Abstract
This paper explores this research question: how do sources of power and control mechanisms manifest in in the Australian automotive industry (AAI)? The relational nature of franchising in the AAI has seen considerable disruption in recent years. With allegations of power abuse and questionable performance focused control mechanisms voiced by franchised dealers and their representatives, car manufacturers have recently undergone intense public scrutiny. Whilst two car manufacturers have disassociated from franchising in recent years, moving to an agent-based distribution model, the remainder of car manufacturers remain dependent on franchising as the main marketing channel to distribute their products and services to consumers. This research examines the exercise of sources of power and control mechanisms within the AAI, examined through an agency theoretical lens. This empirical study adopted a two-stage qualitative design gathering data across 40 in-depth interviews. Stage one was exploratory in nature and used convergent interviewing techniques with automotive franchising experts including lawyers, franchised dealers, dealers’ representative bodies, and car manufacturers. Stage two consisted of case studies of nine dealerships.