Internationalization of Professional Service Firms

Abstract

This chapter examines the internationalization of Professional Service Firms (PSFs), outlining its drivers, varying forms, and organizational implications. It argues that conventional internationalization theory does not apply straightforwardly to PSFs. The authors identify three key sources of PSF distinctiveness-governance, clients, and knowledge-and show how these generate not only differences between PSFs and other types of organizations but also heterogeneity amongst PSFs themselves. Based on this, four different forms of PSF internationalization are identified-network, project, federal, and transnational-and the authors note that scholarly interest has mostly focused on the last two of these. The chapter highlights change towards the transnational model as an underlying theme in PSF research. It finds little convincing evidence that this model has been successfully implemented and it is argued that, in general, PSFs are better understood as federal structures controlled by a few powerful offices than as transnational enterprises.

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

“…an integrated organisation with professionals sharing common practices and values (Maister, 1993)) is feasible and appropriate for all PSFs (Muzio and Faulconbridge, 2013;Segal-Horn and Dean, 2009). Building on this, four different forms of PSF internationalisation have been proposed (Boussebaa and Morgan, 2015): the project form (requiring temporary ad-hoc project teams), the network form (independent network of firms working together), the federal form (single brand identity, centralised management and intertwined partnership structure) and the transnational form (firms that balance global efficiency and local responsiveness strategies by means of leveraging learning throughout the firm (Bartlett and Ghoshal, 1989)). Specific PSF industries have been used to exemplify these different forms, and they provide useful building blocks to explore PSF heterogeneity.…”

“…Professional service firms remains unclarified: While there is some evidence to support the idea that PSFs choose the FDI mode (Muzio and Faulconbridge, 2013;Poulfelt et al, 2014;Str€ om and Mattsson, 2006), there is also evidence to suggest PSFs choose from a range of other modes such as networks (Salvoldi and Brock, 2019), franchises (Alon and Bian, 2005;Alon and McKee, 1999) and exports (Leo and Phillippe, 2001). Boussebaa and Morgan (2015) propose four forms of PSF internationalisation, but their implications remain to be explored, and it remains unclear how these can be reconciled with traditional mode classifications.…”

“…Over the past three decades, professional service firms (PSFs) have expanded internationally to achieve impressive global reach (Boussebaa and Morgan, 2015). Today, international PSFs have become important actors for a number of reasons: first, because of how they support the internationalisation of other multinationals; second, because of their influence on institutional actors (Boussebaa and Faulconbridge, 2019;Suddaby et al, 2007); and third because, as BJM 17,1…”

“…As the relevance of PSFs as global actors grows and is recognised, PSFs are coming out of the shadows of management research (Empson et al, 2015). In particular, research on the international management of PSFs has increased in recent years; yet much remains unknown about the phenomenon (Boussebaa and Morgan, 2015), and little has been done to systematically organise and integrate existing research thereon. Moreover, the field suffers from a lack of clarity around its core concept-PSFs-and therefore faces difficulties in establishing the boundaries of applicability of findings; and this hinders more nuanced theorising on the international management of PSFs (Von Nordenflycht et al, 2015).…”

Business Systems Theory and Employment Relations

“…Although this will be bounded by the variety of tasks that such networks are asked to carry out, the ability of professional project networks to recruit specialists in a range of areas, and then integrate them to ensure that the required activities are completed means that they will be more flexible -or, to put it a different way, will be capable of 'being reconfigured' in more diverse ways -than networks more commonly found in co-ordinated industrial districts that are built around key skills and organizational capabilities for a certain economic sector (Whitley, 2007; see also Morgan and Quack, 2005, on 'reciprocity-based' professional networks.) Start-ups in therapeutic biotechnology in Silicon Valley resemble professional project networks in many respects (Whitley, 2007: 14).…”