Sustainability Innovation Enabled by Digital Entrepreneurship in Franchise Organizations

Sustainability Innovation Enabled by Digital Entrepreneurship in Franchise Organizations

Copyright: © 2021 |Pages: 15
DOI: 10.4018/IJEEI.2021010105
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Abstract

In responding to United Nations' Sustainable Development Goals, using digital entrepreneurship to replicate proven sustainability innovation is an effective approach to scaling up the franchise systems to achieve the goals. The authors show a platform of sustainability innovation enabled by digital entrepreneurship in nurturing a trusted franchisor-franchisee relationship to grow the franchise system. The platform is a digital nervous system consisting of technology networks, social networks, value networks, and responsive networks. The platform is grounded in synergistically integrating the digital capability of developing and disseminating working knowledge globally and effective entrepreneurial solutions locally. Sustainability innovation through such a methodology is a win-win approach to both franchisor and franchisees. An exemplar illustration of how franchise systems help in the fight against COVID-19 is included.
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Introduction

On September 25th, 2015, United Nations adopted a set of seventeen global sustainability goals to transform our world (UNSDG, 2015). There is an increased need of developing innovative business solutions to achieve the goals. For example, the Better Business, Better World (BBBW, 2020) shows that it makes good business sense for companies to pursue the SDGs to address the interconnections of global risks as indicated in the Global Risks Interconnections Map 20120 (World Economic Forum, 2020). New evaluation tools, such as The Chemical Sector SDG Roadmap (WBCSD, 2018) and Trucost – part of S&P Dow Jones Indices, a division of S&P Global (SB, 2018), help companies develop SDGs-aligned business strategies. Furthermore, Impact 2030 (IMPACT2030, 2020), a private sector led coalition, help companies align employee volunteer programs to meet the SDGs.

Sustainability in franchise organizations has emerged to become a popular topic of high priority for researchers and practitioners (Calderon-Monge, Pastor-Sanz & Huerta-Zavala, 2017; Meek & Sullivan, 2018; Faseruk & Clift, 2019; Park, Choi & Kang, 2020). For example, social franchising, i.e., using franchise innovation to replicate proven sustainable solutions where economic and social aspects become mutually supportive to enhance their impact on communities' development, is an effective entrepreneurial approach to scaling up solutions to achieve SDGs (Asemota and Chahine, 2017; Samsudin and Wahab, 2018; Chen, 2020). Sustainability in franchising is a journey with innovation playing an important role in achieving the sustainable development goals (Rauter, etc., 2019). For example, it took more than twenty-five years of sustainability innovation (Langert, 2019) for McDonald to develop the “Scale for Good” (MSFG, 2020) sustainability strategy, consisting of setting a inspiring vision, laying the foundation of value principles, establishing focused pillars, developing smart goals to spur action, creating accountability of sustainability innovation, engaging with stakeholders on progresses. The battles include reducing food waste, transforming animal welfare, dealing with extremism, being proactive, healthy brand name, sustainable supply chain, values, shareholder buy-in and support, protecting Amazon rainforest, making a pig’s life better, the quest for sustainable beef, and leading both business and society to justify the profits of sustainability.

Although information technology (IT) is quite important in franchising (Chen, Justis & Chong, 2002), IT researchers have largely ignored this arena. One major reason is that few IT researchers are vested in the knowledge of how franchising functions, and without this deep knowledge it is difficult to implement effective IT systems. In his best seller, Business @ the Speed of Thought, Bill Gates (1999) wrote: “Information Technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without talking about the other.” Thus, to see how IT is used in franchising (Repack & Repack, 2010), one needs to know how franchising really works. Franchising involves with granting and receiving business rights (Pyasi, 2010) from the franchisor to the franchisee (Justis & Judd, 2003). Franchise organizations are franchise systems established through cooperative arrangements (Baucus, Baucus & Human, 1996) and trusted relationships (Dickey, McKnight & George, 2007) among entrepreneurs. Franchising has been a popular growth strategy for many businesses (Lindblom & Tikkanen, 2010; Pessar, 2019). Franchising has also emerged over the years as a pathway to wealth creation for entrepreneurs (Justis & Vincent, 2001; Dada & Watson, 2013). In terms of diversity and inclusion, franchising has increased its impact on the job creations (Combs, Michael & Castrogiovanni, 2004; Gillis & Castrogiovanni, 2012). In the emerging markets, international franchising is considered an effective expansion strategy due to several influencing market conditions (Baena, 2012).

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