The Effects of Separating Ownership and Control on the Performance of Retail Stores in Southern Zimbabwe

The effect of separating ownership and control is one of the debates that have been going on from the 17th century to today. There has been mixed evidence of whether the value of a firm and rewards to shareholders increase if the owners are involved in running these businesses or if they outsource the management function to professional managers or directors. The aim of this paper is to unravel issues surrounding managerial ownership and ultimate effects on performance. While there has been meager research on this topic among Zimbabwean academics enumerated evidence of studies around this topic in elsewhere is unquestionably apparent. Using a sample of thirty grocery reputable franchised stores in southern Zimbabwe the research put to test the three corporate governance theories namely agency, stewardship and stakeholder. Unlike previous researchers who relied on published data we used financial performance measure such as sales, gross profit, and customer count and store size to test whether these are affected by the ownership and management structure. The results led to the conclusion that there is no significant difference between owner managed firms and non owner managed firms in reference to the franchised stores reviewed