Series of Dissertation
05 / 2007

Siw Marita Fosstenløkken:
Enhancing Intangible Resources in Professional Service Firms
A Comparative Study of How Competence Development Takes Place in Four Firms

ISSN: 1502-2099
ISBN: 978 82 7042 812 0
No. of pages: 368
Price: Nok 350

2007-05-fosstenløkken.pdf


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Abstract
Over the last two decades, there has been a tremendous interest in knowledge, or competence, as the principal source of value creation and economic rent. Inspired by this current, this research project started from curiosity as to how such competence resources are developed. Professional service firms (PSFs) were found particularly interesting to study, as they are highly knowledge-intensive, compete on competence in both markets for clients and employees, and are seen as role models of competent practice. Therefore, this study set out to investigate how competence development (CD) takes place in PSFs. Based on a qualitative case-study of two communication consulting firms and two engineering design firms, the results are quite surprising:

- The PSFs are not particularly sophisticated when it comes to CD priority, CD orchestration, or efforts to enhance CD. Rather to the contrary, “laissez faire” dominates to a large degree, as short term billable hours and client demands tend to crowd out long term investments in CD.

- Considerable CD does take place on an informal basis as a by-product of daily operations. Yet, learning through project work for clients is ad hoc and far from efficiently shared throughout the organizations. In fact, there is very little management, systematization of, or reflection on CD through daily operations.

- The CD processes in each firm predominantly, yet far from ideally, match the firm’s overall strategy: an expert/creativity dominant CD process for the creative problem solving based PSF; an efficiency dominant CD process for the output based PSF; a client interaction dominant CD process for the client relation based PSF.

The project based organization of the PSF work, combined with a variety of clients, each with their own particular demands, seems to some extent to compensate for the surprisingly low priority of CD.

By empirically addressing the development of competence as an intangible resource in PSFs, the notion of PSFs’ excellence when it comes to CD is questioned. Even the very centrality of CD as vital to PSF competitive ability is to some extent questioned. For practitioners, the study suggests that better sharing and utilization of project based learning through ‘CD coordination’ may be helpful, as this relates to a strategic role in the firm.