- The Oxford Handbook of Professional Service Firms
- List of Figures
- List of Tables
- List of Contributors
- Researching Professional Service Firms: An Introduction and Overview
- Theoretical Perspectives on the Professions
- Dynamics of Regulation of Professional Service Firms: National and Transnational Developments
- Internationalization of Professional Service Firms: Drivers, Forms, and Outcomes
- Organizations and Occupations: Towards Hybrid Professionalism in Professional Service Firms?
- Professional Ethics: Origins, Applications, and Developments
- Sources of Homogeneity and Heterogeneity across Professional Services
- Leadership and Professionals: Multiple Manifestations of Influence in Professional Service Firms
- Governance in Professional Service Firms: From Structural and Cultural to Legal Normative Views
- Strategy and Strategic Alignment in Professional Service Firms
- Service Innovation in Professional Service Firms: A Review and Future Research Directions
- Entrepreneurship and Professional Service Firms
- Marketing and Reputation within Professional Service Firms
- Client Relationships in Professional Service Firms
- Outsourcing and Offshoring of Professional Services
- Interplay of Professional, Bureaucratic, and Entrepreneurial Career Forms in Professional Service Firms
- Teamwork and Collaboration in Professional Service Firms: Evolution, Challenges, and Opportunities
- Professional Service Firms and Identity
- Knowledge and Learning in Professional Service Firms
- Diversity and Inclusion in Professional Service Firms
- Strategic Human Resource Management and Performance Management in Professional Service Firms
Abstract and Keywords
This chapter reviews the strategic management choices that are central to Professional Service Firms (PSFs), which in turn undergird their competitive advantage and long-run performance. The first part of the chapter focuses on human capital as a critical resource for PSFs, and explores different ways in which firm value is created by attracting, developing, configuring, and leveraging human capital. Further, it is critical that PSFs’ human capital be aligned with and harnessed to the firm’s objectives, which naturally raises issues related to motivating professionals, the sharing of economic rents with (and among) them, and the overall governance of the firm. The authors draw on these building blocks of strategy in PSFs to explain the corporate strategy decisions (such as service and geographic diversification) that PSFs must make, and discuss the value-creating role of client relationships.
Deepak Somaya is the Steven and Christy King Faculty Fellow and Associate Professor of Strategy and Entrepreneurship at the College of Business, University of Illinois at Urbana Champaign. He also holds a courtesy appointment as Associate Professor in the College of Law and in the Institute for Genomic Biology, an interdisciplinary research center at the University of Illinois. Deepak received his Ph.D. in Business Administration from the Walter A. Haas School of Business at the University of California at Berkeley, his MBA from the Indian Institute of Management (Calcutta), and his B.Tech. in mechanical engineering from the Indian Institute of Technology (Bombay). In his research, he studies how companies strategize about and derive competitive advantage from their knowledge assets, particularly their human capital, relational assets and intellectual property. His research has been published in over twenty-five journal articles, book chapters and conference proceedings, and has received numerous awards including a best dissertation award (Technology and Innovation Division, Academy of Management), several conference best paper awards, and the 2012 California Management Review Best Article Award. He currently serves on the editorial boards of the Journal of Management, Organization Science, and Strategic Management Journal, and is the Associate Program Chair of the Strategic Human Capital interest group in the Strategic Management Society.
John Mawdsley is a 5th year doctoral student in Strategy & Entrepreneurship at the University of Illinois Urbana-Champaign. John’s research interests reside at the intersection of cooperative strategy and strategic human capital. His research agenda seeks to understand the strategic challenges encountered by professional service firms and the firm-level outcomes of strategic choices made by these firms. In particular, John is interested in examining the implications for strategy and performance of professional service firms’ investments in client relationships, how professional service firms build or acquire knowledge-based capabilities for long-run value creation, and how they organize, govern and align knowledge workers to achieve firm goals.
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