Antecedents and Consequences of Channel Alienation: An Empirical Investigation within Franchised Channels of Distribution

Investigating an important overlooked phase of interorganizational relationship evolution, which is currently hypothesized to progress through five stages of awareness, exploration, expansion, commitment, and dissolution, this dissertation proposes that in the long road between commitment and dissolution, the quintessential interfirm relationship is likely to be characterized by aprolonged period of relationship alienation, which then becomes the immediate precursor to the dissolution stage. The dissertation utilizes social learning theory, behavior constraint theory, and alienation theory to explain apathetic behaviors of franchisees. The principal proposition is that certain characteristics of the franchise system’s operating environment inadvertently condition franchisee estrangement and failure, and the maladaptive behaviors persist even after environmental changes make success possible again. The dissertation proposes and empirically tests a conceptual model of franchisee alienation. Data from dyadic franchisee-franchisor relationships (N=185) across a wide variety of industries were obtained through a survey of franchisee organizations that were members of the Franchise Council of Australia (FCA). The results render support to the central hypothesis that franchisee alienation occurs as a result of the franchisee organization disconnecting its own actions from the outcomes of its interactions with the franchisor. Franchisee alienation is shown as a phenomenon that is extremely toxic for the franchise system as a whole, as the alienated franchisee is likely to engage in opportunistic behaviors, exhibits reduced productivity, and is inclined to litigate against the franchisor and to dissolve its relationship with the franchisor. On the basis of the findings, the dissertation offers a prescription in terms of the different strategies that can be used by the franchisor to prevent and combat franchisee alienation