Knowledge-intensive Service Firms Research Articles

Retaining talent in knowledge-intensive services: enhancing employee engagement through human resource, knowledge and change management

PurposeThis study aims to explore talent retention in knowledge-intensive industries by investigating the mediating processes between the existence and application of human resource management (HRM) and employee turnover. Toward this end, drawing on the conservation of resources and job demands–resources theories, a three-dimensional model is examined, which includes the relationship between HRM, knowledge management (KM) and change management (CM), as well as their relationship with employee engagement and employee turnover intention.Design/methodology/approachThe proposed research model has been studied with a sample of 168 talented employees in over six European countries, using a quantitative approach, involving the structural equation modeling method. All data were gathered by a multidimensional questionnaire via prolific, an academic crowdsourcing platform.FindingsResults indicated that knowledge-intensive services firms may achieve higher talent retention through the interaction of HRM with KM and CM practices, which may lead to enhanced employee engagement.Research limitations/implicationsPossible limitations of the study include the relatively small sample size, the self-rate questions for the collection of data and the use of cross-sectional data.Practical implicationsTo retain their talented employees, organizations should identify ways to improve their HRM, CM and KM practices. In addition, HR practitioners ought to include their talented employees in all organizational change and KM processes and create mechanisms that successfully support knowledge acquisition, creation, sharing, retention and codification.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine various factors of retaining talented employees in knowledge-intensive services. Furthermore, the study took place in six European countries, i.e. UK, Poland, Italy, Germany, Portugal and Greece, where the research on talent retention is very limited.

Reconceptualizing Customer Capital: A Strategy as Practice Approach

Customer capital is a critical source of value for knowledge intensive service firms (KISFs). However, we lack a precise understanding of the nature of the customer-specific knowledge that undergirds customer capital and how specifically that knowledge confers value to KISFs. In this paper, we adopt a strategy as practice (SAP) approach to reconceptualize customer capital. Specifically, we delineate four modes of customer-knowing KISFs may cultivate, each of which confers value to the focal firm vis-à-vis informing local (i.e. account) and / or global (i.e., firm) strategizing. Further, using Whittington’s (2006) practice-praxis-practitioners framework, we elaborate a typology of customer capital. Our theorizing constitutes an initial step towards theorizing a more dynamic, multi-dimensional understanding of customer capital. Theoretical and practical implications are discussed.

The importance of owner loans for rebalancing the capital structure of small knowledge-intensive service firms

The purpose of this study is to analyze the financing behaviors of young and old small knowledge-intensive service (SKIS) firms, giving particular attention to the relationship between owner loans and the level of indebtedness and to the effect of owner loans on rebalancing the capital structure of such firms. Using dynamic panel data, this study used two samples, one with 421 young SKIS firms and another with 1353 old SKIS firms. Based on the findings, the financing behaviors of both the young and old firms closely resembled the predictions of the pecking order theory. However, the young SKIS firms attempted to rebalance their capital structure, being able to renegotiate credit under favorable terms, while the old SKIS firms slowly adjusted, suggesting the presence of high transaction costs. Regarding owner loans, they positively impacted the adjustment speed, with greater magnitude on the old SKIS firms.

The effect of technological innovation on low-tech Peruvian manufacturing firms' performance: the role of external sources of knowledge

PropósitoEl artículo tiene por propósito evaluar la relación entre las fuentes externas de conocimiento y la innovación tecnológica, para luego analizar como esta mejora el desempeño de la empresa.Diseño/metodología/enfoqueEste estudio presenta evidencia basado en una base de datos de 708 empresas de baja intensidad tecnológica que participaron en la Encuesta Nacional de Innovación en la Industria Manufacturera y Empresas de Servicios Intensivas en Conocimiento (ENIIMSEC) 2018. Se aplico el enfoque del modelo de ecuaciones estructurales.ResultadosExiste una relación positiva entre las fuentes externas de conocimiento y la innovación tecnológica, para que luego esta mejore el desempeño de la empresa.Originalidad/ValorEstos resultados proporcionan un conocimiento más profundo sobre como las empresas de manufactura de menor intensidad tecnológica pertenecientes a una economía emergente son capaces de aplicar las prácticas de la innovación abierta para desarrollar la innovación tecnológica, mejorando el desempeño de la empresa.

Impact of Open Innovation in Peruvian food firms

Food firms are an important part of Latin American economies, and they face an increasingly competitive context due to their customers’ demands. For this reason, the main objective of this study is to empirically verify how inbound open innovation and absorptive capacity have a positive influence on technological innovations in Peruvian food firms. A model was designed that shows the relationship between the constructs, and it is based on a sample of 111 food firms that participated in the third national innovation survey of the manufacturing industry and knowledge-intensive service firms carried out in 2018. The present study contributes to the literature in the following two ways: First, it contributes to the research of the food industry, which is an industry representative of low-tech intensity industries that lack research; second, it aims to deepen the knowledge about the positive influence of open innovation and absorptive capacity on food firms’ technological innovation capability. As a result, this study has empirically verified how the implementation of inbound open innovation and absorptive capacity improve the technological innovation capability of Peruvian food firms.

High-technology development zones and innovation in knowledge-intensive service firms: Evidence from Chinese A-share listed firms

Academic attention has been increasingly focused on the relationship between the practice of development zones and firm innovation. This paper explores the impact effect and mechanism of the establishment of high-tech development zones on the innovation behavior of knowledge-intensive service enterprises using data from A-share listed companies from 2005 to 2019. It is found that the establishment of high-tech development zones has a significant positive effect on the improvement of innovation capability among knowledge-intensive service enterprises. After mitigating the endogeneity problem, considering the sample selection problem, and conducting other robustness tests, the estimation results still support the baseline findings. Meanwhile, the innovation effect of high-tech zone establishment shows significant heterogeneity. Specifically, the impact of high-technology development zone establishment on firms' innovation capacity is most significant among technology service firms. In addition, the effect of high-tech development zone establishment on firms' innovation capability is more significant if the firms are located in national high-tech zones, or the eastern region, or in regions with high openness. Therefore, regions should actively optimize their upgrading and transformation of existing high-tech zones, strengthen the integration between high-tech zones, and actively guide the innovative development of knowledge-intensive service enterprises in high-tech zones.

A network perspective on foreign entry modes of small knowledge-intensive services firms

PurposeIntegrating network attributes from studies of social networks, business relationships and small- to medium-sized enterprise (SME) internationalization, this study adopts a perceptual view of a firm’s focal “net” of relationships to examine foreign market entry mode choice. This study aims to examine how the interaction between knowledge-intensive service (KIS) firm’s network ties, embeddedness and position is related to choice of mode and subsequently the firm’s perceived insidership status within its focal net.Design/methodology/approachThis research is based on qualitative interviews with 25 small- to medium-sized KIS firms engaged in direct exporting or foreign direct investment (FDI). This study derives an empirically grounded framework of four distinct network patterns of these KIS firms through an iterative process of triangulation between cases and theory.FindingsThe four network patterns illustrate the complex interaction between network attributes and entry mode choice by KIS firms. The findings suggest formal ties and centrality in closed network relationships provide the “central controller” firm discretion over their entry mode choice. Resource-intensive FDI by “opportunistic investors” proved essential to securing centrality through formal, institutional ties. Less optimal patterns lacking institutional ties and centrality, however, precluded choice of FDI by “specialized exporters” and “client followers.” The study finds that entry modes are less likely to be influenced by the firm’s embeddedness in open or closed network relationships, but rather by the desire to achieve a more central network position and legitimacy through more formal, less imitable ties.Research limitations/implicationsThe findings demonstrate the importance of network structure, a position of centrality, and strength of professional and institutional ties to small KIS firm internationalization. By adopting a more finely grained examination of the interaction between key attributes of the firm’s focal net, this study provides a valuable first step in conceptualizing the complexities associated with networking and adoption of export/investment internationalization modes.Practical implicationsThere are a number of implications for the strategic and operational facets of smaller KIS firm internationalization. To avoid excessive network liability for resource-deficient SMEs, practitioners should consider network positioning as a strategic activity, with the costs associated with building and maintaining networks offset against economic- and resource-related returns.Originality/valueThe authors contribute to a better understanding of entry mode choices of KIS by taking a network perspective that accounts for the combined effects of different network attributes. The four network patterns identified extend current theoretical knowledge on the role of networks for entry mode choices of small KIS by highlighting that entry mode choices reflect the particular firm’s focal net and its attempt to achieve insidership status through high centrality and formal ties.

Microfirms and innovation in the service sector

In the context of microfirms, this paper analyzes whether the link between the three aspects involving innovative activities—R&D, innovative output, and productivity—hold for knowledge-intensive services. With especially high start-up rates and the majority of employees in microfirms, knowledge-intensive services (KIS) have a starkly different profile from manufacturing. Results from our structural models indicate that KIS firms benefit from innovation activities through increased labor productivity with highly skilled employees being similarly important compared to R&D for creating innovation output in microfirms. Moreover, the firm size advantage of large firms found for manufacturing almost disappears in KIS, with start-ups and young firms having a higher probability of initiating innovation activities and of successfully turning knowledge into innovation output than mature firms.

Competitive capabilities in knowledge-intensive services firms: strategic advantages of born globals in a peripheral region

PurposeWhile the born global (BG) phenomenon has been well established in the literature, studies on accelerated internationalization of firms in the service sector have been scarce, particularly for the specific case of knowledge-intensive services (KIS). The purpose of this paper is to explore which competitive characteristics differentiate KIS BGs from other KIS firms in the context of a peripheral region.Design/methodology/approachThe empirical focus of this study comprehends primary survey data from 250 Spanish KIS firms (Andalusia) that have been internationalized and analyzed through ordinal and ordinary least squares regressions. The authors address the “born-global effect” on five features of interest, namely, entry mode, technological capabilities, qualification of staff, external resources and quality of services.FindingsResults suggest that KIS BGs in Andalusia perceive exports as a more relevant form of internationalization than its non-BG peers. Also, KIS BGs in Andalusia present higher levels of technological intensity. Differences in terms of staff qualification, access to extramural R&D resources and the quality of services could not be identified.Research limitations/implicationsThe main limitation of this research concerns its cross-sectional character, thus hindering the evaluation of developmental trajectories taking place in the cohort under scrutiny. Such an approach would allow a better comprehension of the competitiveness dynamics in internationalized KIS firms. Also, because this assessment is geographically restricted to Andalusia, Spain, the authors recommend caution in establishing direct comparisons and appropriation of results for other regional/national contexts.Practical implicationsRecommendations for public policy include establishing the necessary infrastructures to encourage the technological development of KIS companies and provide support – through export promotion agencies, for instance – for early approximation with foreign markets. Taking into account the contributions of KIS firms for the development of a peripheral economy, this involves the need to establish instruments that provide strategic information to internationalize, as well as lines of funding for these companies.Originality/valueEmpirical evidence on KIS BGs is needed to fully grasp its differences to other internationalized service firms. The analysis within this specific domain represents an advance in the literature on this subject. Also, the context of peripheral regions – considering their economic differences to core areas – has been understudied. The elaboration and application of the survey have allowed the authors to have access to primary in-depth data and, therefore, to build a better understanding of KIS BGs in Andalusia, Spain.

Does Venture Capital affect capital structure rebalancing? The case of small knowledge-intensive service firms

This study analyses small knowledge-intensive service (SKIS) firms’ capital structure rebalancing, before and after Venture Capital (VC) entry. We use data for a sample of 1161 Western European SKIS firms, for the period 2006–2015. Two sub-samples were created: one composed of firms before VC entry; the other composed of SKIS firms after VC treatment. We use panel data models and the system GMM (1998) dynamic estimator. The results obtained suggest that after VC entry, SKIS firms are close to the predictions of the pecking order theory. Therefore, SKIS firms after VC participation on firm equity, probably become less dependent on debt, choosing internal finance to fund assets that are firm-specific or have an intangible nature, and, hence cannot be pledged as collaterals.

The outsourcing practice among small knowledge-intensive service firms

PurposeThis paper aims to present findings on outsourcing practices in small service firms in Iceland, where the prime focus is on knowledge-intensive service firms.Design/methodology/approachTo gain information on the scope and reason for outsourcing, telephone and online surveys were used. In total, 802 firms participated in the surveys, which were conducted in the period 2009-2018.FindingsThe results show that knowledge-intensive firms outsource far more than other service firms and are also more likely to have an outsourcing strategy. The grounds for increased outsourcing are cost reduction and strategic reasons, such as a focus on core competency and the search for external knowledge. In comparison with other firms, knowledge-intensive firms are increasingly outsourcing cleaning, security services, canteen and transportation, IT processes, human resource management, training and consulting. Additionally, managers of these firms select suppliers more on the basis of cost and quality. They also realize more cost savings as a consequence of outsourcing. Outsourcing had a very limited effect on employment in the firms, while cost reduction was achieved in 48.3 per cent of the firms involved.Research limitations/implicationsThe findings are in line with the resource-based theory and, interestingly, this is not limited to knowledge-based firms, but to a large portion of service firms as well.Originality/valueThis is the first in-depth study on outsourcing patterns in knowledge-intensive firms, which uses theoretical classification in empirical analysis.

Determinants of innovation output in Spanish knowledge-intensive service firms: Stability analysis throughout the economic crisis of 2008

The aims of this paper are to identify the main determinants of the innovation output indicators (product, process, organization, marketing, products new to the firm, and products new to the market) of Spanish knowledge-intensive service (KIS) firms, to compare them with those of other categories of non-knowledge-intensive service (NoKIS) firms and manufacturing firms, and to analyze their evolution over the period 2004–2012, that is, immediately before and after the 2008 crisis. We used PITEC panel micro data, selecting and grouping firms into four categories according to their sector of activity and their intensity in use of technology and knowledge. The empirical results of our study confirm that the main determinants of innovation output are the following: cooperation with other partners to innovate, R&D intensity, and the size of the firm. These determinants are relevant not only for KIS firms but also for all the other categories. However, the influence of cooperation is more important for KIS firms for all of the innovation output indicators except for process innovation. Finally, with respect to the evolution of the main determinants over the period under study, the results show that they were not really affected by the crisis. Although all of the indicators for innovation output show clear influences of the economic cycle, the main determinants are not only the same, but their influence remains basically stable throughout the period.

Knowledge Asymmetries and Service Management: Three Case Studies

The purpose of this paper is to investigate how information systems are used by knowledge-intensive service firms and identify their effects on client–provider interactions. The paper uses data from case studies of service-related departments of three multinational firms. We identified several broad trends present in all three case companies. The required degree of knowledge specialisation, coupled with the ability to leverage knowledge created during service interactions resulted in high degrees of knowledge asymmetries between service provider and clients, which led to clients becoming the recipients of knowledge rather than co-creators. Differences between the cases related to the varying degrees to which information systems had been used to support service interactions. We therefore provide a model that outlines three key phases of activity. Individualisation involves the categorisation and location of tacit knowledge. This was followed by the codification and leveraging of service interactions through standardisation. Finally, the ability to provide alternative, more customised services, was achieved through modularisation. Increasing levels of specialisation of labour resulted in increasing knowledge asymmetries between service provider and client, reducing the need for client participation and co-production. Firms progress through three stages of development using information systems to support leveraging knowledge required for service delivery. The findings are based on case studies of departments within three multinational firms and would benefit from further empirical testing. The paper contributes to the existing literature in several ways. It focusses specifically on knowledge-intensive service firms, where labour is highly specialised. It gives information systems an explicit and significant role in examining how service elements may be leveraged. Finally, it outlines an exploratory model for managing this process.

Innovative capability building and learning linkages in knowledge-intensive service SMEs in Brazil's mining industry

This study examines how small and medium enterprises (SMEs) that are knowledge-intensive service firms (hereafter “knowledge-intensive service SMEs”) accumulate innovative technological capabilities through learning linkages with large mining companies and other industry stakeholders in the Brazilian mining industry. Drawing on detailed, long-term, qualitative micro-level evidence gathered from extensive fieldwork, we use frameworks that identify the levels of innovative capabilities and the underlying learning linkages to examine three types of innovative capability-building paths pursued by knowledge-intensive service SMEs: (i) building innovative capability from basic up to world-leading levels, followed by diversification into novel technological activities; (ii) world-leading capability building since firm's inception’ (being born innovative), following a sustenance of such capabilities, with a potential for diversification; and (iii) the movement of building basic to intermediate innovative capabilities with a potential to accumulate further capability levels and expand the firms’ customer base. Such innovative capability-building processes are more a result of individual entrepreneur impetuses than that of deliberate corporate or government policies. Decision-makers could utilise these experiences as inputs to design policies to fill this void and facilitate the spread of knowledge-based linkages and innovative activities in the Brazilian mining industry. Otherwise, a persistent absence of such policies could lead to a rapid reinforcement of the development of enclave features in this industry.

Innovation, natural resource-based activities and growth in emerging economies: the formation and role of knowledge-intensive service firms

ABSTRACTMany Latin American countries currently exhibit a pattern of production specialization heavily biased toward resource-based commodities and foodstuffs. In natural resource based activities production is highly dependent upon environmental and ecological forces. Companies processing the resource strongly depend upon specilaized subcontractors and equipment producing firms catering for their demand for location specific machinery and process engineering know how Following a case study approach we examine here the growth dynamics of some of these activities and the extent to which they can become a new 'window of opportunity' in the growth process of different Latin American countries.

Spatial clustering of high‐tech manufacturing and knowledge‐intensive service firms in the Greater Toronto Area

Key Messages Scan statistic is a useful tool to identify and delimit geographically spatial clustering of economic activity. Spatial clusters of high‐tech and knowledge‐intensive firms in the Greater Toronto Area in Canada are identified. A logit model of cluster membership is used to confirm that proximity to major transportation infrastructure, accessibility to skilled labour, and proximity to downtown are significant factors to explain the agglomeration of firms.

Internationalization and Differentiation Strategies: The Case of American and European Business Schools

The field of management has been understudied in terms of qualitative research studies exploring the internationalization and differentiation strategies of business schools (actors). This study addresses these relevant and urgent knowledge gaps due to major changes in the management education landscape, such as global turmoil, consolidation, and a deep legitimacy crisis, exacerbated by the 2008 Global Financial Crisis. The case study method was used to examine field dynamics and the behavior of six actors in three countries between 2012 and 2015 via interviews and field observations, facilitated in my dual capacity of international programs director and part-time faculty at several American (U.S.) and European business schools. The study is based on two levels of analysis: meso (between macro and micro) to understand the community of business schools and micro (to understand actor strategies). It is designed to answer this main research question: what are the strategies underlying the internationalization and the differentiation of business schools? I combined neo-institutionalism, international business, and strategic management theoretical frameworks to gain a deep understanding of the literature and the practice in relation to this main research question.Whereas this thesis is the product of my individual research (four papers) as an embedded researcher, it has been supervised by two rigorous co-authors since 2012. Therefore, my writing style alternates between “I” and “we” in respect of co-authorship. Our main findings indicate that the Uppsala internationalization model should be extended to address these tensions: internationalization vs. globalization, dimensions of audiences, and the risks associated with internationalization pathways. We also found that trust- and reputation-building mechanisms (rankings and accreditations) have become insufficient differentiators due to global mimicry. We contribute to higher education management approaches with a new differentiation strategy beyond rankings and accreditations to show scholars and practitioners that authenticity is a way to regain credibility and legitimacy with stakeholders. Due to the inherent limitations of the case study method, our findings are not generalizable. However, we believe that they are applicable to knowledge-intensive firms and professional service firms.

Erratum: Internationalisation of Indian knowledge-intensive service firms: Learning as an antecedent to entrepreneurial orientation

Erratum: Internationalisation of Indian knowledge-intensive service firms: Learning as an antecedent to entrepreneurial orientation

Does online collaboration with customers drive innovation performance?

Purpose– The purpose of this paper is to explore the relationship between the actual usage of online methods for collaboration with customers and firms’ innovation performance. Drawing on theories of knowledge flows and knowledge creation, this study analyses the results of customer collaboration in the online mode in comparison to the offline mode.Design/methodology/approach– The data for the econometric analysis comes from managers of 102 so-called “gazelles”, knowledge-intensive service firms that were characterized by exceptionally stable growth rates in Sweden during 2010 and 2011.Findings– This study confirms the significance of information and communication technology (ICT)-supported collaboration with customers for a firm’s innovation performance. Interacting with customers using online methods has a positive effect on companies’ innovation output. Besides, knowledge-intensive service companies demonstrate more extensive though less intensive use of online channels for collaborating with customers compared to offline methods.Research limitations/implications– The data for this study has typical limitations resulting from the collection method of web-surveying. Future research should refine the findings of this study using various measures of firms’ innovation performance.Practical implications– Firms should be more receptive towards online methods of collaboration with customers because using such strategy can increase their probability to introduce service innovations. The insights from this study are especially valuable for companies in knowledge-intensive service industries because the sample consist of companies that can be regarded as successful cases.Originality/value– This study is one of the first that addresses the issue of the impact of collaborative technologies on innovation performance. The sample of steady-growing gazelle companies adds value to the results.

Implications of customer roles in engineer-to-order service supply chain

This study seeks to find out how knowledge-intensive service firms can improve their performance by more effective management of customer roles in their service supply chain. A single case study method is used to study drilling engineering and well services segment of a multinational oil and gas services company, code-named MISI Oil and Gas Services Company. Conceptual framework for explaining the customer roles in service supply chain is developed and validated using data. Customer as logistics service provider is newly revealed in the study. It is also discovered that through its integrated project management model, the company is able to drastically minimise variability and uncertainty that four of the customer roles introduce into its service operations. MISI Company KPIs are affected by how it manages the roles that its customers assume in its drilling engineering and well services operations.