Strategic management of professional service firms theory and practice

download Strategic management of professional service firms   theory and practice

of 226

  • date post

  • Category


  • view

  • download


Embed Size (px)


Strategic management of professional service firms theory and practice

Transcript of Strategic management of professional service firms theory and practice

  • Strategic Management of Professional Service Firms
  • Stephan Kaiser Max Josef Ringlstetter Strategic Management of Professional Service Firms Theory and Practice 123
  • Prof. Dr. Stephan Kaiser Universitt der Bundeswehr Mnchen Wirtschafts- und Organisationswissenschaften Werner-Heisenberg-Weg 39 85577 Neubiberg Germany Prof. Dr. Max Josef Ringlstetter Katholische Universitt Eichsttt-Ingolstadt Wirtschaftswissenschaftliche Fakultt Lehrstuhl fr ABWL, Organisation und Personal Auf der Schanz 49 85049 Ingolstadt Germany ISBN 978-3-642-16062-2 e-ISBN 978-3-642-16063-9 DOI 10.1007/978-3-642-16063-9 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2010938732 Springer-Verlag Berlin Heidelberg 2011 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting reproduction on microlm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specic statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg Printed on acid-free paper Springer is part of Springer Science+Business Media (
  • Preface Professional service rms, like corporate law rms or management consultancies, provide knowledge-intensive services for businesses. The entire professional service sector is gaining increasing importance both at a microeconomic and macroeconomic level in all developed economies. Among other things the growth of many professional service rms provides evidence of their increasing signicance. On the other hand, this growth provides challenges both for rms strategic development and their managements. This book deals with these challenges. In it we attempt to contribute to the joint effort in combining academic and practical ndings on the subjects of management and strategy in professional service rms and present the results to an interested audience. The book is thus primarily designed for partners and managers in professional service rms, but also addresses students and teachers working in this increasingly important eld. We would like to thank Simon Woll of the Catholic University of EichstaettIngolstadt, who was responsible for the major project coordination tasks, for all his assistance and Adrian Brndl, without whose expert support we would never have been able to complete the book project in such a short time. We hope that this book provides practitioners and academics with a major incentive to investigate professional service rms. We look forward to receiving critical comments and amendments and suggestions as to how this book might be improved. Neubiberg, Germany Ingolstadt, Germany Stephan Kaiser Max Josef Ringlstetter v
  • Introduction Professional service rms play a major role in todays business world. A few examples underline this: Inuenced by strategic consultants, corporate groups realign their strategies and structures. IT service rms help to make corporate processes more efcient. Innovations, e.g., in the automotive industry, are highly dependent on rms of engineering services. Investment banks and corporate law rms are involved in big corporate mergers and takeovers and thereby inuence the image of major corporate groups. In spite of this high de facto inuence and these numerous challenges, professional service rms have so far received comparatively little attention in management literature. This book examines all the essential facets of the strategic management of professional service rms. It both presents the latest academic ndings in a comprehensible form combined with practical implications to provide a brief overview on the current status of research into professional service rms and it can be used as a kind of manual for making strategic management decisions. In its sound analysis of professional service rms it points out some of the special characteristics of the professional services sector to an interested public, it describes the most important challenges, presents useful management concepts and points up future trends. For this purpose the book is divided into three parts. The Part I provides a basic introduction to the world of professional service rms. On this basis, it formulates the main strategic management challenges to professional service rms. The book then presents an overview of the organization of the professional services sector. General types of business and forms of remuneration are also examined at this point. It also examines the various subsectors and their individual characteristics, including corporate law rms, auditing rms, consulting rms, investment banks, recruitment agencies, communications agencies and engineering services rms. The Part II focuses on the management of strategic resources of professional service rms. vii
  • viii Introduction Service quality is a critical feature in the success of professional service rms. It also provides differentiation potential on the highly competitive service markets. For its part, perceived quality helps develop customer trust, another vital resource. The different aspects of the strategic resources of quality and trust are described and explained in detail. Knowledge is considered to be another core resource of professional service rms. It therefore seems obvious that knowledge must be professionally managed. However, the aim is to use corresponding knowledge management to generate innovation. Ultimately, it is innovative concepts and new services that make a professional service rm a market leader. The success factors of knowledge and innovation are introduced in detail, with emphasis on the strategic focus, the core tasks and the critical success and inuence factors of knowledge management and the special challenge of generating innovation in professional service rms. In order to market innovative services, rms must be able to convince clients and customers to use them. This presupposes adequate marketing of the professional service provider and its services. The specic characteristics of the professional service sector requiring consideration and the marketing focus on prospective and existing clients are the main aspects illustrated in the last section of the Part II of the book. The Part III of the book is devoted to the most important topics connected with the management of professionals. Because of their educational background and their vocational socialization they are a unique group amongst those working in this eld. This is one of the issues that also need to be taken into consideration in the context of the management of professionals. Since employees in professional service rms have a special role as knowledge bearers, the fundamental concept of the management of professionals is a vital issue. The objective of management of professionals is the supply of committed and competent professionals. The factors of acquisition, motivation and development of professionals are critical for this purpose. Before dealing with these factors, however, current performance and future requirements on part of the market and clients must be analyzed. The strategic management of professionals must be measured by its success. To increase the efciency of HR measures, rms tend increasingly to concentrate and coordinate individual measures. Firms choosing such an approach are called high performance work systems. The systems, their origins and their respective elements are described at length. Finally, it is expected that this systematization of HR measures has a positive effect on the performance of the company as a whole; in such cases, employee motivation and commitment also play a pivotal role. Respective interdependence is also explained. Finally, the potential of high performance work systems for professional service rms is underlined. The work-life-balance of employees has become a particularly topical subject in the sector of management of professionals for professional service rms. This is
  • Introduction ix due to a change of awareness in society concerning the value of work in comparison to personal life, with a special focus on the family. Work in the professional services sector is generally linked with long working hours and a large amount of travel. It is therefore particularly important to understand how professional service rms deal with this conict-laden issue. A large part of the success of professional service rms is the acquisition of new business. Contacts with former employees are a critical factor here. Professional service rms have recognized this and use their alumni networks to generate new business; one section of this book is therefore dedicated solely to this topic. In the process, the structure of such alumni networks and their strategic relevance for professional service rms is discussed. This forms the basis for extrapolate management implications and pointing out future trends. In Part IV the book extends