The upper echelon effect on restaurant franchising: the moderating role of internationalization

Won Seok Lee (Department of Tourism and Recreation, Kyonggi University, Suwon, Republic of Korea)
Choongbeom Choi (William F. Harrah College of Hotel Administration, University of Nevada, Las Vegas, Nevada, USA)
Joonho Moon (Department of Tourism Administration, Kangwon National University, Chuncheon, Republic of Korea)

International Journal of Culture, Tourism and Hospitality Research

ISSN: 1750-6182

Publication date: 5 March 2018

Abstract

Purpose

This study aims to investigate how upper echelon theory accounts for franchising by selecting the top management team to proxy for the upper echelon and using age, tenure, education, equity ownership and stock options as its main attributes.

Design/methodology/approach

The sample was drawn from the Execucomp and Compustat databases and from other publicly accessible resources (e.g. LinkedIn and Business Week, in addition to Annual 10-K reports). A total of 29 restaurant companies were used for data collection, which covered the period of 2000-2013. A panel feasible generalized least squares (FGLS) regression was used to analyze the data.

Findings

The study found a significant moderating effect of the degree of internationalization on the relation between the attributes of the upper echelon (e.g. tenure, education and share ownership) and franchising decisions.

Research limitations/implications

The results verified that top managers in the restaurant industry with more tenure and share ownership become more risk averse when they operate under riskier conditions, whereas highly educated restaurant top management teams tend to take more risks in strategic decision-making.

Originality/value

This study expanded internationalization research to upper echelon theory and into the arena of franchising.

Keywords

Acknowledgements

This work was supported by Kangwon National University Research Grant 2016.

Citation

Lee, W.S., Choi, C. and Moon, J. (2018), "The upper echelon effect on restaurant franchising: the moderating role of internationalization", International Journal of Culture, Tourism and Hospitality Research, Vol. 12 No. 1, pp. 15-28. https://doi.org/10.1108/IJCTHR-05-2017-0055

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

To read the full version of this content please select one of the options below

You may be able to access this content by logging in via Shibboleth, Open Athens or with your Emerald account.
To rent this content from Deepdyve, please click the button.
If you think you should have access to this content, click the button to contact our support team.