucratic’. Another informant explained that at the unit level, general managers get ‘appropriate autonomy’ with corporate level managers closely monitoring their performance. For example, one informant gave an example of financial control procedures, ‘I ask lots of questions every month about numbers, so they are accountable and answerable for numbers.I get involved and generally I would speak to my General Manager’s once or twice a week.’ Another concurred and identified that ‘the level of attention from up on high goes down to quite a low level in the organisation’. However, within the franchised structure, the focus of the financial control was limited to revenue contributions for individual franchises and additionally, for development targets for master franchisees. An informant summed up the situation accordingly, ‘We don’t have such good information on the franchised hotels, you know we have the ADR [average daily rate], occupancy, revenue and that’s pretty much it to be honest, because that is all we need. They are not interested in showing us how much money they are making.’ In both divisions, there is also a heavy reliance on formalisation and diagnostic systems to achieve quality control underpinned by brand and operating standards which are assessed frequently by internal and external auditors. One informant explained that within both divisions; ‘there are manuals of standards this thick about this is how you do [Brand X], and we will be coming to check’. Another suggested, ‘here are the standards, here’s what we expect, we are holding you accountable to produce these’. For both divisions protecting brand standards was deemed to be critical because ‘the brand is only as strong as its weakest link’. In company-owned divisions, managers of units that maintained standards were frequently rewarded for their achievements through performance related bonuses. However, within the franchised division, the monitoring of quality standards was likened to a ‘fairly hefty police job’. In these divisions contractual controls were also used to maintain quality standards and remove underperforming hotels. One informant reported that, ‘one of the reasons we are starting to cannibalise some of our weaker franchises and take over their operations is because we just can’t afford to have that much inconsistency in the brand anymore.’

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The study reveals there was little effort made to benchmark or make comparisons between the performance of the company and franchise divisions to improve financial and quality control. From a financial perspective, there was reported to be a ‘split between the two again in terms of what we can get and what we can’t’ which impacted on the chain’s ability to make any meaningful comparison. Another informant explained that comparisons would be meaningless as, ‘our franchised properties are spread out in so many different regions, they are so different’. Another suggested that the focus of control for franchised units was slightly different, ‘it’s a different set of drivers, you know, it’s how many locations, of what quality and what loyalty rates versus are we really making the most of this hotel’s location? Are we making the departments run effectively?’ Table 5 depicts some variation within the coordination, decision making and communication processes employed within these two divisions. Within the company structure there were far more coordination processes used to facilitate socialisation control. As one informant explained; ‘the benefit of socialising, networking, [is] sharing best practice. . We’ve got best practice databases, and they work quite well’. In contrast, it was reported that, ‘We have franchise meetings . we will sit down with them and present our strategies and thoughts for the future . they obviously get less day-to-day communication than a managed hotel.’ Another informant expressed similar approaches to communication explaining, ‘we don’t pick up the phone to them, to franchisees, absolutely not’ and another described the situation as one where ‘franchisees are definitely on the other side of the wall’ when it comes to communication. Informants further suggested that company employees often perceived franchisees as the ‘poor cousins’ who offered ‘inferior quality’ and were not always considered ‘trustworthy’. However, the study identifies that for mature master franchisees there appears to be more decentralised control procedures. Although financial control was restricted as with individual franchises, and there was still great emphasis on quality control, diagnostic mechanisms were devolved to master franchisees. Informants suggested that a ‘command and control mentality’ would not be appropriate and there was a need to ‘reach consensus, rather than instruct’. As a result, there was extensive use of informal coordination mechanisms and communication between the company and master franchisees. It was considered important ‘to get buy-in’ through participative decision making mechanisms and one informant summed the situation up accordingly, ‘We don’t just go: “here it is, you swallow it because we’re shoving it”. It’s very much done through relationships and showing what the benefits will be.’ Through the communication there was reported to be a limited amount of benchmarking. One informant reported that one of his master franchisees sent information on, ‘Complaints per 1,000 occupied rooms, guest satisfaction and intent to return, the prediction of advocates and defectors, he’s already there. He sends this stuff just because he wants us to see it.’ The rationale for this benchmarking was reported to be due to the underperformance of some of the franchisor’s individually franchised hotel units and the master franchisee was ‘busily screaming, “I am being hurt by some of the bad properties”’. In other words, the master franchisee was using benchmarking as a quality control mechanism, rather than the franchisor.

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The findings further reveal that through the coordination and communication processes employed in master franchise divisions a greater level of socialisation control was achieved than in other franchised arrangements. These organisational processes helped to build what informants identified as ‘relationships based on trust’. Informants also reported that when relationships and trust are developed, then informal codes of practice emerge which guided the behaviour of members of the chain.

the debates, ‘we have established a mutual freedom to interpret the brand and execute the brand within our areas of responsibility’. Another advised however, that both parties had to be ‘willing to change position as the case may be’ and recognise that ‘one size won’t fit all’ and that senior managers needed to ‘listen with the intent to understand’, not with the ‘intent to reply’. Through this approach, initiatives were reported to incorporate ‘grass root experiences from multiple markets’. However, informants were also adamant that there had to be ‘trust in the relationship’ for this approach to work as otherwise it might create ‘anarchy and chaos’.

4.4. Plural benefit three: adaptation and responsiveness There was very limited evidence of innovation or best practice emerging from franchised units and then being adopted throughout the chains. Only one informant identified that examples of best practice from franchisees are taken on board, however, this was limited to within one national market where, ‘We ask a property if we can use them as an example. We might use that as a case study and an example and in that way give it to another franchisee as a recommendation.’ Another suggested that they ‘find them [franchisees] useful in terms of acid testing what we are going to do’, however there were no clearly defined procedures in place for this to happen and on further probing, it was reported that this practice was used to help sell new initiatives to franchisees. In contrast, informants from other chains reported a distinct lack of interest in franchisee innovations or best practice. There was more of a focus on whether franchised units were, ‘Doing the things that we want them to do’. .[we] are not particularly focussed around “hey is there anything innovative going on around here? Are these guys doing something really interesting?”.’ It was recognised however that through this approach, ‘we probably miss a lot of innovation’, but that it was unlikely to have a major impact on the strategic growth of the chain. In addition, there was limited adaptation in response to local market conditions within the franchised structure. One informant reported, that the global brand standards manuals were ‘tweaked, but it is not great, it is still predominantly the US franchise manual’. Getting any changes made were reported to be ‘extremely laborious’ and the rationale behind this standardisation was the need to control the brands. As one informant explained, one franchise member ‘might think well if I change it here, I can change it there can’t I?’ and this would then have an impact on quality control. It was further suggested that ‘you have got to give the franchisee the confidence that they are buying into something virtually unchangeable so they can see what is going to happen to their money’. In other words, maintaining control of the brand was seen as fundamental to the continued expansion of the brand through further franchising. In contrast, there was greater evidence of sharing of best practice between company and master franchisees and mutual learning taking place. Informants identified that master franchisees adopted franchisor human resource and marketing initiatives and that a variety of master franchisee service concepts and guest handling techniques was adopted throughout the chain. This mutual learning was reported to be the result of ‘healthy debates about how things are done’ and ‘a very good exchange of information’. Another informant suggested that as the relationships between the chain and the master franchisee grew ‘it became more [the case] that ideas and proposals went both ways’. This communication also led to a greater degree of adaptation to local market demands. One informant suggested that as a result of

5. Discussion The study reveals that the plural form in international hotel chains, first identified by Dunning and McQueen (1981), continues to exist as in other industrial sectors (Perdreau et al., 2010). The indications from the study are that operating a chain using these different modes will continue to be a strategic choice. Slattery et al. (2008) contend that these mixed modes provide higher returns and faster growth for hotel chains and this study provides evidence of the latter. As such, it supports previous plural studies (Affuso, 2002; Bradach, 1995, 1997, 1998; Cliquet & Croizean, 2002) that identify the additive benefits of the plural form. However, this study suggests that the actual choice of which mode to use in particular markets is often opportunistic, which may impact upon the chain’s degree of plurality as defined in previous research (Dant et al., 2007; Penard et al., 2003; Perrigot, 2008). There appear to be situations where chains have little choice in whether they own or franchise if they are to realise their goals for international growth. In other words, in order to realise the additive benefits of the plural form, international hotel chains must be flexible in their choice and be willing to adapt to the vagaries of circumstances previously reported (Bradach & Eccles, 1989; Dnes & Garoupa, 2005; Milgrom & Roberts, 1992). Unlike earlier international studies (Dant et al., 2007; Penard et al., 2003; Perrigot, 2008), the research does not reveal a correlation between the extent of internationalisation, as measured by the number of countries of operation, and the extent of companyowned units. The proportion of company-owned units varied extensively in the most international hotel chains. Given that the two largest chains had the lowest level of company ownership, the study also questions previous research which identified that franchise chains with the highest brand name value have higher levels of ownership (Lafontaine & Shaw, 2005; Penard et al., 2003). However, the chains in this study had multiple brands within their portfolios which may explain these different results. Moreover, these findings are consistent with the characteristics of the largest hotel chains presented in Table 3, and seem to refute Perrigot’s (2008) conclusion that internationalisation has a negative impact on plurality. However, there are indications that, despite their maturity, the mix of company-owned and franchised units is still changing and the chains in this study might be moving towards a more stable plural mix. What the study does suggest is that for international hotel chains, a more apt definition of plurality is Bradach’s (1997) where the proportion of company-owned units is not a definitional constituent. Nonetheless, Bradach’s (1997) definition also appears to have some shortcomings when applied to international hotel chains. Company-owned hierarchic divisions comprise those units that are leased and operated, owned and operated, and operated under management contract and franchised divisions comprise individual and master franchise agreements. As such a more comprehensive interpretation of the plural form may be required for these complex organisational arrangements.

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This complexity is also apparent in the different organisational processes adopted. As with previous plural studies (Bradach, 1997, 1998; Cliquet, 2000; Cliquet & Croizean, 2002), there were different processes used within the different divisions, however, not all plural-form benefits identified in Table 1 were realised. This added complexity of the plural forms in this study may impact upon the complementarity of the plural form previously identified (Azevedo & Silva, 2001; Bradach & Eccles, 1989; Harrigan, 1984). Bradach (1997, 1998) identified that financial and quality control benefits are achieved through three plural processes of modelling, ratcheting and socialisation and further empirical studies supported these findings (for example, Ehrmann & Spranger, 2003; Kidwell & Nygaard, 2010; Mols, 2000). Bradach (1995, 1997, 1998) found modelling particularly evident in multi-unit franchises, however, in this study, there was no evidence of any modelling activities in either individual or master franchise agreements. Furthermore, little interest was shown in what individual franchisees were doing besides ensuring revenue contributions and the achievement of quality standards. There were strong arguments presented by informants as to why ratcheting (the use of performance benchmarks) was not employed. The arguments centred upon the lack of comparability between company-owned and franchised units, particularly across diverse and highly dispersed geographical markets. This study suggests therefore that the plural process of ratcheting, as conceptualised by Bradach (1997, 1998) for domestic chains, has less relevance in international chains. However, it also identifies that the highly centralised financial and quality control processes employed by the chains in the study undermined ratcheting attempts. In addition, the ‘carrot’ approach used for company-owned units versus the ‘stick’ approach used for franchised units for control purposes created further obstacles to the use of ratcheting. The study suggests therefore, that to some extent, international hotel chains are missing the potential for control and efficiency gains identified by Affuso (2002), Ehrmann and Spranger (2003) and Kidwell and Nygaard (2010). Furthermore these processes, as well as the centralised processes employed for communication and decision making, appeared to hinder the realisation of any control benefits through socialisation (Bradach, 1997, 1998; Kidwell & Nygaard, 2010) with individual franchisees. In fact, the study suggests that the centralised processes created perceptions of superiority in the companyowned units and of inferiority in the franchised units and even attitudes of franchisees not being trustworthy. This appears a dangerous and contradictory view of members who may represent the majority of a chain. However, these findings do provide some evidence in support of Cliquet and Croizean’s (2002: 239) argument of the ‘dynamics at work’ in the plural form, and that the current model does not emphasise the symbiosis between directors’ mentalities and unit managers (Cliquet, 2000). There did appear to be more evidence of the plural process of socialisation through the coordination, decision making and communication processes employed within master franchisees. A more trusting and equitable relationship was developed and as a result, greater control was achieved for the good of the whole chain. As such, previous studies which point to the relevance of relational management to plural-form benefits (Ehrmann & Spranger, 2005b; Gillis & Combs, 2009) are supported. Moreover, master franchisees were willing to share potentially confidential information so that a small amount of ratcheting did take place. In addition, these processes provided a platform for mutual learning, Bradach’s (1997, 1998) plural process for chain adaptation, innovation and renewal. In this study, mutual learning was identified as a two-way process between company-owned units and master franchisees, where innovations and testing went in both directions, further emphasising the equitable nature of these particular

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relationships in facilitating adaptation to local markets. Additionally, there was evidence of a greater degree of knowledge sharing in well-established, mature master franchise agreements, as in previous research in mature networks (Cliquet, 2000; Cliquet & Croizean, 2002) However, these researchers defined maturity according to network size and market saturation, rather than longevity as we have done in this study. In contrast, there was very little evidence of mutual learning from individual franchises and this appears to have been stifled through the centralised processes used for decision making and control, perceived necessary in order to protect the brand against free riding (Brickley & Dark, 1987). Mutual learning was also inhibited by the mindsets of company-owned members as discussed earlier. Consequently, unlike previous studies (Cliquet & Nguyen, 2003; Dahlstrom & Nygaard, 1999; Lafontaine & Kaufmann, 1994), ideas from franchisees were actively ignored in order to protect standardisation and uniformity across the chain. This finding highlights the substantial tensions involved in the achievement of plural-form benefits which may have been less obvious in previous studies that drew on secondary data. As such it provides further evidence of the limitations of the plural-form model noted by Cliquet (2000) and supports Fladmoe-Lindquist’s (2000) argument that collective learning is often an underutilised feature of a franchise system. 6. Conclusion The study sought to identify whether and how plural-form benefits were realised in international hotels chains and if the plural-form model was therefore relevant to these firms. The findings suggest that in international hotel chains, plural-form benefits are only moderately achieved. There may be a number of contributory factors which help to explain this finding. The industry sector investigated may be one factor, as previously identified (Cliquet, 2000; Cliquet & Croizean, 2002). The use of multiple brands within a single chain and the size of the chains involved may also be relevant factors that impact on the development of plural processes. Furthermore, the greater degree of complexity within international hotel chains may impact on the complementarity between owned and franchised divisions. Lastly, operating across national boundaries makes ratcheting difficult and requires a more opportunistic approach to market entry potentially impacting on the plural-form mix. However, the study adds to our understanding of the international plural form by identifying the impact of organisational processes for control, coordination, decision making and communication on the realisation of plural-form benefits. When these are highly centralised, the plural-form processes of ratcheting, socialisation and mutual learning are inhibited. While the need to control the brand is understandable, these processes can also stifle the development of any meaningful relationship between the members of different divisions, perpetuate perceptions of inferiority and mistrust, and further restrict the development of plural processes and their benefits. The study suggests therefore, that even if there is an awareness of plural-form benefits these may not be deemed desirable, let alone achievable. One potential reason for these mindsets could be that power remains in the hands of those with previous operational credibility (Dant et al., 1992), given their earlier dependence on company-owned units. In extending the definition of the plural form to include master franchising, the study also reveals that decentralised organisational processes help to facilitate the development of a more equitable and trusting relationship, which in turn, supports the realisation of the plural benefits of control and adaptation and renewal. In other words, master franchising allows for more relational benefits to be realised.

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The study also makes a contribution to our understanding of the dynamics at work within plural organisations, the relationship between organisational processes and managerial mindsets and the impact these have on the realisation of plural benefits in international chains. Whilst new plural benefits have not emerged, the study does illustrate the importance of symbiosis between managerial mentalities, unit managers and the context, an area which Cliquet (2000) suggested was lacking in the original plural-form model. Context also appears to be important in determining whether the plural form is relevant to international hotel chains as the study has illustrated that defining the plural form proportionately has limitations. In this industrial context, plurality does not appear as purely a strategic choice. Instead, external forces such as the need to access capital e either through capital markets or unit owners e appears to be pushing hotel chains to operate as plural forms. Furthermore, the complexity of international hotel chains identified in this study, suggest that Bradach’s (1997) seminal definition may need to be revised to reflect the reality of this industrial context. We conclude therefore that the plural form concept needs to be applied in an industrially specific way. As such, we would not wish to generalise our findings to other international firms, or other international hotel chains, where plural-form benefits may be much more achievable. Whilst not without its limitations, this multiple case study investigation has uncovered a level of organisational reality not previously identified and highlights potential implications for managers of international plural chains as a result. In the first instance, there is a need to consider whether current organisational processes for control, coordination, decision making and communication are stifling the development of plural processes and hence the realisation of plural-form benefits. Secondly, managers should consider whether, and the extent to which current mindsets underpin the organisational processes used. Finally, managers should consider the extent to which both organisational processes and managerial mindsets create barriers between different divisions and how these could be broken down to enhance organisational control and stimulate adaptation and renewal. While Bradach’s work remains seminal, further exploration of the plural form within different industrial settings and within international contexts is to be encouraged.

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