Changing career models and capacity for innovation in professional services

A number of professional sectors have recently moved away from their longstanding career model of up-or-out promotion and embraced innovative alternatives. Professional labor is a critical resource in professional service firms. Therefore, changes to these internal labor markets are likely to trigger other innovations, for example in knowledge management, incentive schemes and team composition. In this chapter we look at how new career models affect the core organizing model of professional firms and, in turn, their capacity for and processes of innovation. We consider how professional firms link the development of human capital and the division of professional labor to distinctive demands for innovation and how novel career systems help them respond to these demands.

Reputation and performance in large law firms

Reputation is a signalling device that serves as a proxy for the quality of a firm’s products, strategies and employees relative to its competitors, when communicating with clients and other stakeholders. It is especially important for professional service firms because of the complex and intangible nature of their service and because of the advantages it confers in the market for high-quality professional staff. This paper extends and refines existing research on reputation which shows positive returns to reputation for professional service firms. We use different rankings of the top 50 law firms in the UK to measure reputation and examine their relationship with financial performance as expressed in firm revenue and profits. We find positive but diminishing returns to reputation even within this group and we find a stronger relationship between reputation and profits than fee income. We conclude that reputation may be an important source of competitive advantage for leading firms but it seems to offer little leverage for others. If these results are generalizable across other professional sectors this raises the question of how the majority of firms can differentiate themselves.

Tracking habitus across a transnational professional field

The sociology of the professions has shied away from cross-national comparative work. Yet research in different professional jurisdictions emphasizes the transnational nature of professional fields. Further work is therefore needed that explores the extent to which transnational professional fields are characterized by unity or heterogeneity. To that end, this article presents the results of a qualitative interrogation of the habitus of partners in ‘Big 4’ professional service firms across, primarily, five countries (Bangladesh, Canada, France, Spain and the UK). Marked differences are observed between the partner habitus in Bangladesh and the other countries studied in terms of entrepreneurial and public service dispositions. In turn, these findings highlight the methodological relevance of habitus for both the sociology of the professions and comparative capitalism literatures: for the former, habitus aids in mapping the dynamics of transnational professional fields; for the latter, habitus can elucidate the informal norms and conventions of national business systems.

Service productivity:what stops service firms from measuring it?

Productivity measurement poses a challenge for service organizations. Conventional management wisdom holds that this challenge is rooted in the difficulty of accurately quantifying service inputs and outputs. Few service firms have adequate service productivity measurement (SPM) systems in place and implementing such systems may involve organizational transformation. Combining field interviews and literature-based insights, the authors develop a conceptual model of antecedents of SPM in service firms and test it using data from 276 service firms. Results indicate that one out of five antecedents affects the choice to use SPM, namely, the degree of service standardization. In addition, all five hypothesized antecedents and one additional antecedent (perceived appropriateness of the current SPM) predict the degree of SPM usage. In particular, the degree of SPM is positively influenced by the degree of service standardization, service customization, investments in service productivity gains, and the appropriateness of current service productivity measures. In turn, customer integration and the perceived difficulty of measuring service productivity negatively affect SPM. The fact that customer integration impedes actual measurement of service productivity is a surprising finding, given that customer integration is widely seen as a means to increase service productivity. The authors conclude with implications for service organizations and directions for research.

Knowledge and innovation as value drivers in professional services firms: an empirical research in Central and Eastern Europe

The purpose of this study was to investigate empirically the role of knowledge and innovation within Central and Eastern Europe’s changing economy. We applied qualitative research methods, and focused only on professional services firms within the region. The connection between knowledge and innovation as well as knowledge and competitiveness was analyzed by top managers and senior industry experts. Our findings revealed that knowledge might be a real value driver for professional services firms. These companies can significantly contribute to the development of modern economies through the dissemination of their internal best practices in knowledge management. We found three factors that might influence the effectiveness of knowledge management. These three factors are the involvement of international knowledge networks, the investments in human capital, and focus on critical resources. These issues proved to be essential to maximize the potential of knowledge and to leverage this into increased business performance.

Applying Career Concepts to Strengthen the Work-Attitudes of Service Professionals

Given the nature of employment relationships today, service organizations can strengthen the organization commitment levels and reduce the turnover intentions of its professionals through providing job features important to their careers. These features include opportunities to perform challenging work, experience trusting relationships with customers/clients, and obtain extrinsic rewards. Using a sample of alumni from a hospitality business program, hypotheses that these features impact organizational commitment and turnover intentions, partially through strengthening professionals' career commitment, are developed and tested. Findings suggest that challenging work opportunities impact these attitudes both directly and indirectly. So too trusting relationships with customers and clients indirectly impact organization commitment and intent to turnover (ITO). Results also suggest that, as a whole, satisfaction with extrinsic rewards has no effect. However, an analysis of multigroup mediation results revealed that for professionals working in professional service firms, satisfaction with pay reduces both attitudes. Implications for research in organization commitment and ITO, specifically the role and impact of career-based antecedents, are discussed.

Let's talk about sex(ism): cross-national perspectives on women partners’ narratives on equality and sexism at work in Germany and the UK

While the accounting academy has contributed in important ways to furthering our understanding of the relative absence of women in top positions in Professional Service Firms, in-depth empirical research that focuses specifically on sexism is rare, especially so from a cross-national perspective. Drawing on sixty interviews with women partners in public accountancy firms in Germany and the United Kingdom, this article examines how women partners talk about sexism and equal opportunities in the accountancy profession and considers how these narratives are patterned cross-nationally. Employing cultural theory, this study explores how elite women discursively relate to sexism and equal opportunities through their career histories and demonstrates the complex interrelation between the context in which these narratives are produced and the past and present positions of the respondents. Interestingly, it was the German respondents who drew on problematic notions of ‘choice’ and responsibility, where it was upon women to make a choice between their careers and home lives, while this decision-making process was not expected from men. This was in contrast to the accounts of the UK participants who, although also unveiling tensions in their talk, were more inclined to acknowledge continuing structural constraints.

Análise de recursos e capacidades em empresas de serviços profissionais : análise comparativa em escritórios de arquitetura paulistas consolidados

O mercado de arquitetura atende a um nicho específico de pessoas de poder econômico e gosto, ou seja, é uma atividade de luxo, que conta com uma concorrência acirrada. O presente trabalho tenta entender como alguns escritórios de arquitetura, mesmo diante de tais barreiras, conseguem se sobressair perante outros. O projeto tenta identificar quais os recursos e capacidades mais relevantes dentro desses escritórios de arquitetura de sucesso. O estudo está centrado na teoria dos recursos (RBV) e nos conceitos relativos a empresas de serviços profissionais. A metodologia utilizada foi qualitativa, através de estudo exploratório com coleta de dados realizada por meio de entrevista semiestruturada, seguida de uma análise comparativa. Os escritórios de arquitetura foram selecionados por um painel com os critérios de sucesso, elaborado a partir de entrevistas com especialistas do mercado de arquitetura. Os resultados mostraram a relação entre a dimensão dos escritórios escolhidos (número de arquitetos, de projetos em andamento e de obras concluídas) e os recursos e as capacidades encontrados (o papel da liderança, a centralização da criação, a prospecção, a gestão do escritório e a terceirização).

The big 4 in Bangladesh:caught between the global and the local

Purpose- This article explores the work practices of Big 4 firms in Bangladesh with the aim of exploring the extent to which Global Professional Service Firms can be thought of as being genuinely ‘global’. Methodology/Approach- Interviews were undertaken with the vast majority of Big 4 partners in Bangladesh. These interviews explored a number of themes related to the professional service work context in Bangladesh and the relationship between local and global firms. Findings- The central finding of this paper is that although the Big 4 have a long-established presence in Bangladesh, local societal factors heavily influence the realities of work for accountants there. In most cases the Big 4 firms establish correspondent firms (instead of full member firms) in Bangladesh and tend to offer restricted service lines. Additionally, the paper identifies professional, commercial and cultural barriers to greater Big 4 involvement in the local market. Conceptually, the chief contribution of this paper is to explore how the effects of globalising capitalism and standardised ‘best practices’ in global professional service work are mediated through the societal effects of Bangladeshi society, resulting in the Big 4 having only a tentative presence in the Bangladeshi market. Research implications- The findings cast doubt on the extent to which self-styled Global Professional Service firms are truly ‘global’ in nature. Future work examining the Big 4, or accounting more generally, in the context of globalization, would do well to pay greater attention to the experience of professionals in emerging markets. Originality/Value- Whilst there has been much work looking at accounting and accountants in the context of globalization, this work has tended to privilege ‘core’ western empirical settings. Very little is known about Professional Service Firms in ‘peripheral’ or emerging markets. Furthermore, this study extends the application of the System, Society and Dominance framework by mapping the interactions and dynamics of these three sources of influence in the setting of PSFs.

Market structure of international construction professional services: Evidences from top design firms

Construction professional service (CPS) in the international arena has been very competitive despite that the industry is proliferating at a high rate. To excel in international business, CPS firms have the importance of building overseas competition strategies on a proper understanding of the international CPS (I-CPS) market. However, subject to borderless trade, information technology–based networking, global outsourcing, and changing forms of procurement, the I-CPS market structure has become more covert, intricate, and unstraightforward than before. Through examining business competition among top international design firms, this study aims to identify the attributes of the I-CPS market structure from two perspectives—concentration and turnover. Data from Engineering News-Record over the period 2001–2011 were collected to calculate market concentration ratios and turnover indices. The results show that I-CPS competition is characterized by atomism, much turbulence with a steady increase in competition intensity, and the predominant role of new entrants and exiting firms in market turnovers. The combination of concentration and turnover is found useful to address the attributes of the I-CPS market structure, which favors I-CPS firms to formulate international competition strategies in due ways.

Competing through service innovation : the role of bricolage and entrepreneurship in project-oriented firms

The criticality of service innovation in building and sustaining competitive advantage is gaining increasing recognition in the marketplace. Using empirical data from US and Australian project-oriented firms, the study uses a multi-staged multi-method research program to demonstrate how entrepreneurial service firms strategically combine resources at hand (bricolage) to innovate and stay ahead of rivals. The research shows that service entrepreneurship (SE) and bricolage influence two forms of service innovation (interactive and supportive), which in turn is associated with sustained competitive advantage (SCA). The results suggest that SE and bricolage indirectly relate to SCA through service innovation. The findings offer novel insights into how project-oriented service firms engage in innovation. In short, the findings encourage the “making do by combining resources at hand” as higher levels of entrepreneurial bricolage are associated with higher levels of interactive and supportive innovation enabling SCA, suggesting a new model.

The use of ICT by logistics service providers and implications for training needs:a cross-country perspective

Changes in the international economic scenario in recent years have made it necessary for both industrial and service firms to reformulate their strategies, with a strong focus on the resources required for successful implementation. In this scenario, information and communication technologies (ICT) has a potentially vital role to play both as a key resource for re-engineering business processes within a framework of direct connection between suppliers and customers, and as a source of cost optimisation. There have also been innovations in the logistics and freight transport industry in relation to ICT diffusion. The implementation of such systems by third party logistics providers (3PL) allows the real-time exchange of information between supply chain partners, thereby improving planning capability and customer service. Unlike other industries, the logistics and freight transport industry is lagging somewhat behind other sectors in ICT diffusion. This situation is to be attributed to a series of both industry-specific and other factors, such as: (a) traditional resistance to change on the part of transport and logistics service providers; (b) the small size of firms that places considerable constraints upon investment in ICT; (c) the relative shortage of user-friendly applications; (d) the diffusion of internal standards on the part of the main providers in the industry whose aim is to protect company information, preventing its dissemination among customers and suppliers; (e) the insufficient degree of professional skills for using such technologies on the part of staff in such firms. The latter point is of critical importance insofar as the adoption of ICT is making it increasingly necessary both to develop new technical skills to use different hardware and new software tools, and to be able to plan processes of communication so as to allow the optimal use of ICT. The aim of this paper is to assess the impact of ICT on transport and logistics industry and to highlight how the use of such new technologies is affecting providers' training needs. The first part will provide a conceptual framework of the impact of ICT on the transport and logistics industry. In the second part the state of ICT dissemination in the Italian and Irish third party logistics industry will be outlined. In the third part, the impact of ICT on the training needs of transport and logistics service providers - based on case studies in both countries - are discussed. The implications of the foregoing for the development of appropriate training policies are considered. For the covering abstract see ITRD E126595.

Power relations and small and medium-sized enterprise strategies for capturing value in global production networks: visual effects (VFX) service firm in the Hollywood film industry

Power relations and small and medium-sized enterprise strategies for capturing value in global production networks: visual effects (VFX) service firms in the Hollywood film industry, Regional Studies. This paper provides insights into the way in which non-lead firms manoeuvre in global value chains in the pursuit of a larger share of revenue and how power relations affect these manoeuvres. It examines the nature of value capture and power relations in the global supply of visual effects (VFX) services and the range of strategies VFX firms adopt to capture higher value in the global value chain. The analysis is based on a total of thirty-six interviews with informants in the industry in Australia, the United Kingdom and Canada, and a database of VFX credits for 3323 visual products for 640 VFX firms.

Inward internationalization of consumer services : lessons from Australian firms

Purpose - The aim of this paper is to explore the inward internationalization process of consumer services. A review of the service internationalization literature is conducted and the resource-based view of the firm is used as a theoretical approach. Design/methodology - Case study methodology is used to explore the internationalization process of five different consumer service sectors: tourism, education, accommodation, transport and entertainment. The main data collection method was interviews conducted with top managers of 12 Australian consumer service firms from these sectors. Findings - Findings of this study show that inward internationalizing services confront most of their barriers, such as immigration policies, exchange rate fluctuations, and cultural differences, in the domestic market where the service is provided. The findings also suggest that superior intentional performance for consumer service firms combines firm-specific resources and capabilities, such as market orientation, service quality, cultural sensitivity, international communicational activities, partnerships and networks, with country-specific resources and capabilities, such as country-of-origin image and government support. Research limitations/implications - This is one of the few studies in the academic literature that directly addresses the issue of inward internationalization of consumer services. Limitations derive from the qualitative nature of this study. Practical implications - The process of inward internationalization applies to a broad range of service industries and can assist firms to develop more effective international marketing strategies. Originality/value - This study contributes to the international services literature by identifying the main barriers and drivers of international performance for inward internationalizing consumer service firms, which is a topic that has been neglected in the literature.