A key decision for entrepreneurs in many retail and service firms is whether, and how much, to use franchising. If the decision is made to franchise, the actor may assume one of two "identities" or tactics: (1) the "chain builder," who uses a blend of company and franchised outlets, and (2) the "turnkey," who sells business opportunities but does not own any outlets. To benefit from their chosen strategy, franchisors must put resources in place to support it. We argue that franchisors use the chain building strategy to strike a balance between standardization and innovation by building resources that foster trust and encourage knowledge sharing with franchisees. In contrast, for turnkeys, a valuable set of operational routines is the critical strategic resource. To better appreciate how franchisors choose between the chain builder and turnkey strategies, we gathered survey information from 263 franchisors. Via this data, and as described herein, we learned that franchisors perform better when they invest in resources that best support their selected strategy.

All executives would like to see their organizations perform better, and most search for tools that can help make this happen. For decades, human resource managers have believed that their function enhances performance. This contention has been met with skepticism on the part of executives, however, who wonder whether funds allocated to the human resource function are good investments. Dozens of studies have examined this issue, but their inconsistent results have provided no conclusions. To resolve a long-standing and controversial question - does human resource management matter for organizational performance? - we take stock of the available evidence. Based on data from over 19,000 organizations, we conclude that human resource management adds significant value for organizations. In addition, the value added is strongest when human resource systems are emphasized rather than individual practices, when human resource management decisions are tied to strategy, and among manufacturing firms.