Adventure of Strategy

If your interest in professional service firm strategy extends beyond just what you need to do within your own firm, and deeper into the lofty realms of the academic aspects of the topic, then this is for you.

Take a look at the web site of the Clifford Chance Centre for the Management of Professional Service Firms at Said Business School at Oxford University. It contains links to a brief overview of some of the research literature on professional service firms and also on the professions. It describes the centre's current research agenda and contains a range of research working papers authored by the centre's faculty. Currently, these working papers are as follows:

No. 009 Tim Morris - 'New practice development: Recipes for success'

Opening Paragraphs: How do professional service firms create a new practice area? How should a fledgling practice be nurtured? What major pitfalls can derail the creation of a new practice? What can law firms learn about developing new practices from leading firms in their sector and in management consulting? Our research shows that nearly half of all new practice attempts fail, often despite considerable investment of time and resources from both individuals and firms. This chapter seeks to explain why certain initiatives grow into fully-fledged new practices, providing stable income streams and opportunities to serve a wider client base, while others stall and fade away or fail soon after they become stand-alone practices.

No. 008 Laura Empson - 'The construction of organizational identity: Comparative case studies of consulting firms'

Opening Paragraphs: Organizational identity has been portrayed as significant for understanding a wide set of issues, from mergers and acquisitions (Empson, 2004), corporate image (Hatch and Schultz, 2003), and strategic change (Gioia and Thomas, 1996), to motivation and commitment (Dutton, Dukerich, and Harquail, 1994), and knowledge sharing (Empson, 2001). Such studies argue that organizational identity is an expression of how organizational members define themselves as a social group in relation to their external environment and how they understand themselves to be different from their competitors. Organizational members develop and express their self-concepts within their organization and the organization in turn is developed and expressed through its members' self-concepts.

Organizational identity is, therefore, more than simply an answer to the question, 'Who are we?' as an organization (Gioia & Thomas, 1996). It presents, potentially, a partial answer to the question 'Who am I?' as an individual.

No. 007 Michael Smets - 'Micro-processes of field construction: Evidence from a global law firm'

Abstract: Organisational fields represent a central concept in institutional theory and discussions of professional work. Notwithstanding the concept's recognised importance, however, empirical definitions have remained vague. Field formation in particular still presents institutional theorists with an under-investigated puzzle. This paper addresses this puzzle by exploring micro-processes of field construction in the daily practice of English and German lawyers from a global law firm. Based on pilot study interview data, it identifies three principal work activities through which lawyers construct their fields: the drafting of legal documents, observations of senior colleagues, and negotiations of appropriate problem-solving approaches. The paper further examines how the nature of lawyers' work in different practice-groups affects the outcomes of these processes.

While limited data make definite claims seem premature, they clearly indicate that English and German finance lawyers focus on common financial products and construct a cross-jurisdictional field around their shared legal practice. Litigators, conversely, focus on disparate sets of legal knowledge that foster field constitution around national legal orders. Accordingly, the paper suggests a more prominent acknowledgement of work activities and interaction as key processes in field constitution. It suggests that institutionalists' understanding of fields may benefit from displacing reified notions in favour of structurationist constructs that appreciate fields as outcomes of meaningful interaction.

No. 006 Samantha Fairclough - 'Institutionalisation and interorganisational cognition: Two perspectives on the development and persistence of the 'magic circle' of United Kingdom law firms'

Abstract: This paper examines how and why a professional elite - the so-called "Magic Circle" of UK law firms - has become a taken-for-granted, legitimate, and extremely durable categorization of the most highly-reputed firms in the UK legal profession. Using both interview and documentary data, this study examines the process of institutionalization and belief formation in the context of two previously unresearched, and unconnected, models - the discursive model of institutionalization proposed by Phillips, Lawrence & Hardy (2004), and the model of industry belief systems described by Porac, Ventresca, & Mishina (2002).

The paper goes on to suggest an amalgamation of the two models, proposing that discourse, and its interactions with cognitive processes, should be given more attention in theories of institutionalization.

No. 005 Tim Morris - 'New practice development in professional service firms'

Abstract: We investigate how new practices evolve in professional services firms (PSFs). We conceptualize a PSF as a portfolio of practices based on contiguous forms of expertise. In our qualitative study of new practice development we argue that four organizing elements interact in the process of new practice development: partner agency, building of a differentiated knowledge base, internal "turf" creation, and securing organizational support. Without these organizing elements new practices are difficult to develop because of political rivalry for resources and reputation, lack of legitimacy, and organizational inertia. These elements interact in distinct ways to provide three pathways through which new practices develop: centre-led, client-pull, and consultant-push.

No. 004 Laura Empson - 'Wrestling with the intangible: Creating value in knowledge-based mergers.'

Abstract: In mergers and acquisitions, knowledge sharing presents a particularly important opportunity for value creation. However, numerous studies have shown that mergers rarely succeed in achieving the anticipated benefits from knowledge sharing. There are many possible reasons for this poor performance, but probably the most convincing explanation is the simplest. In mergers and acquisitions, managers often fail to create value from transferring capabilities (i.e. sharing knowledge) because it is very, very difficult to do so. When seeking to exploit existing knowledge and create new knowledge, managers are wrestling with the intangible.

Professional service firms, such as consulting firms, provide an interesting context in which to study knowledge-sharing because their technical and client-based knowledge represents their key income-generating assets. At the same time, the knowledge-sharing process is likely to be particularly difficult in this context because knowledge in a professional service firm is often tacit and proprietary to individuals. If these individuals are unwilling to share knowledge, or choose to leave the firm altogether, the merger may fail. Lessons learnt in such a complex and risky context can, therefore, yield valuable insights about how to create value by sharing knowledge in mergers and acquisitions more generally.

No. 003 Laura Empson and Chris Chapman - 'Partnership versus corporation: Implications of alternative forms of governance for managerial authority and organizational priorities in professional service firms.'

Abstract: For professional service firms (PSFs) the partnership form of governance is the most effective means of reconciling the potentially competing claims of three sets of stakeholders: shareholders, professionals, and clients. Increasingly PSFs are abandoning this traditional form of governance in favour of incorporation and flotation.

Very little is known about the implications of this trend. We examine an alliance between a partnership and a publicly-quoted corporation and analyse the systems and structures that professionals in both firms deploy in their efforts to preserve and sustain the interpretive scheme of professionalism and partnership. We emphasise need to develop a more nuanced understanding of the relationship between governance as a legal form and governance as an interpretive scheme.

No. 002 Tim Morris - 'The reorganization of power: Radical change in professional service firms.'

Abstract: In this paper, we examine the role of power in radical organizational change. Drawing on a study of change in three professional service firms, we develop a model of change in which power plays a central and defining role. Our study suggests that when organizations experience an environmental shock that affects the core of its activities, the process of radical change will often begin with the reorganization of power in the organization. We also argue, based on this study, that a reorganization of power will primarily shift power either toward specific actors (actor-focused reorganizations) or toward specific systems (system-focused reorganizations), but not both. Finally, our study suggests that radical change will be most successful (most likely to effect deep, sustained organizational change) when reorganizations of power occur that alternate between actor-focused and system-focused shifts.

No. 001 Christopher McKenna - 'Watchdogs, lapdogs or retrievers? Liability and the rebirth of the management audit.'

Abstract: This book chapter argues that the worldwide scandals in corporate governance, exemplified by the failures of Enron, WorldCom, and Parmalat, were a consequence of two decades of surging demand for accounting and consulting services by directors and officers who sought to offset corporate liability for potential managerial malfeasance. This cycle, however, began much earlier, in the emergent regulatory environment of the 1930s. In the 1930s, the fear of increasing legal liability during the Great Depression drove investment firms to hire management consultants to perform "management audits."

During the 1990s, similar fears drove corporate executives to employ consultants to perform modern "management audits" as a form of defensive due diligence. Thus the changing use of consultants at the end of the twentieth century and its lasting institutional consequences can be traced to juridical and regulatory changes that actually began more than half-a-century earlier in the depths of the Great Depression. Far from a lasting, stable solution, the enactment of new regulatory systems like Sarbannes-Oxley appears in this analysis to signal the start of a third cycle in the transfer of corporate liability from directors and officers to their professional advisors.

Comments, as always, are most welcome and can be posted below.

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