Having Your Cake and Eating it Too: Scaling a Chain Rapidly and Healthily

Replication of operational routines is an important source of value creation for chain organizations. Once initially adopted, however, routines must be maintained. This creates a potential tension, as attention to replicating operational routines in new outlets may affect the organizational capacity to maintain adherence to those routines at existing outlets. Surprisingly, little is known about how this tension is managed and what types of experience may improve the ability to manage the ensuing dual imperative. Drawing on the replication and organizational learning literatures, and using data from a Fortune 100 franchise chain with thousands of outlets, we examine whether and how replicating operational routines in new outlets influences a chain’s ability to maintain adherence to those routines in existing outlets over time. We posit and find evidence of a spatio-temporal trade-off in replication, whereby as speed of scaling in an area increased, adherence to operational routines at existing outlets in that area decreased. Our central finding is that this trade-off is moderated by individual outlets’ learning from their own operating experience, as well as by area units’ learning from their prior adherence-related failure and rhythm of scaling experience. The findings point to important hitherto neglected learning and attention mechanisms operating at different levels within chain organizations, which shape their capacity to scale rapidly yet healthily, i.e., to replicate operational routines across both space and time.