Abstract

Most empirical work on governance decisions focuses on explaining a firms’ choice among governance structures. Nevertheless, in practice very different governance structures often exist side by side. The simultaneous use of different governance structures for the same function is referred to as the “plural form”. The synergistic benefits of the plural form have been highlighted by only a number of research works. We will add to the body of knowledge by studying the plural dynamics in the pharmaceutical industry. We will show the chain operator’s contribution to the performance in pure and plural forms, for both company owned and franchised outlets. Further, we will open the black box and show how horizontally and vertically the interactions between franchisees, company outlets and the chain operator support the realization of potentially conflicting strategic objectives of local responsiveness and standardization. We will take the perspective of the chain operator, being responsible for the development of the plural dynamics within the organization.

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