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Entrepreneurial Processes of the Finnish Franchisee Training Program’s Graduates

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Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

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Abstract

The current study reports the results of the third and final phase of the longitudinal study on trainees of the Finnish franchisee training program. The study targeted the 46 respondents who in the previous phases indicated that they became either franchisees or self-employed in stand-alone businesses after graduation. The purpose of the study was to find out what factors influenced the respondents’ entrepreneurial decision-making processes and what role the training program played in these processes. Trainees’ entrepreneurial decision-making processes proved to be dissimilar. Some were pushed while others were pulled to entrepreneurship. The program was found to be a factor in the respondents’ entrepreneurial decision-making process, but its role and significance was seen differently. Logistic regression analysis was performed to discover what factors could be used to predict respondents’ likelihood of becoming franchisees or self-employed. Findings of the study provide implications for both franchisors and potential franchisees as well as for organisations planning and offering entrepreneurship training.

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Notes

  1. 1.

    Literature review on entrepreneurship education and training and its effectiveness is presented in the article (Torikka 2007) that reports the results of the second phase of the longitudinal study.

  2. 2.

    The study was carried out in Finland, which is a full member state of the European Union. The EU recognises only business format franchising as a form of franchising.

  3. 3.

    In actual fact the term franchisee means the company receiving the granted right i.e. franchise (Elango and Fried 1997). Frequently however, especially in the case of small and medium size companies, the owner-manager of the company or the entrepreneur is called a franchisee. Franchisee is then thought of as a person and the word franchisee is used synonymously with entrepreneur (/small business owner/self-employed). By saying this, it is recognised that franchisees can be companies that are larger in size than their franchisor and franchising may only be one line of business for these companies (see e.g. Hoy et al. 2000; Tuunanen 2005). Large franchisee companies are not the focus of the current study.

  4. 4.

    Entrepreneurship and entrepreneurial in the English language are often normative statements concerning individuals, often founder-owners, who manage their firms in a certain way. There are other languages e.g. Finnish where no other terms (with connotations of growth orientation or self-employment) for entrepreneur exist. International comparisons are difficult, because the core term entrepreneurship is very culturally oriented (Huuskonen 1992; Gibb 2002).

  5. 5.

    Carland et al. (1984) raised a discussion on definitions of entrepreneur and small business owner and their differences. The discussion was commented on by Gartner (1988) and again by Carland et al. (1988), and has continued among entrepreneurship researchers (see e.g. Cunningham and Lischeron 1991; Gibb 2002; McKenzie et al. 2007). When the terms entrepreneur and entrepreneurial venture have been defined, the central issues in the discussion have been e.g. the personality traits and characteristics of the owner/founder of the company; the innovativeness, newness, and creativity of the owner/founder and the company; purpose of establishing and managing the company; and profitability and growth goals of the owner/founder and the company. However, many researchers have not provided any definition, which has also led to heterogeneous selection in sampling. Thus, the comparability of the studies has been problematic.

  6. 6.

    The view represented by Shane is called the discovery view and it is in marked contrast to an alternate creative view, according to which opportunities do not exist in any objective form, but are merely a social construction (Venkataraman 2003, xi; Alvarez and Barney 2007). These two views represent different ontological and epistemological starting points.

  7. 7.

    Huuskonen (1992; cf. Bird) found that if a person abandons the intention to become an entrepreneur, the negative decision may not be permanent. The decision is linked to background, personal and environmental factors and the process may start again later.

  8. 8.

    The view of different situational factors that influence the entrepreneurial process is called contingency view (see e.g. Gilad and Levine 1986; Littunen 2001).

  9. 9.

    Examples of push factors (negative motivations to entrepreneurship): job dissatisfaction, prospect of unemployment, unemployment, local identity/willingness to stay in certain area. Examples of pull factors (positive motivations to entrepreneurship): desire to work for oneself, existence of role models, knowledge of market opportunity, being able to raise capital e.g. receiving an inheritance. Classifying factors to push or pull factors is difficult since factors might be strongly connected and their influence might be subjective and case-specific: what is negative to one person might be neutral or positive to another.

  10. 10.

    Bird (1988) described entrepreneurial intention as a state of mind, directing attention, experience and action toward a specific object (goal) or pathway to its achievement (means) (see also e.g. Bird and Jelinek 1988; Bird 1989; Krueger et al. 2000).

  11. 11.

    A broader description of the franchisee training program including its background is given and results of the first phase of the longitudinal study are reported in two prior articles: Torikka and Tuunanen (2003) and Torikka (2004). Results of the second phase are reported in the article by Torikka (2007).

  12. 12.

    No theoretical discussion on effectiveness of entrepreneurship education and training will be presented in this article since it was not the focus of third phase (see Torikka 2007).

  13. 13.

    Delmar and Davidsson (2000) described hindsight bias as “the risk of incorrect reporting due to memory loss or re-interpretation of facts as a consequence of events that have occurred after the time of start-up.” Hindsight bias has received considerable attention in cognitive psychology over the last two-three decades. It has been found to be a robust phenomenon occurring in a variety of settings and judgements. Recent research has conceived of hindsight bias as consisting of three separable and partially independent components: memory distortions, impressions of foreseeability and impressions of necessity (see e.g. Blank et al. 2008; Nestler et al. 2010; Bernstein et al. 2011).

  14. 14.

    Triggering event is described as an event or circumstance (such as lay-off, divorce, winning or inheriting money) that enables or gives a person a final push or pulls him/her to entrepreneurship (see e.g. Bygrave 1989, 2004; Shindehutte et al. 2000; Davidsson 2005). The notion of triggering event is banded with push and pull factors of entrepreneurship and entrepreneurial intention and motivation (see e.g. Shapero and Sokol 1982; Bygrave 1989, 2004).

  15. 15.

    Management studies on franchising recognise form of entrepreneurship as organisational form.

  16. 16.

    Information given by the respondents concerning e.g. the contents and the timing of the training program was compared with the information received from the organisers of the program. Additionally, information concerning e.g. the company form and the time of establishment and closure of the company were compared with the data obtained in the national business information system which is a joint service for businesses and organisations that are clients of the Finnish Tax Administration and Trade Register.

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Acknowledgements

The author would like to express her gratitude to professor, Dr. Hannu Littunen, University of Eastern Finland, docent, Dr. Mika Tuunanen and Dr. Jenny Buchan, University of New South Wales for their insightful comments on the study and earlier versions of this article.

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  1. Jyväskylä University School of Business and Economics, University of Jyväskylä, 35, FI-40014, Jyväskylä, Finland

    Jenni Torikka

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  1. , Institut für Strategisches Management, Universität Münster, Leonardo-Campus 18, Münster, 48149, Germany

    Thomas Ehrmann

  2. , Department of Management, University of Vienna, Brünner Str. 72, Wien, 1210, Austria

    Josef Windsperger

  3. , Institute of Management of Rennes (IAE), Université de Rennes 1, rue Jean Macé 11, Rennes Cédex 7, 35708, France

    Gérard Cliquet

  4. , Rotterdam School of Management, Erasmus University Rotterdam, Burgemeester Oudlaan 50, Rotterdam, 3062 PA, Netherlands

    George Hendrikse

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Torikka, J. (2013). Entrepreneurial Processes of the Finnish Franchisee Training Program’s Graduates. In: Ehrmann, T., Windsperger, J., Cliquet, G., Hendrikse, G. (eds) Network Governance. Contributions to Management Science. Physica, Berlin, Heidelberg. https://doi.org/10.1007/978-3-7908-2867-2_16

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