Do firms develop dynamic capabilities differently? The case of professional services firms in New Zealand

<p>Differences in dynamic capabilities (DCs) help explain firms’ abilities to change. DCs research has explored what DCs might be and generic categorisations of them after they have emerged, but little light has been thrown on the specific practices that enable or inhibit their emergence. This study explores how DCs emerge and why firms might develop DCs differently under the same market conditions. This thesis sought to understand these questions and respond to calls for longitudinal empirical studies to extend DC theory by studying the paths of four professional services firms in New Zealand over three decades. Using a multi-case study design and thematic analysis, this research applied Teece’s (2007) framework of sensing, seizing and transforming capabilities to identify the presence of DCs within each case, before attempting to identify the enablers and inhibitors influencing the development of such capabilities. While elements of each generic class of DC were evident in each case, the findings suggest that in order to utilise DCs to adapt effectively to environmental changes, a firm must deploy all three classes of capabilities at the same time. This research contributes to the DC literature by proposing a prioritised typology of antecedents that may help stimulate Teece’s sensing, seizing and transforming DCs, while identifying the rigidities that could inhibit their development. The empirical results reported on in this thesis suggest that similar firms’ development of DCs may be different because of idiosyncratic leadership and culture that can limit a firm’s ability to perceive the importance of DCs. Other characteristics that inhibit the development of DCs include centralised, non-participative cultures and high internal (or inward looking) orientation. These results extend current theory about triggers for developing DCs by identifying that the strongest triggers may be either serious macro-economic events or internally driven by firm-defined goals or strategies.</p>

Do firms develop dynamic capabilities differently? The case of professional services firms in New Zealand

<p>Differences in dynamic capabilities (DCs) help explain firms’ abilities to change. DCs research has explored what DCs might be and generic categorisations of them after they have emerged, but little light has been thrown on the specific practices that enable or inhibit their emergence. This study explores how DCs emerge and why firms might develop DCs differently under the same market conditions. This thesis sought to understand these questions and respond to calls for longitudinal empirical studies to extend DC theory by studying the paths of four professional services firms in New Zealand over three decades. Using a multi-case study design and thematic analysis, this research applied Teece’s (2007) framework of sensing, seizing and transforming capabilities to identify the presence of DCs within each case, before attempting to identify the enablers and inhibitors influencing the development of such capabilities. While elements of each generic class of DC were evident in each case, the findings suggest that in order to utilise DCs to adapt effectively to environmental changes, a firm must deploy all three classes of capabilities at the same time. This research contributes to the DC literature by proposing a prioritised typology of antecedents that may help stimulate Teece’s sensing, seizing and transforming DCs, while identifying the rigidities that could inhibit their development. The empirical results reported on in this thesis suggest that similar firms’ development of DCs may be different because of idiosyncratic leadership and culture that can limit a firm’s ability to perceive the importance of DCs. Other characteristics that inhibit the development of DCs include centralised, non-participative cultures and high internal (or inward looking) orientation. These results extend current theory about triggers for developing DCs by identifying that the strongest triggers may be either serious macro-economic events or internally driven by firm-defined goals or strategies.</p>

Effects of informal learning on work engagement

Purpose The purpose of this paper is to explore the relationships between task-based and interactional informal learning practices in small professional services firms and the moderating role of proactivity in the relationship. Design/methodology/approach Job demand-resources theory was used to develop theoretical arguments for a link between informal learning and work engagement. Data were collected from 203 employees in professional services firms and analysed using structural equation modelling. Findings Analysis of the data showed that opportunities to learn through task-based learning processes and through interactions with supervisors and colleagues were positively related to employees’ levels of work engagement. Furthermore, the strength of relationships between these informal learning practices and work engagement was influenced by employees’ proactivity. Research limitations/implications The limitations pertain to the non-random sampling procedure, cross-sectional nature of the study and the use of self-report measures. These limitations were mitigated by employing rigorous analytical procedures. Practical implications The results suggest that managers are able to influence the quantity and quality of informal workplace learning through strategies such as selecting employees who have a propensity for proactive behaviour, encouraging proactive behaviour, enabling experimentation and reflection and fostering positive interpersonal relations. Originality/value The study links two streams of research that have seemingly not been connected previously. The results suggest that small firms are sites with abundant potential for development of employees’ knowledge and skills and the associated experiences of work engagement.

Training and development in small professional services firms

Purpose This paper aims to examine whether participation in training and development (T&D) events is associated with employees’ affective commitment and propensity to enact innovative behaviours in small professional services firms. The study also investigates associations between both attitudes towards T&D and policy and practice supportive of T&D and levels of participation in T&D events. Design/methodology/approach Data from 203 employees in small professional services firms employing 50 or fewer staff were analysed using regression analysis and PROCESS macro. Findings Only policy and practice supportive of T&D was associated with participation levels. Participation in T&D events was positively related to affective commitment. Furthermore, employees who participated in more T&D events were more likely to enact innovative behaviours, while affective commitment mediated the positive relationship between number of T&D events attended and innovative behaviours. Contrary to expectations, neither participation in just training nor participation in just development was associated with either attitudes or behaviours. Practical implications The findings have important implications for small firms which tend to rely on wholly work-based experiences for the development of employees’ knowledge and skills. Such an approach to learning for work may inadvertently shape a workforce that lacks commitment to the organisation and that has a diminished capacity for innovative behaviours. Originality/value There is limited research on how T&D affects attitudes and behaviours in small firms. Large and small firms are fundamentally different, thus findings from studies in large firms may not extend to small firms.

Women in Global Professional Services Firms

Professional services firms (PSFs) have traditionally relied on professional partnerships as an organizational principle. This system was developed more than a century ago, when women did not actively pursue careers in professional services. Professional partnerships are very resistant to change and have managed to preserve their main features for decades. Their formal and informal practices still have exclusionary effects on female professionals. However, professional services firms are increasingly facing a deregulated, competitive, and very dynamic environment and are pressured by the labor market and client firms to rethink their stance on gender diversity. This chapter presents an overview of the management practices in professional services firms and outlines the major changes in their environment. Recent trends in changing management practices in the professional services sector and their impact on female professionals are analyzed. Implications for theory building and future research on management practices in professional service firms are discussed.

Women in Global Professional Services Firms

Professional services firms (PSFs) have traditionally relied on professional partnerships as an organizational principle. This system was developed more than a century ago, when women did not actively pursue careers in professional services. Professional partnerships are very resistant to change and have managed to preserve their main features for decades. Their formal and informal practices still have exclusionary effects on female professionals. However, professional services firms are increasingly facing a deregulated, competitive, and very dynamic environment and are pressured by the labor market and client firms to rethink their stance on gender diversity. This chapter presents an overview of the management practices in professional services firms and outlines the major changes in their environment. Recent trends in changing management practices in the professional services sector and their impact on female professionals are analyzed. Implications for theory building and future research on management practices in professional service firms are discussed.