Abstract
Empowerment, defined as giving front-line, customer contact employees wide latitude to address customers’ needs, is frequently heralded as the solution to service quality. Franchise networks, by contrast, emphasize standardization to insure a common consumption experience over time and space. If customers engage with multiple units of a network, is standardization or empowerment preferred? This paper theoretically examines the contingency of customer decision rules, how customers aggregate service experiences across distinct points of service. A model is proposed that demonstrates that profitability is enhanced by empowerment when customers reward good service more than they penalize bad service, otherwise, standardization is appropriate. Implications for theory and practice are discussed, including a method for eliciting customer decision rules.
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Notes
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- 2.
Kaufmann and Eroglu discuss adaptation of the product or service, not empowerment directly. Their adaptation clearly requires changes to the product generated by empowered employees or franchisees.
- 3.
This problem of information impactedness is exacerbated by bounded rationality. As Simon (1979) has analyzed, humans are rational but only boundedly so.
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Note that we are aggregating across customer experiences within a network, not across product attributes of different networks.
- 5.
Customers may form their expectations using affect-based evaluation as well as attribute-based evaluation (Babin and Harris 2018). In other words, rather than a formal evaluation of quality, the customer judges based on emotion, impression, and mood. Regardless of how the underlying evaluation is formed (affective or attribute), the challenge of combining experiences across units remains. In particular, a more affect-based evaluation is likely to be one where customers remember the extremes, yielding effectively the brand image based on a best or worst case.
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Acknowledgements
The author wishes to thank Debra Cannon, Jim Combs, Don Fedor, Gerard Cliquet, Nick Petruzzi, Josef Windsperger, and two referees for helpful comments and suggestions, as well as participants at the International Society of Franchising Conference. Remaining errors are mine alone.
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Michael, S.C. (2023). Empowerment and Customer Decision Rules in Franchise Networks. In: Hendrikse, G.W., Cliquet, G., Hajdini, I., Raha, A., Windsperger, J. (eds) Networks in International Business. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-031-18134-4_8
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