The moderating role of servant leadership in the relationship between organizational structure and performance in fashion retailing

Abstract

PurposeThis study aims to reveal how the organizational structure (vertical integration vs. franchising) of 308 stores in a Spanish fashion retail franchise chain affects their performance measured through two key performance indicators commonly used in this industry, namely, labor productivity and service quality ratings. We also appraise the moderating role played by the servant leadership of franchisees and managers of company-owned outlets to explore its influence on the relationship between organizational structure and store performance.Design/methodology/approachWe have used multivariate analyses to study the research questions, with a panel dataset of quarterly store-level data for the period January–December 2022.FindingsVertically-integrated stores record lower labor productivity than franchised ones. This impact is lower in stores run by individuals high in servant leadership than in those run by individuals low in it. Franchised outlets also record lower ratings in service quality than vertically-integrated stores, and this negative impact is weaker in stores run by individuals high in servant leadership.Originality/valueNothing has thus far been published on the moderating effect of servant leadership in the relationship between the organizational structure of different stores and their outcomes in franchise systems.