Business service firms,service space and the management of change

The growth of business service firms represents the latest stage in a continuing twentieth century process of technological and organizational restructuring of production and labour skills. It is associated with the rising information intensiveness of production and the development of an economy of signs. Business service activities located in service spaces drive innóva.tions both in production technology and in management systems. The co-presence of business service firms with their clients as well as other business service firms shapes the possibilities of trust between them. A detailed case study of the way in which large client firms utilize the services of independent business service companies is provided. This is followed by an examination of the relationship between small firms and business service expertise. A dual information economy may be developing in which large firms are able to search for specialist business service expertise irrespective of its location, while SMEs are tied into local providers of more generalist expertise.     

The influence of co-location in higher education institutions on small firms’ perspectives of knowledge transfer

Since 1980, the UK has experienced a dramatic growth in firms and employment in information–intensive business services, such as management consultancy and market research. Recent expansion of new and small firms operating in these sectors is the focus of a major ESRC–sponsored research project currently under way at Cambridge University Small Business Research Centre.

Small business service firms are able to compete successfully with large firms due to the imperfect nature of the market which characterizes business services demand and supply, together with specialization of expertise. The success of small business service firms depends on informal person–to–person networks, word–of–mouth recommendation and repeal business based on successful earlier assignments or personal contacts acquired, for example, while working in a large consultancy or market research company. This paper examines the types of networks utilized by small business service firms and argues that two distinct types exist: demand– and supply–related networks; the former involves links with clients, the latter links and co–operation between complementary small business service firms.     

Knowledge‐intensive firms: the influence of the client on HR systems

HR systems play a critical role in growing knowledge‐intensive firms (KIFs) by facilitating the conversion of human capital into intellectual capital, which has market value. However, the choice of HR system is constrained by the relatively small number of clients they have in business‐to‐business relationships. This article seeks to understand how and why these client relationships affect the choice of HR practices in these firms. We address this issue by drawing on extensive empirical research currently under way in KIFs. Our research shows that HR practices can be influenced strongly by the client, both directly and indirectly. However, some KIFs will use their HR practices as a means of managing the relationships they have with their clients by shaping their boundaries with their clients and building organisational, professional and client identities. The varying client influence can be understood by examining the nature of the power relationship between the client and supplier, which is influenced by the uniqueness of the services provided. This has implications for our understanding of the factors affecting the exercise of a constrained choice of HR systems.     

R&D Outsourcing and the Effectiveness of Intangible Investments: Is Proprietary Core Knowledge Walking out of the Door?

Intangible relationship‐specific investments can be double‐edged swords, as they facilitate not only the governance of business relationships but also undesired knowledge transfers. Building on transaction costs theory and the relational view of alliances, we analyse the effectiveness of these investments in R&D outsourcing agreements from the viewpoint of the client. We argue that, when outsourcing to business firms, the safeguards adopted by the clients to prevent spillovers may reduce the effectiveness of the supplier's specialized investments. Using original survey data from 170 European and US technology‐intensive firms, we find that the contribution of these investments to client performance decreases the more a client's core knowledge is required to perform the service, except when outsourcing to non‐profits. This suggests that as the appropriability hazards associated with outsourcing to business firms rise, the client is able to capture less value from the supplier's relationship‐specific investments.     

China Chief Operational Manager

Our client is one of the global financial service group companies, which offers products and services from a broad array of financial services providersthis allows our associates to find the very best solution for their clients. These solutions can come in many different forms, including insurance protection, lifestyle changes, or securities products, etc.     

The path to outcome delivery: Interplay of service market strategy and open business models

Firms in a variety of manufacturing sectors as well as the software industry have increasingly embraced services alongside their product portfolios in order to improve financial performance. Yet, the key question “How do service market strategy change and the accompanying business model change interact, and how does their interplay affect value creation?” remains open. Relying on twelve case studies of firms that have shifted towards providing highly advanced services (e.g. outcome-based contracts), theoretical propositions concerning the interplay of market strategy and business model on value creation are derived. The firms studied report two interdependent changes: first, they evolve the market strategy from provision of pure products to provision of services and then outcomes, in order to achieve a better fit with customer needs and to grow their service businesses. Second, they rely increasingly on partners and suppliers to provide new activities that are outside their competence base. This 'open business model' allows them to grow their new service businesses effectively and efficiently. At the same time, however, the shift to a service market strategy requires enhanced accountability to customers and increases the threat of penalties in the case of failure, while reliance on partners and suppliers leads to loss of control over the activity system and increases the threat of failure due to third party dependency. Thus, this paper finds that the success of firms that shift to services and outcomes hinges on their ability to balance the trade-off between increased value (i.e. growth, efficiency and effectiveness) and increased uncertainty associated with service market strategy/open business model interplay.     

Heterogeneity in Professional Service Firms

Research on professional service firms emphasizes similarities in their organization and management and distinctiveness from other types of organization. In this paper we take a different tack and focus on the differences between professional service firms, that is, on heterogeneity across different professional sectors. We argue that differences between professions on a number of dimensions affect the nature of professionals' work and, in turn, the organization and management of firms across different professional sectors. Drawing on the sociology of professions literature we focus on three key dimensions of knowledge, jurisdictional control and client relationships to compare legal, auditing and engineering consulting firms. We consider how differences in these dimensions across the three professional services sectors impact upon the way firms are organized. We offer a number of propositions explicating how differences in the nature of knowledge, jurisdictional control and client relationships have implications for organizational form, team-working and pricing systems.     

The social profitability of business incubators: a measurement proposal

Abstract

Public business incubators are services placed at the disposal of original, generally newly-created projects, to which physical accompaniment, supervision and location are offered at prices below market value. They have as their aim to help set in motion and consolidate these firms during the stages in which they are weaker. The ultimate goal consists in favouring the generation of innovative firms, inducers of high-quality jobs, which can diversify the local business fabric, thus becoming a key tool in local development. The present paper provides a methodology to study the economic – but above all social – impact of business incubators, based on the examination of 40 from the 42 incubators existing in the Valencian Community (a Spanish autonomous region with five million inhabitants). Data analysis allows us to state that, although business incubators are not economically profitable since they need financial aids and public investment to start operating, they do have social profitability, insofar as the activity developed by entrepreneurs permits to provide public administrations – via taxes – with returns exceeding what was invested in these incubators. It has been determined that 2.8 euros (which can be applied to a variety of social areas) are collected via taxes for each euro spent to start them up.     

Public advisory services - theory and practice

Public advisory service to SMEs is a multibillion pound activity throughout the industrialized world. Yet very little research has been done on the theoretical basis for this field. This paper proposes some elements in a theoretical understanding of the rationale behind public measures. The authors argue that public intervention should be considered at two levels, as a public market intervention and as a consultant-client relation at the micro level. At the market intervention level, public advisory service is seen in the perspective of economic theory, comparing neo-classical and neo-Austrian theory. Two different kinds of services are identified and discussed: operational and strategic. At a micro level, the concepts of client identity and clientifying power relations serve to understand the small business manager's way of responding to services. In combining both levels - the market perspective and the micro level - it is argued that the neo-classical theory is connected to operational/expert services and objectifying power technologies. The neo-Austrian theory corresponds with the empirical findings at the micro level showing strategic services embedded in a subjectifying power technology. With the neo-Austrian perspective the rather symmetrical relations between client and consultant at the micro level is comprehensible.     

Enforcement Actions and Auditor Changes

In this paper, we examine whether the uncovering of erroneous financial statements by German enforcement agencies is related to subsequent auditor changes. We argue that enforcement actions are likely to reveal information about the client or its auditor, which might affect auditor choice by initiating an update of mutual expectations. Our empirical findings indicate that firms with erroneous financial statements indeed have an increased probability of subsequent auditor changes. Firms also tend to change from a non-Big4 auditor to a Big4 auditor in this situation, suggesting that clients increasingly seek the reputation and services of Big4 auditors. Big4 auditors in turn do not appear to refrain from taking over error-firms as new clients in the German setting, which is characterized by limited auditor liability. Additionally, auditor changes are more likely to occur before the public announcement of an error, indicating that firms take action as soon as the uncovering of an accounting error becomes sufficiently certain.     

Overview: Strategic human resource management in five leading firms

This article synthesizes findings from five case studies conducted in firms known to be leaders in the management of people. We drew three broad conclusions:

• 1 The foundation of a value‐added HR function is a business strategy that relies on people as a source of competitive advantage and a management culture that embraces that belief;
• 2 A value‐added HR function will be characterized by operational excellence, a focus on client service for individual employees and managers, and delivery of these services at the lowest possible cost; and
• 3 A value‐added HR function requires HR managers that understand the human capital implications of business problems and can access or modify the HR system to solve those problems.

© 1999 John Wiley & Sons, Inc.     

The Stock Market Reaction to the Hiring of Management Consultants: A Signalling Theory Approach

Drawing from signalling theory, this study examines how the stock market reacts to the public announcement of the hiring of management consultants and whether it differentially values clients on the basis of their financial profitability and the brand‐name of the engaged consultant. An event study analysis of 118 client firms that publicly announced the hiring of management consulting firms finds that the stock market, on average, responded positively and significantly to the engagement news. Regression analysis further reveals that the stock market reaction tended to be the highest for client firms that had the highest profitability levels. In addition, the stock market reaction to the hiring announcement was not related to the consultant's brand‐name reputation; clients engaging the most reputable consultants (e.g. McKinsey & Company, Bain, Boston Consulting Group, Booz‐Allen Hamilton) did not realize any different market response than those clients that employed the other consultants. Overall, most client firms that publicly announced the hiring of management consultants experienced a rise in their market value and those that had the highest financial profitability realized the highest increase. Further, the findings imply that there may be boundaries to reputational spillover benefits in partnering relationships.     

Customization and real time information access in integrated eBusiness supply chain relationships

eBusiness enabled information systems and technology have proliferated with the diffusion and technological advances of the Internet. This research examines supply chain management relationships between service providers and clients, focusing on the performance impacts of (1) the level of customization implemented by clients using vendor provided eBusiness solutions and (2) the subsequent real time access achieved with respect to operational information maintained by vendors. The study also focuses on the impacts of the provider's information exchange behavior and both parties’ level of trust. Using dyadic data collected from a logistics services provider and 91 clients, findings show that the level of customization and real time information access has a direct positive impact on performance outcomes realized by both. Additionally, results demonstrate that provider's level of trust in the client positively influences their information exchange behavior, and in turn, information exchange behavior positively impacts client customizations.     

Costs, Institutional Mobility Barriers, and Market Structure: Advertising Agencies as Multiproduct Firms

What accounts for the diversity and limited concentration that has long characterized the organization of the advertising agency industry? This question is addressed by treating an advertising agency as a multiproduct firm. The firm's product line or service mix is defined in terms of the set of different media categories where an agency places the advertising messages that it creates on behalf of its clients. Evidence is presented indicating that the structure of demand and costs in the advertising agency industry conforms to the conditions that MacDonald and Slivinski showed were required for an industry to sustain an equilibrium with diversified firms. Building on this framework, we formulate a set of three hypotheses relating to the realization of product-specific scale and scope economies. The first two hypotheses posit that given low fixed costs and minimal entry barriers, both media-specific scale and scope economies are available and can be exploited by relatively small-size agencies. The third hypothesis suggests that large agencies may experience diseconomies of scope as a consequence of excessive diversification induced by two pervasive industry institutional phenomena: (1) “bundling” of agency services to match client demand for a mix of media advertising, and (2) “conflict policy,” which prohibits an agency from serving competing accounts and operates as a mobility constraint. Utilizing a multiproduct cost function, we estimate media-specific scale and scope economies for a cross section of 401 U.S. agencies in 1987. The results obtained support the set of three hypotheses outlined above. The paper concludes with a discussion of the implications of these findings for the restructuring currently underway in this industry.     

Explaining Vertical Integration Strategies: Market Power, Transactional Attributes and Capabilities

abstract    We analyse vertical boundaries of firms by identifying and comparing industrial, transactional and firm-specific factors in such a way that industrial organization, new institutional economics and the capability-based view are all taken into account. After testing the model in 155 firms in the Spanish meat industry, we observe that only factors associated with both transaction costs and capabilities have a statistical and economic relevance for explaining vertical integration. Firms vertically integrate to create specific investment between stages of the value chain, to internally exploit their pool of knowledge and capacities, and to guarantee quality of inputs and services employed. On the other hand, firms avoid high levels of vertical integration in the presence of high demand changes in order to stay flexible. Finally, providers or clients with market power do not seem to affect vertical boundaries in any consistent way.     

第三方物流的增值服务

当前国际市场第三方物流（3PL）有很高的竞争力。大多数的第三方物流供应商提供一些基本服务,如运输与仓储服务,但很少提供增值服务。研究课题的主要目标是将第三方采购（3PP）作为其第三方供应商的增值服务。3PL提供商应当增加其增值服务,是为了保持其核心的竞争优势。而同时3PP是一种可行的选择。许多我国当地的第三方物流供应商并没有意识到他们的增值服务,因为他们主要只提供基本的服务（运输和仓储）。另外,从买方的角度来看,中小型企业缺乏足够大的购买力,比如数量,所以他们的采购价格相对而言比大企业要高出很多。这个研究提出第三方采购作为其增值服务,一方面能够增加第三方供应商的核心竞争力,另一方面使得我国的中小型企业也能获得更多的利润。     

邮政金融发展社区金融服务模式的探讨

社区金融服务多样,形式灵活,贴近客户。近来,我国的民营银行、城商行、四大国有行都在该领域开展业务,这一变化显然对定位于零售业务的邮储银行产生了影响,文中在对我国目前社区服务归纳总结的基础上,探讨了邮储银行展开社区金融服务应注意的问题和模式选择。     

Differences Between Clients’ and Vendors’ Perceptions of IT Outsourcing Risks: Project Partnering as the Mitigation Approach

Information technology (IT) outsourcing has been a business practice for more than two decades. Researchers have suggested successful risk management as a key factor in successful IT outsourcing projects implementation. The documented investigations, however, have mainly addressed risk management only from a single perspective of either clients or IT vendors. Considering only one perspective allows for an omission of possible risks considered critical by the other party, as suggested by agency theory. This study explored the potential perception inconsistency regarding the risks between the client and the vendor for IT outsourcing projects by using a quasi‐Delphi approach. The analysis results indicated some inconsistencies in the risks perceived by the two parties: (1) the clients regarded (a) lack of vendor commitment to the project and (b) poor vendor selection criteria and process as top critical risks but the vendors didn't; and (2) on the other hand, the vendors perceived (a) unclear requirements and (b) lack of experience and expertise with project activities as significant risks but the clients didn't. Insights into how the client and the vendor perceive risks may help both parties determine how to partner and manage project risks collaboratively to succeed in outsourcing.     

Information systems and technology sourcing strategies of e-Retailers for value chain enablement

In the e-Retail industry, a well-designed IT infrastructure is essential in creating a tightly integrated value chain and delivering high quality service. With intense competition for market share and profits, information systems and technology (IST) sourcing decisions are becoming increasingly important to e-Retail firms to support continued growth and market responsiveness. Drawing on the contingency theory, we examine organizational and environmental factors that influence an e-Retailer's IST sourcing strategy of make versus buy in enabling its value chain activities, and we also look at firm-level performance impacts of IST sourcing decisions that involve bundling across value chain activities. We test the proposed model and hypotheses using a panel data set of 307 firms over the period of 2006–2010. The results show that firms that make transformative IT investments tend to source a smaller portion of IST for their e-Retail value chain activities than firms that pursue automate or informate as their strategic role for IT investment. Capabilities are positively associated with IST sourcing. Firms experienced in e-Retail are more likely to build rather than buy their IST. In addition, we find mimicking behavior for IST sourcing among firms in the same merchandizer category. We find that IT strategic role is strongly associated with growth metric, whereas sourcing decisions predominantly impact operational performance measures. There is partial evidence that alignment between IT strategic role and IST sourcing decisions results in better performance effects. Moreover, complementary IST sourcing of synergistic marketing and sales activities positively impacts Web sales and conversion rate, but the sourcing combination of logistics, operations, and sales activities is associated with lower Web sales and conversion rate.     

浅论服务业营销的顾客关系管理

随着服务业在国民经济中的比重加大,服务业营销也理当引起企业管理者的重视。服务业营销不同于产品营销,其顾客在营销中的地位也与一般商品营销不同。通过对顾客关系进行有效管理,乃至把顾客作为服务企业的核心资产进行管理,提高顾客的满意度和忠诚度,使顾客资产价值实现保值、增值,成为服务企业的竞争优势。