Toward a Dimensionalization of Governance Structure: The Positioning of Franchising

Abstract

This paper tests the applicability of four distinct marketing channel systems suggested by McCammon by determining if three vertically integrated channel systems and a conventional system are distinct along selected dimensions proposed byWilliamson's transaction cost theory and Macneil's relational exchange theory. The resulting hypotheses are empirically tested employing survey data from the replacement tire industry. The empirical results generally support the idea that alternative governance structures are associated with different demographic characteristics, different levels of transaction specific investments and dimensional structures. However, the extent to which modes of governance differ depends on the dimensions under consideration. Thus, the findings suggest the dimensional structure of alternative governance modes are more complex than initially proposed by this study.