Management Contracts and Franchising: A Two-Study Examination of Non-Equity Entry Mode Choice in the Hotel Sector
type: CreativeWork
description: This thesis examines the non-equity entry mode decisions of international hotel organisations. To date, relatively few studies have examined entry mode choice in the context of the service sector as compared with that of the manufacturing sector, and fewer still have considered it in the context of the hotel industry. Moreover, studies focused on the choice between equity and non-equity entry modes by far outnumber studies focused on the choice between different non-equity modes. This gap needs to be filled because the majority of the entry modes used in the international hotel industry are non-equity in nature. This thesis presents empirical research based on the theoretical foundation of new institutional economics on the choice between non-equity entry modes in the hotel industry – specifically on the choice between franchising and management contracts, known as asset-light modes by practitioners. Moreover, to the knowledge of the author, this is the first thesis to gather both qualitative and quantitative primary data from hotel executives who are at the strategic level as opposed to from hotel general managers or other operational-level employees in the hotel industry. This thesis comprises two studies, each with its own literature review. Study 1 is qualitative in nature, with in-depth semi-structured interviews conducted with eight hotel executives. The primary objective of this study was to empirically examine which of the predominant theories of new institutional economics are the most appropriate for examining the specific choice between franchising and management contracts when internationalising a hotel or hotel chain. Transaction cost economics and the resource- based view emerged as the most appropriate theories, according to the executives interviewed. Specifically, the executives suggested that the considerations of asset specificity from transaction cost economics and imperfect imitability from the resource- based view are important in the decision.…
abstract: This thesis examines the non-equity entry mode decisions of international hotel organisations. To date, relatively few studies have examined entry mode choice in the context of the service sector as compared with that of the manufacturing sector, and fewer still have considered it in the context of the hotel industry. Moreover, studies focused on the choice between equity and non-equity entry modes by far outnumber studies focused on the choice between different non-equity modes. This gap needs to be filled because the majority of the entry modes used in the international hotel industry are non-equity in nature. This thesis presents empirical research based on the theoretical foundation of new institutional economics on the choice between non-equity entry modes in the hotel industry – specifically on the choice between franchising and management contracts, known as asset-light modes by practitioners. Moreover, to the knowledge of the author, this is the first thesis to gather both qualitative and quantitative primary data from hotel executives who are at the strategic level as opposed to from hotel general managers or other operational-level employees in the hotel industry. This thesis comprises two studies, each with its own literature review. Study 1 is qualitative in nature, with in-depth semi-structured interviews conducted with eight hotel executives. The primary objective of this study was to empirically examine which of the predominant theories of new institutional economics are the most appropriate for examining the specific choice between franchising and management contracts when internationalising a hotel or hotel chain. Transaction cost economics and the resource- based view emerged as the most appropriate theories, according to the executives interviewed. Specifically, the executives suggested that the considerations of asset specificity from transaction cost economics and imperfect imitability from the resource- based view are important in the decision.…
author: Kruesi, Michael Alexander
keywords: Hotel chain internationalisation, Non-equity entry modes
date published: 2015
date modified: 2026-07-27T18:46:23Z
provider: AUT University
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: AUT University