Determinants of Knowledge Transfer Strategy in Franchising : Integrating Knowledge-based and Relational Governance Perspectives

This study presents an integrative model on the franchisor's choice of knowledge transfer strategy by deriving hypotheses from the knowledge-based theory and the relational governance view. First, based on the knowledge-based view, tacitness of system-specific knowledge influences the choice of the knowledge transfer strategy of the franchisor. The higher the degree of tacitness of knowledge, the more knowledge-transfer mechanisms with a high degree of information richness (HIR) are used, such as training, seminars, visits and formal meetings, and the more likely the franchisor chooses a personalization strategy (P-S). Conversely, the lower the degree of tacitness of system-specific knowledge, the more knowledge transfer mechanisms with a low degree of information richness (LIR) are used, such as reports, emails, intranet, databases, and the more likely the franchisor chooses a codification strategy. Second, based on the relational view of governance, trust influences the choice of knowledge transfer strategy of the franchisor. If trust reduces relational risk, more trust reduces the franchisor's use of HIR-knowledge transfer mechanisms and increases the franchisor's use of LIR-knowledge transfer mechanisms. If trust increases knowledge-sharing between the network partners, it increases the franchisor's use of both HIR- and LIR-knowledge-transfer mechanisms. The hypotheses are tested by using data on the use of the P-S in the Austrian franchise sector. The data provide some support for the hypotheses. A new model on the franchisor's choice of knowledge transfer strategy, using knowledge-based theory and relational view of governance is developed, and specifically, the knowledge- based view of Windsperger and Gorovaia is extended by considering trust as additional explanatory variable of the knowledge-transfer strategy