Professional Service Firms Research Articles

Training and development in small professional services firms

PurposeThis paper aims to examine whether participation in training and development (T&D) events is associated with employees’ affective commitment and propensity to enact innovative behaviours in small professional services firms. The study also investigates associations between both attitudes towards T&D and policy and practice supportive of T&D and levels of participation in T&D events.Design/methodology/approachData from 203 employees in small professional services firms employing 50 or fewer staff were analysed using regression analysis and PROCESS macro.FindingsOnly policy and practice supportive of T&D was associated with participation levels. Participation in T&D events was positively related to affective commitment. Furthermore, employees who participated in more T&D events were more likely to enact innovative behaviours, while affective commitment mediated the positive relationship between number of T&D events attended and innovative behaviours. Contrary to expectations, neither participation in just training nor participation in just development was associated with either attitudes or behaviours.Practical implicationsThe findings have important implications for small firms which tend to rely on wholly work-based experiences for the development of employees’ knowledge and skills. Such an approach to learning for work may inadvertently shape a workforce that lacks commitment to the organisation and that has a diminished capacity for innovative behaviours.Originality/valueThere is limited research on how T&D affects attitudes and behaviours in small firms. Large and small firms are fundamentally different, thus findings from studies in large firms may not extend to small firms.

Psychological Contract as a Mediator of the Leadership- Turnover Intentions Relationship

We developed and tested a model examining the influence of leadership styles on the psychological contract of different generations of professionals and subsequently their turnover intentions. The study proposed that there is a relationship between leadership styles and psychological contract breach and subsequently the turnover intentions of legal professionals – lawyers, tax advisors, and (candidate) civil law notaries – working in professional service firms. Because of the strategic importance of human capital in a professional service firm, it is important for the continuity of the organization that they will retain their legal professionals and inspire young associates to become future shareholders.

Career customization: Putting an organizational practice to facilitate sustainable careers to the test

Career customization has been suggested as a sustainable solution to the mismatch between traditional career models and the needs of today's workforce. We examine career consequences of Mass Career Customization (MCC) in a Professional Service Firm (PSF). This customization allows employees to tailor their career development up or down on four dimensions (pace, workload, location/schedule, responsibility). Using a multiple wave research design in a firm setting, we explore the impact of customizing up or down on objective and subjective career outcomes by gender and parental status over time. While MCC has some positive outcomes (e.g. no loss in career satisfaction for fathers customizing down; increased performance evaluations for mothers customizing down), MCC also has negative career consequences that can be explained by flexibility stigma, especially for fathers who deviate from the ideal worker norm inherent in PSFs. Our findings inform the debate around the impact of organizational practices generally considered to facilitate sustainable careers. We give practical recommendations for the conditions under which career customization can flourish in a PSF context as well as lessons for promoting sustainable careers in other organizational settings.

External and internal networks and access to HRD resources in small professional service firms

ABSTRACTA key challenge facing small professional service firms (PSFs) in the context of implementing human resource development (HRD) is access to resources. The use of external and internal networks represents an important means of identifying and acquiring needed resources. We utilize resource dependency and network theories to explore the types of networks used by owner-managers to acquire HRD resources and the types of resources that are acquired. We investigate these issues utilizing three case study organizations located in the Republic of Ireland and interview data from owner-managers and employees. We found that small PSFs derived resources from both coercive and advisory external networks, in addition to a variety of internal networks including employees, personal contacts and interdependencies between owner-managers and employees. Different types of HRD resources included systemic, socio-political and strategic resources that helped them meet HRD priorities and goals. We discuss the implications for theory, research and practice.

Collective Leadership Dynamics among Professional Peers: Co-constructing an unstable equilibrium

Professional service firms (PSFs) are characterized by contingent and contested power relations among an extended group of professional peers. Studies of such firms can therefore yield important insights for the literatures on collective leadership and leader–follower relations. Yet to date PSF scholars have neglected the topic of leadership, and leadership scholars have neglected the context of PSFs. Based on 102 interviews across the consulting, accounting and legal sectors, we identify three relational processes through which professional peers co-construct collective leadership: legitimizing, negotiating and manoeuvring. We demonstrate how the relational processes taken together constitute an unstable equilibrium, both in the moment and over time, emphasizing how leadership in PSFs is inherently contested and fragile. Our model contributes to theories of collective leadership and leader–follower relations by foregrounding the power and politics that underlie collective leadership. We highlight the significance of the individual leader within the collective. We challenge assumptions concerning the binary nature of leadership and followership, by showing how colleagues may grant leadership identities to their peers without necessarily granting them leadership authority, and without claiming follower identities for themselves.

Water accounting knowledge pathways

PurposeThere are increasing demands on professional accountants in practice to generate water accounts for clients using knowledge from other disciplines within and outside their firms. Whilst many professional service firms have a broad range of in-house and consulting expertise, professional groups within and between these organisations may not be generating and sharing the knowledge required for successful water accounting. The purpose of this paper is to explore how additional disciplinary skills for water volumetric measurement, understanding of licensing and allocations can effectively and efficiently be shared between the disciplines required to be involved.Design/methodology/approachTwo cross-sectional semi-structured surveys developed using a social network lens were disseminated to Australian accountants operating in professional services firms, and the results were descriptively analysed.FindingsThe authors find that, whilst accounting and engineering are acknowledged as core disciplines for water accounting, there is a need for more standardised measures and frameworks across diverse scales to fit in with current reporting practices and meet stakeholder needs. These need to be nested in a water accounting regulatory model that includes the accountancy professional bodies as a platform for knowledge generation and sharing.Originality/valueThe paper provides evidence of perceived barriers to and pathways for interdisciplinary knowledge networks for a new type of accounting. It demonstrates how regulatory frameworks can potentially assist rather than impede accountants in their contribution to solving of complex corporate sustainability problems.

Innovation management and Value Chain Design: Case of a Small Professional Services Firm

The concepts of innovation and innovation management were usually associated with large firms in developed countries that focused on product manufacturing. More recently, researchers turned to studies of innovation in services and the relevance to small firms in developing countries. This paper explores the relevance and applicability of the concept of innovation management to small firms, particularly in the field of professional services, in the context of a developing state. A qualitative research method was employed involving collection and analysis of published articles, reports, and leading texts on the subject of innovation management. The main finding is that innovation management is highly relevant to small firms especially those that operate in the services sector. The value of the paper lies in the fact that innovation management and value chain innovation were not previously investigated in small professional services firms in the Caribbean, and, therefore, the paper contributes to filling that gap in the literature. The practical implications for managers are that open innovation and services innovation must be embraced, and business model and value chain innovation are critical to small firm delivery of services.

Staffing policies of leading professional service firms

Purpose: The aim of this study is to analyse the prevalence of the staffing policies associated with the characteristics of the two basic types of organisational configurations identified by Institutional theory (Professional Partnership and Managed Professional Business), or conversely, if they have been evolving as a consequence of contextual factors and trends.Design/methodology/approach: Exploratory research was performed through the case study method. Six case studies were conducted in Spanish affiliates of leading multinational management consulting firms.Findings: Our analysis revealed that the staffing policies and practices of the companies differ significantly. It was further deduced that the origin of companies and the practice of activities other than business consulting could influence their staffing policies. It is concluded that mixed models do exist nowadays and that the origin of companies largely determines their policies.Research limitations/implications: Cultural factors among countries could influence HRM policies and practices. Furthermore, the size of companies could determine (or limit) the implementation of certain staffing policies. The study could be extended to a sample of consulting companies of various sizes and countries to enrich the resultsPractical implications: For HR managers, knowing the staffing policies at these major companies is a benchmark of HRM effectiveness to be applied to their own companies. In particular, these cases are relevant for other knowledge intensive organizations.Originality/value: The paper provides current empirical evidence on the HRM staffing policies of leading consulting firms and their evolution

Innovation in knowledge-based professional service firms. An integrated conceptual model

ABSTRACTThe current paper offers a new conceptual model to understanding innovation processes in professional service firms, to make hidden relationships more explicit and to find out what are the issues still unexplored. The paper employs a systematic literature review, and draws upon original categorizations of extant literature, to identify main processes for each category of PSFs. It unveils connections among a wide range of factors setting a conceptual model for innovation pathways and highlighting neglected questions relevant from both the theoretical and the practical perspectives.

Colonization contests: How both accounting and law firms gain legitimacy in the market for forensic accounting

Considerable research attention has been devoted to the processes of so-called colonization yet, in order to explain the success and transformation of large accounting firms into large conglomerate Professional Service Firms (PSFs). However, we still know little about how these processes may be contested. Drawing on a rhetorical perspective of legitimacy and on in-depth interviews with high-level members of leading accounting and law firms in the forensic accounting market in the Netherlands, our research identifies various rhetorical devices used by these firms to expand and/or defend their legitimacy in a common market, by simultaneously seeking to promote competition and collaboration. By showing how these rhetorical devices relate to the evolving field dynamics, this study provides a deeper and more nuanced understanding of the desired outcomes and primary means of achieving them that are central to colonization contests between PSFs.

Firm Attributes and Performance: A Study of Architectural Firms in Nigeria

The performance of architectural firms has been a concern to the professional bodies. Studies have however shown that there are factors within organisations that influence their performance. From the Resource-Based Theory of the Firm, this study aims to identify attributes in the profiles, structure and strategies of architectural firms, which are associated with the success of these firms. The performance of firms is conceptualized according to profitability, while the attributes considered are the ones identified as resources in the Resource-Based Theory of the firm. Data on the attributes and performance of the firms were obtained from a survey of ninety-two randomly selected architectural firms in Nigeria, using questionnaires and interviews. The results of the discriminant analysis carried out show that factors, which were related to the successes of the firms, include the availability of information technology facilities and the level of specialization of duties. The findings suggest that appropriate sizes, professionally qualified staff; and provision and use of IT facilities were areas that architectural firms can concentrate on for enhanced performance.
 Keywords: Architectural firms, Architectural practice, Firm attributes, Firm Performance, Nigeria, Professional Service Firms.

Turnover and transferable skills in a professional service firm

Retaining the most valuable employees is a core priority of professional service firms (PSFs). Our study addresses turnover (quit) among employees in a PSF that hires lawyers, auditors, and management consultants. We examine the extent to which the decision to quit varies by professions, skills, and job satisfaction in a PSF in Norway. The analyses are based on a survey of employees conducted in 2013 (N = 455) combined with information on those who quit after 28 months. We find that the sub-group of non-certified auditors quit more often than all other professional groups. In addition, we find that client-contact and transferability of skills are positively related to quits, when controlling for job satisfaction, suggesting that these skills provide employees with alternative job opportunities and greater bargaining power. These measures of skills are also positively related to job satisfaction. Our study contributes to the literature on turnover and professions by emphasizing the interplay between the skills of professional workers and job satisfaction in employees’ decision to quit. In addition, we add to our understanding of the concepts of general- and firm-specific skills in a multi-profession context.

RETRACTED: Leadership Variables and Business Performance: Mediating and Interaction Effects

Despite evidence that emotion-based leadership enhances firm performance, little is known about the variables mediating those effects. Adopting a multistakeholder, multimeasure approach, we examined the effects of three mediators (communicating/sharing a vision, organizational climate, and leader–follower trust) on the leadership–performance relationship and their interactive effects on performance in small professional service firms. Using four employee-perceived leadership paradigms (classical, transactional, visionary, and organic), we measured staff and customer satisfaction and financial performance. Findings confirm that the effects of the mediating variables on all performance measures vary with the prevailing leadership paradigm, and interactions between all variables strengthen their effects on performance.

Constructing project business around professional identity: business model strategizing of architectural firms

Creative professional service firms experience difficulties in establishing healthy and sustainable business models, as they must reconcile the often competing value systems upon which the models are based. They continuously negotiate between professional values and beliefs and the firm’s commercial goals, resulting in struggles between identity and strategy. Adopting a work lens, this study investigates the reciprocal tensions between identity and strategy in 17 business model design workshops with members of architectural firms. Observational data show that practitioners collaboratively construct their business models around professional values, thereby strengthening organizational identity, but constraining innovation in their business models. The research contributes to the body of literature on business model design processes by articulating how professional aspects of identity enable and constrain practitioners in shaping and being shaped by their strategic actions and decisions.

Trade-offs in the value capture of architectural firms: the significance of professional value

Architectural firms often have difficulty generating profit from their services as they pursue not only commercial but also professional goals. These goals frequently conflict and have to be balanced during the process of value creation and value capture. So far, literature has focused on the interaction between the perceived use value for the customer and the fee that is paid to the firm. To better understand how professional service firms realize their organizational targets, professional value needs to be included. In this study, in-depth interviews with the architects and clients of nine housing projects provide insight into the content and process of value capture by architectural firms. The data reveal strategies by which architects tried to maximize the capture of professional value at the expense of profit or sometimes even their clients’ perceived use value. These trade-offs in value capture confirm the importance of professional value when studying value creation and capture in a professional service context. This paper provides an understanding of how architectural firms struggle to balance competing goals and highlights the importance of well-managed value capture.

Use of online learning for continuing professional education and development by german audit companies

This paper presents results of an empirical research project on the status of Online Learning from the Perspective of German Audit Companies (Big4 and Next10). The theoretical basis links elements of knowledge management and professional service firms (cf. Kuhnel, 2002; Farkas – Kuhnel, 2016). Results are based on interviews performed by the authors and representatives of the firms. Conclusions on the future structure of Continuing Professional Education or Development initiatives may be drawn from the study.

Career stage dependent effects of law firm governance: A multilevel study of professional-client misconduct

Are governance practices employed by professional service firms equally effective in preventing professional-client misconduct for professionals at different stages of their career? Drawing upon professional-agency theory and the literature documenting professional career patterns, we develop a multilevel theoretical model to answer this question. We test our model in the empirical context of the Dutch legal profession, using firm-level survey data on 142 law firms and individual-level archival data from the 2994 lawyers working for these firms to explain 97 formally adjudicated complaints of professional-client misconduct committed by individual lawyers registered with the Amsterdam Bar Association. We find that the ‘orthodox’ distinction between informal behavioral and formal outcome-based governance practices is too course-grained to receive empirical support, and that firm-level governance practices only reduce professional-client misconduct when they are specifically targeted at the career stage of the lawyers employed. Our findings not only allow us to develop a finer-grained version of Sharma’s professional-agency model, but may also be practically useful in developing firm-level governance practices targeted at different strata of professionals.

An Analysis of Glass Ceiling Perceptions in the Accounting Profession

Access to a deep pool of talent is essential to the success of every professional services firm. The supply of that talent is contingent upon the available rewards for the exercise of that talent, and both the existence of the potential rewards and the beliefs that individuals hold about the existence of the rewards affect the decision to remain in the field. One structural factor that may affect the judgment about whether to remain in a profession concerns promotions based on the gender of the employee (i.e., the “glass ceiling”). In this study, we examine the “glass ceiling” within the context of the accounting profession. While advances have been made within the accounting profession to address the glass ceiling, the continued existence—and perceptions about the continued existence—of the issue exert adverse effects upon the available talent pool and may create long-term problems for the profession. In this study, we investigate glass ceiling perceptions among a large sample of female accounting professionals employed in accounting; the sample includes both public accountants, and those employed in industry accounting. Our study yields the finding of beliefs in bias-driven effects (e.g., a bias against female promotions to the top level), structural effects (e.g., a lack of mentoring opportunities, networking opportunities, and high-profile job assignments), and cultural effects (e.g., a lack of social support from the male leaders within the organization) among these accounting professionals. Glass ceiling perceptions are also influenced by several demographic factors. Furthermore, accounting professionals employed by industry are more likely to report a glass ceiling within their firms than accounting professionals employed by public accounting firms. The findings are of interest to researchers who explore gender-related issues in professional service firms such as the field of accounting, and to senior members of practice who are tasked with ensuring the integrity and quality of the talent pool and the equitable distribution of rewards to employees.

Picking professionals: a client-centric knowledge assessment framework

PurposeThis paper aims to explore how professional competences are defined and assessed by clients of professional service firms (PSFs). Extant research has studied the knowledge base of professionals, but limited research has been conducted to develop an understanding of how clients value this knowledge.Design/methodology/approachThe study is based on in-depth qualitative research design, which is suitable for inductive theory building. The collected data consist of interviews with 80 clients and sellers of professional services.FindingsThe authors offer a framework detailing the interrelationships between knowledge, experience and references as assessed by clients. In particular, references are used to evaluate experience, which in turn function as a proxy for how clients assess knowledge. Also, the study shows how the clients’ assessment of professional knowledge assets involves multiple levels and factors.Research limitations/implicationsLimited research has been conducted to understand client preferences and PSF competitive advantage from a client perspective. This paper contributes to extant literature on knowledge management by integrating it with insights from recent developments within service marketing focusing on client centricity and the role of clients in value creation. This perspective complements and extends what is already known about knowledge management.Practical implicationsThe paper suggests that while it is essential to manage knowledge as such, references and experience has a very central role in selling and commercializing knowledge-intensive services. Thus, to the degree that clients buy knowledge, sellers should think carefully about how experience and references are developed, captured and conveyed to clients. From a client point, the identified framework has value in offering a client-centric conceptualization of knowledge that can be used as a starting point in defining their knowledge needs and in structuring and professionalizing their purchasing efforts related to professional services.Originality/valueKnowledge-intensive service organizations sell their knowledge and resources to clients directly as experts and indirectly through their services. It is therefore imperative for these organizations to understand how their knowledge is evaluated by buyers. The paper takes a unique client-centric perspective in understanding knowledge from a buyer’s point of view and as perceived by the buyer, which largely has been lacking in existing knowledge management research.

Professional service firms as agents of economic globalization: A political perspective

In recent decades, numerous professional service firms have gone ‘global’ in search of new markets and to support clients requiring services across nations. Whilst a lively debate has developed over the organizational implications of this phenomenon, the role of the firms in globalizing the wider world economy has received much less attention. In this paper, we address this imbalance through an inter-disciplinary synthesis of the literature at the intersection of the professions and economic globalization and apply a political perspective to frame our analysis. Our contribution is twofold. First, we argue for a broadening of the research agenda to better elucidate the critical role of professional service firms as agents of economic globalization. This role, we argue, should become a core research theme given the firms are not just businesses offering services across the globe but also active participants in the globalization of the world economy. Secondly, we shed light on and conceptualize the specific power strategies deployed by the firms as part of their role as agents of economic globalization. We develop an integrative framework which, firstly, distinguishes between ‘design’ and ‘implementation’ and, secondly, specifies how the firms exert power to their advantage in each of these related areas. This model provides a theoretical scaffolding for understanding how professional service firms shape and indeed become hegemonic agents of economic globalization.