Professional Service Firms Research Articles

Antecedents of professionals’ self-efficacy in professional service firms: effects of external source credibility and content quality

PurposeProfessional service firm (PSF) performance depends on the accumulation and application of specialist knowledge to find customised solutions to customer problems. However, available research has not examined whether knowledge acquired from external sources affects PSF outcomes by strengthening professionals’ beliefs rather than only by increasing technical competency. Drawing on self-efficacy theory, this study tests a model that links the quality of content acquired from external sources and the credibility of those sources to professionals’ self-efficacy and, in turn, to PSF outcomes (solution quality and firm performance). In particular, this paper aims to consider the case of professional content exchanged through professional social media.Design/methodology/approachA cross-sectional research design was applied. Data were collected from a sample of 208 accountants, auditors and lawyers who used professional social media and were analysed using covariance-based structural equation modelling.FindingsWhen accessing professional content from external sources, source credibility and content quality are significant antecedents of professionals’ self-efficacy, which, in turn, has positive effects on PSF outcomes (solution quality and PSF performance).Research limitations/implicationsSelf-efficacy plays a key role in the link between knowledge acquired from external sources (professional content) and PSF outcomes.Practical implicationsThis study provides recommendations and actionable insights for PSFs, professionals and other actors who create and exchange professional content. Professional associations may also take an active role by contributing and sharing credible and high-quality content, using, for example, professional social media.Originality/valueThis paper advances the current understanding of the effects of professionals’ access to content from external sources on PSF outcomes. It provides an explanation of these effects based on the enhancement of professionals’ beliefs instead of their technical competencies, as indicated in previous research. In addition, it is the first research effort to consider professional social media as a communication channel to exchange content that affects the self-efficacy of PSF professionals.

Managing international professional service firms: a review and future research agenda

PurposeResearch on international professional service firms (PSFs) has grown in recent years, reflecting the increasing relevance of these firms in the global economy. However, to date, no attempt has been made to systematically examine and integrate this literature. This study reviews the body of knowledge on the international management of PSFs and proposes a future research agenda that aims to strengthen the research on international PSFs, by applying the conceptual lens of PSF characteristics.Design/methodology/approachA systematic review of 108 empirical articles on the management of international PSFs was carried out.FindingsThe authors analyse where, how and what research was carried out on the international management of PSFs, and find that currently the field offers few opportunities to integrate findings or explain differences across different types of international PSFs. In recommendations for future research, the authors show how the lens of PSF characteristics can help overcome these issues and unveil promising avenues for future research that will lead to a more fine-grained theorising and understanding of the international management of PSFs.Originality/valueThe study provides a comprehensive state of the art of research on the international management of PSFs and a future research agenda, which builds on PSF characteristics to explore and better understand the heterogeneity of international PSFs, in order to develop more robust explanations of their behaviour and open new research avenues.

“Feeling in Control”: Optimal Busyness and the Temporality of Organizational Controls

This study extends prior research seeking to understand the reproduction and persistence of excessive busyness in professional settings by addressing the relationship between organizational controls and temporal experiences. Drawing on 146 interviews and more than 300 weekly diaries in two professional service firms, we develop a framework centered on the emerging concept of optimal busyness, an attractive, short-lived temporal experience that people try to reproduce/prolong because it makes them feel energized and productive as well as in control of their time. Our findings show that individuals continuously navigate between different temporal experiences separated by a fine line, quiet time, optimal busyness, and excessive busyness, and that optimal busyness that they strive for is a fragile and fleeting state difficult to achieve and maintain. We show that these temporal experiences are the effect of the temporality of controls—that is, the ability of controls to shape professionals’ temporal experience through structuring, rarefying, and synchronizing temporality. Moreover, we find that professionals who regularly face high temporal pressures seek to cope with these by attempting to construct/prolong optimal busyness through manipulating the pace, focus, and length of their temporal experiences, a process we call control of temporality. Our study contributes to a better understanding of the reproduction of busyness by explaining why professionals in their attempts to feel in control of their time routinely end up overworking.

How do non-innovative firms start innovation and build legitimacy? The case of professional service firms

As clients’ needs change, firms need to adapt and innovate, but how do firms innovate if they have not done it before? We study law firms as novice innovators. Law firms are generally conservative and averse to exploration-based innovation. We show that law firms face two challenges in starting innovation: developing innovation capacity and gaining legitimacy for innovative behavior. Employing a qualitative comparative analysis approach, we used 50 in-depth interviews with innovating multinational law firms headquartered in the United Kingdom to present six configurations of factors leading to service innovation in law firms. Clients and competitors play a key role both as innovation stimuli and legitimizing actors. We demonstrate that knowledge-based networks are important for service innovation, but legitimizing strategies are important for novice innovators to ensure innovation is recognized, approved, and diffused.

Managing the Offshoring of Audit Work: Spanning the Boundaries Between Onshore and Offshore Auditors

SUMMARYThe offshoring of external audit work to so-called low-cost countries is prevalent among the Big 4 professional services firms. Despite this, our understanding of how this form of offshoring influences audit practitioners and the audit process is limited. This study examines how and why offshoring emerged as an organizational matter that changed the way audit work is organized in a Big 4 firm context. Our findings demonstrate how changes in the design of offshoring processes influence interactions between onshore and offshore auditors. We uncover how individual “boundary spanners” struggle to coordinate audit work across the multiple boundaries that separate onshore and offshore auditors. Furthermore, we show how the institutionalization of “boundary spanning” functions in organizational structures and processes can have the unintended consequence of widening the boundaries between onshore and offshore auditors. Finally, we offer evidence of the effect of offshoring on the learning process of onshore and offshore auditors.

Managing Technology-Enabled Innovation in a Professional Services Firm: A Cooperative Case Study

Professional Services Firms (PSFs) are an important form of knowledge-intensive organization with an educated and professionalised workforce and a partnership model of governance. This article repo...

From Host Country Nationals to Entrepreneurs: Insights from Professional Service Ventures in Vietnam

ABSTRACTWorking for multinational companies (MNCs) is often viewed as a privilege for host country nationals (HCNs) in emerging economies. This raises the question: Why do HCNs leave their jobs to pursue the hardship of establishing their own business? This article addresses this question by adopting a phenomenon-based approach to study 12 professional service firms in Vietnam. We explorewhyHCNs initially become entrepreneurs and identifyhowthey make this transition. We reveal several idiosyncratic motivations and identify four types of migration pathways: MNC returnee, committed hybrid, transitional hybrid, and direct spin-off. Our findings address the shortcomings of the existing HCNs literature that centers on MNCs’ view and employee entrepreneurship literature that overlooks the context of emerging markets. We find evidence that institutional voids often promote, rather than suppress, entrepreneurship in emerging markets. Importantly, by taking a local perspective, our findings help MNCs increase their awareness that in the fast-growing market of Vietnam, a brain drain might occur as a result of HCNs becoming entrepreneurs.

Seeding the cloud: Consultancy services in the nascent field of cyber capacity building

Transnational issues in public administration are charged with coordination problems between public and private actors. This is especially true for nascent issue fields. The mitigation of global cyber risks represents one such emerging issue. International organizations have encouraged the development of cybersecurity strategies as an integral part of national security regimes and to strengthen the global security environment. Cyber capacity building (CCB) efforts respond to these calls and disseminate digital risk management to recipient states. At a time where public administrations have not determined a position on CCB, global professional service firms have affirmed the importance of external third-party knowledge on cybersecurity issues. They are “seeding the cloud” to benefit from the field as it matures. Through the application of the Strategic Action Field framework, I highlight how field dynamics are shaped through framing contests and reflected in the practices of policy production.

The impact of environmental turbulence on the strategic decision-making process in Irish quantity surveying (QS) professional service firms (PSFs)

Construction firms operate within a business environment characterized by uncertainty and a lack of predictability, increasing the complexity of strategic decision-making. Construction contractor firms’ strategic response to environmental turbulence is appropriately documented but evidence regarding Construction Professional Service Firms (CPSF’S) remains scarce. CPSF’s are characteristically different from contractor organizations due to the intangibility of services and high knowledge intensity. The purpose of the study is to ascertain the impact of environmental turbulence on strategic decision-making process characteristics in CPSF’s, specifically Irish Quantity Surveying (QS) practices. Using a mixed-methods research strategy, data collected over two dissimilar stages on the economic cycle is presented. A comparative analysis over time exposes the varied impact of environmental turbulence on strategy process characteristics, however, a notable shift in the strategic choice is evident. An emergent approach to strategizing coupled with a move from written strategic plans is evident, while competitor analysis remains superficial. A taxonomy of the strategic decision-making process is derived from the empirical data which uniquely highlights the role of path dependence for CPSFs. The paper provides theoretical advancement in the discipline of CPSF strategy and also identifies a crucial component for consideration in driving transformational change required across the sector.

Client-Related Factors and Collaboration Between Human Assets

Collaborations between individuals in firms have important implications for the development of relational and human capital. In knowledge-intensive contexts where collaborations are formed to deliver services to clients, collaboration decisions can involve nontrivial tradeoffs between short-term and long-term benefits: individuals and firms must carefully manage the tradeoffs between leveraging existing relational and human capital for the reliable performance of repeat collaboration and creating new relational and human capital through new collaboration. Building from the premise that servicing clients is central to collaboration decisions in human asset–intensive firms, we examine how client-related factors shape collaboration decisions among lawyers (partners) in UK law firms providing M&A legal advisory services. We focus on three key client-related dimensions that we predict govern collaboration decisions: the depth of individual- and firm-level relationships with the focal client, key client attributes that reflect the client’s status and its use of different firms to undertake its outsourced work, and client-driven individual- and firm-level resource constraint. Our empirical findings support our proposition that client-related factors influence the pattern of collaborations between individuals in firms. We also reveal how client-related factors at the individual level can have opposite effects on collaboration decisions from those at the firm level. Overall, our findings contribute to research on relational capital, strategic human capital, team formation, professional service firms, and the microfoundations of strategy.

Protectionism through legislative layering: Implications for auditors and investors

Protectionism is on the rise. Although it tends to be associated with tariffs on imports, governments are increasingly applying other mechanisms to influence international business. Import substitution initiatives have been used to replace purchases from foreign producers with local alternatives. Russia implemented import substitution through legislative layering where layers of regulation created requirements targeting different industries and companies. Following sanctions imposed in 2014 on Russia, the government responded with additional import substitution efforts. We are interested in effects of such measures on the Big 4, global professional service firms, and the choice of auditors by partially privatized enterprises (PPEs). PPEs have more complex multilevel agency problems because it is less clear who is in charge. We find that companies with state ownership were more likely to switch away from the Big 4, and this was more pronounced for companies in strategic industries. It also contributed to companies switching from the Big 4 to the next tier of audit firms. After 2015, PPEs were less likely to receive a modified audit opinion on IFRS audits. However, auditor changes did not occur at the cross-listed enterprises that are under enhanced monitoring from global investors and foreign stock exchanges.

International management challenges of professional service firms: a synthesis of the literature

PurposeThis paper aims to identify what international management challenges professional service firms (PSFs) face and why they face them.Design/methodology/approachThis study carries a focussed thematic literature review of 102 empirical articles. This paper uses content analysis to extract and aggregate challenges identified by researchers in their fieldwork and then analysed this data using qualitative and quantitative methods.FindingsThis study identifies 10 international management challenges that PSFs face and a number of causes for these challenges. The analysis also suggests that the distinctive characteristics of PSFs generate some of the international management challenges for PSFs.Practical implicationsThis study helps PSF managers understand the international management challenges they may face depending on the specifics of their company, thus helping them better prepare their internationalisation.Originality/valueThis study contributes to providing a greater understanding of what is holding PSFs back in their internationalisation and why. It demonstrates that distinctive characteristics of PSFs may predict the challenges that PSFs will face, thus paving the way for further research on international management in PSFs and for the development of the diagnostic tool for practitioners that could help them to identify which challenges they should prepare for most.

Researchers compare agile and traditional approaches to project management in Russia’s services industry

Purpose The authors wanted to study the theme as there hasn’t been much research into the different factors for high performance in agile versus traditional companies. Design/methodology/approach The authors conducted a quantitative study of Russian professional services firms using structured phone interviews. They compared project-based companies using agile methods with rival firms that used more traditional methods. The questionnaire included questions on the role of HRM, the level of business strategy formalization, the use of strategies to enhance motivation and opportunities. There were also questions about agile frameworks and project management practices. The sample contained 154 companies, 61 of which used agile technologies. Findings They found that agile firms tend to rely more on HMR policies than traditional companies, especially on strategies to enhance motivation and opportunity. Agile companies also have more centralized HRM architectures with less delegation of different levels of management. Meanwhile, the results show that the HRM architectures for successful traditional firms are more diverse. HRM practices in these companies have different levels of importance and various degrees of decentralization and digitalization. Originality/value The authors say their study fills a gap because there hasn’t been much research into the different factors for high performance in agile versus traditional companies. The study, they say, has important theoretical and practical implications, and also provides evidence of the importance of HRM practices for organizational success.

Retaining the learning professional: A survival study on workplace learning in professional service firms

AbstractLowering professional turnover is of paramount importance for professional service firms, as with each professional, crucial proprietary knowledge leaves the firm. Based on the need to retain this crucial knowledge in the firm, this study explores whether factors that drive learning at work also mitigate professionals' turnover behavior. Building on insights from both workplace learning and turnover research, this study follows 96 professional auditors across a period of 5 years to determine how drivers for workplace learning at the organizational, the social interaction, and the individual level relate to turnover behavior. Through survival analysis, we find that those auditors who experience a supportive learning climate at the organizational level were less likely to leave their firm and profession, while those who score high on individual‐level reflection were more likely to leave their firm and profession. We also found that professionals scoring high on reflection leave more quickly when they perceive to work in an unsupportive learning climate—when they experience low synergy across workplace learning levels. Especially observable behaviors, such as providing help and feedback, discussing errors, and building trust, made a significant difference. This study adds to extant research in three principal ways: exploring actual turnover behavior, approaching turnover behavior through a lens of workplace learning, and analyzing interactions between individual‐, social‐ and organizational‐level learning. The findings of this study lead to specific insights for HRD practice.

Successful Partnerships in Emerging Markets: The Moderating Role of Operational Performance

Purpose – With the reported high failure rate among Small and Medium-sized Enterprises (SMEs) in the professional service sector of emerging markets, coalescing their resources via strategic partnerships to effectively compete in the market place is seen as crucial to their growth and survival. This paper investigates the impact of attributes of partnership, communication behaviour and collaborative conflict resolution on partnership success among Professional Service Firms (PSFs) in emerging markets. It further contributes to the body of knowledge by exploring the moderating role of operational performance in the hypothesised relationships. Design/methodology/approach – Relying on a positivistic paradigm, 300 small and medium-sized PSFs were surveyed, yielding a 79% response rate. Descriptive statistics, hierarchical regression and exploratory factor analysis were used to analyse the collected data. Findings – A positive significant relationship was found between two of the three dimensions of attributes of partnership (commitment and coordination) and the success of partnerships. Despite their importance for partnerships, trust and information sharing negatively impacted partnership success in this study. A positive significant impact was however realised for trust and information sharing when operational performance moderated the relationship. Practical implications – PSFs must develop innovative and workable tools to effectively monitor their operational performance given its significant influence on the relationship between attributes of partnership, communication behaviour and partnership success. Social and cultural competence training is needed for staff to improve the relationship bond, trust and collective goals of partnerships. Originality/value – This paper introduces operational performance as a moderating variable to investigate the hypothesised relationships. It offers insights into how PSFs can manage the pertinent issues critical to the effective management of partnerships in emerging markets.

Multinational Company (MNC) Client Influence on the Internationalization of Professional Services Firms: A Panel Data Analysis

Purpose - This paper investigates how the internationalization of professional services firms such as corporate law firms is affected by their multinational corporate clients and further explores firm-level characteristics moderating this relationship. Design/Methodology/Approach - The author has analyzed panel data on overseas branch openings of 233 U.S. corporate law firms from 1986 to 2008 using the negative binomial regression. The author also confirmed the robustness of the results by using the two-stage regression model to address some of the endogeneity issues raised in modeling the relationship between multinational corporate clients and their law firm internationalization. Findings - This study found that professional services firms such as corporate law firms are more likely to open overseas branches when they have been more dependent on multinational companies (MNCs) for their business. Moreover, additional results indicate that the effect of multinational corporate clients on the internationalization of U.S. corporate law firms varies by a particular firm-level characteristic such as firm orientation toward external expansion. Research Implications - By emphasizing existing relationships with the prominent market exchange partners (i.e., MNCs) as interorganizational antecedents of firm internationalization in the professional services sector, our study contributes to the literature on service firm internationalization and the adoption (and diffusion) of organizational forms and practices. This study also offers valuable insights for professional services industry participants and managers alike by shedding light on the interaction between the firm’s external environments and its strategy orientation.

Remote working, management control changes and employee responses during the COVID-19 crisis

PurposeThe authors examine the impact of the sudden shift to remote working, triggered by the coronavirus disease 2019 (COVID-19) crisis, on management control (MC) practices in professional service firms (PSFs). In addition, employee responses to these changes are explored.Design/methodology/approachThe authors carried out a field study of MC changes in PSFs in Italy, the first country in Europe that was severely impacted by COVID-19. Interviews with PSF employees form the primary data source. Pattern matching was used to identify similarities and differences and investigate how employees respond to the MC changes.FindingsAs a response to the shift to remote working, managers at PSFs made various MC-related changes. For instance, they increased the number of online meetings and made use of technologies to monitor employees from a distance. Employees reacted to this by engaging in “voluntary visibilizing practices”, i.e. by trying to make sure they got noted by their superiors, for instance by doing overtime. In addition, collected evidence suggests increased stress levels among employees, changes to employee autonomy, changed perceptions of hierarchies and a weakened sense of relatedness with others in the organization.Originality/valueThis is one of the first studies to examine the impact of the sudden shift to remote working on MC. In addition, this paper contributes by exploring employee responses to the MC-related changes. The findings add to the growing literature on MC and motivation, and the notion of voluntary visibilizing practices is mobilized to warn against over-commitment and self-exploitation.

Deriving Intellectual Capital Bottom-Line in Professional Service Firms

The contribution of professional service firms (PSFs) has always been phenomenal in the knowledge economies. Given the ever-increasing focus on achieving knowledge-based trans-formations, the effectiveness of these firms is highly attributed to the knowledge capabilities embedded in their staff and how efficiently they are utilized in firm's optimal benefit. In view of growing services sector, it is vital for these firms to implement high performance work practices (HPWPs) so as to maintain high-quality services and meet competing client needs. However, the systematic implementation of these practices in the intellectual capital (IC) context is not fully developed. Hence, this research suggests a linkage mechanism on how HPWPs support IC development in the professional service firms. By operationalizing these practices as ability-, motivation-, and opportunity-enhancing bundles, the results indicate a positive effect on intellectual capital and the findings offer practical insights to the managers in service firms on building their knowledge capital and deriving competitive advantage.

How to Develop Collaboration in Drug Development Process: The Role of Professional Service Firms

The innovation chain of the pharmaceutical industry is more and more complex.  In particular, a new type of players, the start-ups founded by researchers (Academic Start-ups) have proven to be particularly effective in the first steps of exploring new, radically innovative technologies. These small start-ups miss the financial resources and the industrial experience necessary to embark in the later stage of technologies’ development. To overcome these limits, what academic start-ups require the most is a collaborative linkage with large biotech and pharma companies. To such end, Business Development Professionals are offering their services to academic start-ups, to set up a collaborative linkage with potential partners. Our article investigates the process of engagement between Academic Start-ups and Business Development Professionals and in particular, we focus on the factors that influence collaboration between the two actors. In order to investigate the development process of collaboration we conducted an exploratory study trough the submission of a semi-structured questionnaire covering different aspects of the engagement process to a sample of business professionals. The study provide first evidences about the main factors that prevent the development of collaborations and provides some suggestions to overcome the challenges that both parts found in the collaboration process.

Researching the Post‐Pandemic Professional Service Firm: Challenging our Assumptions

Researching the Post‐Pandemic Professional Service Firm: Challenging our Assumptions