Retail network organizational design and financial performance

Abstract

Building on the exploration–exploitation–ambidexterity perspective as a broad theoretical framework, the overall objective of this chapter is to contribute to a better understanding of the impact that different mixes of organizational forms have on performance in a retail setting. Four organizational forms are considered: (1) the plural form; (2) the dual form associating company-owned stores and shop-in-shops; (3) the dual form associating franchised stores and shop-in-shops; and, finally, (4) the combined form associating company-owned stores, franchised stores and shop-in-shops. These organizational design–performance relationships are tested on a sample of 170 French fashion retail networks. The results show that (1) none of the pure or dual forms tended to generate better financial performance than any other; (2) combining company-owned units, franchised units and shop-in-shops tends to generate better financial performance compared to dual and pure forms, up to a certain point.