ARTICLE 4 PART 2 OF MY SERIES OF WRITUPS ON – BUSINESS SCHOOL – HOW TO MANAGE ?! PROFESSIONAL SERVICE & KNOWLEDGE INTENSIVE FIRMS -sudhanshu

ARTICLE 4 PART 2 OF MY SERIES OF WRITUPS ON – BUSINESS SCHOOL – HOW TO MANAGE ??!!

PROFESSIONAL SERVICE AND KNOWLEDGE-INTENSIVE FIRMS

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There is broad and developing scholarly debate surrounding the organization and processes of KIFs ( Knowledge Intensive Firms) and PSFs. ( Professional Service Firms ). Against the background of knowledge economies, which depend upon knowledge work, there are common elements that suggest similarities between KIFs and PSFs. Underpinning this argument is the crucial common factor that both depend on expertise held and executed by human capital as a core asset - what differentiates them from capita- or information ?intensive firms. We therefore propose an inclusive and integrative framework for characterizing PSFs/KIFs before developing the case for business schools as professional service firms. The framework is inclusive as we draw on literatures on both PSFs and KIFs that extend beyond the core professions such as accountancy, medicine and law.

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The inclusive aspect of our framework addresses the lack of a distinct taxonomy for the structure and practices of PSFs, an issue exacerbated by generalization from the core professions as representative of other professional organizational forms. We initially explore the central theme of expertise. For example, Starbuck observes that ‘many KIFs are not professional firms’ because professions have properties additional to expertise that define their identity. However, Starbuck also underlines the importance that expertise plays in KIFs, which includes firms operating outside core professions:

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Professionals are not the only experts who build their own roles, divide work to suit their own interests, compete for resources, or emphasize autonomy, collegiality, informality and flexible structures.

Other? occupations share these traditions, and some experts have enough demand for their services that they can obtain autonomy without support from a recognized profession.

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Furthermore, in sectors where there has been limited or no formal professionalization of knowledge, there are creative and client-led organizations that closely resemble PSFs. Whether or not a professional body exists, [it is] more meaningful to talk about professional services as a type of service rather than to attempt to classify the people delivering the services’.

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I conceptualize knowledge as an input and I propose ?that ‘knowledge intensive’ signifies the primary importance knowledge holds for a firm; those who possess and utilize knowledge are viewed as crucial for the success of a KIF. This is echoed by those who observes that KIFs are ‘organizations staffed by a high proportion of highly qualified staff who trade in knowledge itself’. I also define KIFs as companies where most work can be said to be of an intellectual nature and where well-educated, qualified employees form the major part of the workforce.

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I ?also refers to PSFs and KIFs in an inclusive way. I consider the following establishments to be either PSFs or KIFs: universities, general hospitals, accounting firms, law firms and engineering firms, among others. It is also emphasized that PSFs are firms that primarily engage in the delivery of expertise to their clients. This signals that the delivery of professional services extends beyond the umbrella of the traditional (and institutionalized) core professions and that expertise holds primary importance in the study of PSFs.

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It can also be ?asserted that PSFs (in their terms, accounting firms and consulting firms among others) can be considered KIFs. However, they are conscious that the role knowledge plays in PSFs has received little research attention and that it might be important in the future to consider it as an objectively definable and key resource for PSFs.

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We therefore conclude that PSFs are certainly knowledge intensive by virtue of their dependence on the expertise of employees. KIFs, by contrast, experience different levels of professionalization. Again, this resonates strongly with the calls for building the theoretical capacity to differentiate between types of PSF.

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As well as endorsing an inclusive definition of PSFs, I propose an integrative understanding of the systems of knowledge work that underpin them. This asserts that ‘there is an interactive relationship between dominant knowledge types and organizational forms. Further, the extent to which tacit knowledge constitutes the knowledge base of the firm, and how it is formed and used are powerfully shaped by the broader institutional context. This has implications for professional knowledge to the extent that ‘[it] is not fixed but situated in a recurring set of unstable conditions, in a variety of localized circumstances. Therefore, it is not only the ‘stock’ of knowledge or expertise held by an organization that makes it effective; it is the combined dynamic processes of formal training, membership selection and application of expertise that operate and interact in an institutionalized context. This reinforces the notion that firms that depend on expertise will experience differing levels of professionalization yet exhibit similarities to traditional core professions.

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Business schools may be assessed as being PSFs across three broad indicators.

-?????? First, in terms of indicators from the literature (i.e. whether and in what sense business schools have been included in accounts of PSFs).

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-?????? Second, organization structure indicates how resources (including knowledge) are coordinated and arranged to provide goods and services within the business environment. This reflects upon how organizations are structured for the co-ordination of expertise in order to deliver professional services.

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-???????? Third, an alternative analytical lens is applied that enables differentiation between types of PSF. We draw on a recent framework by von Nordenflycht which elicits distinctive ?characteristics and their related organizational challenges in order to differentiate distinctive forms of PSFs.

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These three arenas provide the criteria for positioning business schools as a type of PSF.

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Is the business school a professional service firm?

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Henry Mintzberg’s important work on patterns in strategy formation provides a framework for the examination of the business school as a professional organization.

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In his work The Structuring of Organizations (Mintzberg,) he proposes four types of organization: entrepreneurial, machine, adhocracy and professional, of which the latter two most closely resemble a business school and are defined as follows:

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Adhocracy organizations: (characterized by a dynamic external environment and decentralized internal power) organized around teams of experts working on projects to produce novel outputs, generally in highly dynamic settings;

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Professional organizations: (characterized by a stable external environment and decentralized internal power) dependent on highly skilled workers who work rather autonomously, subject to professional norms, mostly providing standardized services in stable settings.

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Mintzberg also studied the strategic development pathways over time of both McGill University as an organization and Mintzberg himself as a researcher, professor and faculty member in McGill. This involved identifying their actions and investigating their origins and the patterns in their decisions and strategy formation.

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Mintzberg described McGill University as the classic professional organization, with a highly trained professoriate that interpreted the organization’s mission of teaching and research individually with little or no collective strategic planning or collective strategic learning. These individual professors carried out their research in a well-established and consistent fashion. Their academic strategies were shaped both by academic colleagues and by the norms of professional bodies such as the US Academy of Management, which sets standards of practice in the management and organizational behavior arena.

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Typically, their individual strategies tended to dominate those of the organization (the business school), whose overall leadership with regard to strategy formation is found to be somewhat weaker than in the ‘adhocracy’ organization of its professionals.

?Mintzberg’s work on patterns of strategy formation and strategic processes clearly establishes the business school as typical of the professional organization form since its professors operate individually and in an idiosyncratic, decentralized fashion managed through relatively weak leadership involving tacit co-ordination and supportive mentoring management styles. This is consistent with my view of the university structure as conforming to the PSF structure (a problem-solving, creative organization) in which academics tend to work independently of each other. Bryman’s important study of leadership in higher education indicates that academics expect their leaders to be supportive managers by ensuring the maintenance of faculty autonomy, consultation over important decisions, the creation of collegiality (both in democratic decision making and mutual co-operation) and by fighting the faculty and department’s position with senior university managers and in university committees.

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He also points out that academics would react against a directive style of leadership since it would interfere with their autonomy. Instead, a minimalist leadership style is preferred. Mintzberg suggests that professionals expect little direct supervision from managers and require a subtle, more nuanced and covert form of leadership consisting of ‘protection and support’ and co-ordination that creates legitimacy and reputation for their department. I also emphasize that ‘management of autonomy’ is central to the leadership of academics. I would like to ?point out that collegiality, in terms of critical debate and open examination, and persuasion should dominate bureaucratic control if processes of strategic change are to be successful in the management of professional academics.

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