Organizational structure and store performance in the grocery retail industry: The moderating role of narcissistic leadership

This study sheds light on how the organizational structure (vertically integrated vs. franchising) of 287 stores in a Spanish grocery retail chain affects store-level performance, estimated through two indicators frequently employed in this industry, namely, labor productivity and service quality ratings. We also appraise the moderating role played by the narcissistic leadership of franchisees and the managers of company-owned outlets to determine its influence on the relationship between organizational structure and store performance. We address these research issues through multisource, longitudinal data of both a subjective and objective nature. Franchised stores post higher labor productivity than vertically integrated ones, and this impact is stronger in those run by highly narcissistic people than in those managed by people low in narcissism. Franchised outlets also record lower ratings in service quality than vertically integrated ones, and this negative impact is also stronger in stores run by people higher in narcissistic leadership. The results are robust across our numerous specifications.