Determinants and performance effects of the allocation of ownership rights in consulting firms

Richter, Ansgar; Schröder, Katrin

doi:10.1002/job.555

Cited by 18 publications

(29 citation statements)

References 95 publications

(123 reference statements)

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“…To illustrate, first consider the situation where the professionals retain all ownership rights. Here, the costs of reduced diversification and a limited investment base are best countered by the adoption of the lower cost, less formal, exploratory MCS (Richter & Schroder, 2008). Alternatively, when ownership is opened to outsiders, the higher cost of the more formal, boundary MCS is offset by both the ability of the outside owners to diversify and the greater access to capital.…”

Section: Theoretical Foundation and Hypothesis Developmentmentioning

confidence: 94%

“…4 3 There is some evidence of clustering of ownership structures. In a professional services setting, Richter and Schroder (2008) find size, service standardisation, capital requirements and risk to be determinants of ownership, and conclude that it is a combination of these factors that determines the optimal allocation of ownership rights. There are two provisos.…”

Section: Primary Healthcarementioning

confidence: 97%

“…With diffused ownership, there also is the possibility of shirking (Gaynor & Gertler, 1995), as well as the need to co-ordinate decision-making among multiple owners and to control individual activities to achieve efficient outcomes. As a result, Richter and Schroder (2008) propose that internal governance, specifically MCS design, can augment ownership to arrive at a more complete control solution.…”

Section: The Role Of Ownership In Professional Service Organisationsmentioning

confidence: 99%

“…First, a necessary condition for ownership to develop as a complete solution is a stable regulatory and institutional setting (Mintzberg, 1979). In a dynamic environment, efficient ownership may not be quickly achieved due to the long term nature of the ownership arrangements, limits to the cognitive abilities of the contracting parties, and the costs of changing arrangements (Richter & Schroder, 2008). Further, if the industry is, in some sense, relatively immature, ownership measured at a point in time can be considered as exogenous (Larcker & Rusticus, 2007).…”

Section: The Role Of Ownership In Professional Service Organisationsmentioning

confidence: 99%

“…Following Richter and Schroder (2008) and Empson and Chapman (2006), we propose a role for the MCS as part of the control solution. If due to constant changes in the environment, ownership is not yet in equilibrium, there should be variation not only in the observable ownership but also in MCS design.…”

Section: The Role Of Ownership In Professional Service Organisationsmentioning

confidence: 99%

See 4 more Smart Citations

Management control system design, ownership, and performance in professional service organisations

King

Clarkson

2015

Accounting, Organizations and Society

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Section: Theoretical Foundation and Hypothesis Developmentmentioning

confidence: 94%

Section: Primary Healthcarementioning

confidence: 97%

Section: The Role Of Ownership In Professional Service Organisationsmentioning

confidence: 99%

Section: The Role Of Ownership In Professional Service Organisationsmentioning

confidence: 99%

Section: The Role Of Ownership In Professional Service Organisationsmentioning

confidence: 99%

See 3 more Smart Citations

Management control system design, ownership, and performance in professional service organisations

King

Clarkson

2015

Accounting, Organizations and Society

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Post‐acquisition integration processes in publicly owned professional service companies: Senior professional behaviour and company performance

Pickering

2017

J Organ Behavior

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SummaryThe client relationships and tacit knowledge of professionals are professional service firms' (PSFs') major value creating resources producing challenges in generating post‐merger and acquisition value and risks of reducing the productivity or losing key professionals and their clients. The recent emergence of publicly owned PSFs and rapid growth through consolidating smaller privately owned firms potentially increases this risk by integrating small firms and their professionals into large public companies that may be governed very differently. This study explores post‐acquisition integration processes: professional behaviours and associated performance implications in two highly acquisitive publicly owned accounting companies. In one company, the integration process was rapid and heavily directed by senior management, while in the second company, integration was more gradual, initially undirected but then facilitated by senior management. The findings suggest that integration processes can impact the behaviour of professionals and acquiring firm performance. This research contributes to the understanding of post‐acquisition integration processes in PSFs and decision‐making and professional behaviour in recently emerged publicly owned PSFs. The study contributes to knowledge‐based theory by identifying factors that can affect the decision authority of executives and how organisational behaviour can constrain the implementation of executive integration decisions. Copyright © 2017 John Wiley & Sons, Ltd.

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Changing regulation and the future of the professional partnership: the case of the Legal Services Act, 2007 in England and Wales

Aulakh

Kirkpatrick

2016

International Journal of the Legal Profession

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The UK Legal Services Act 2007 permits external financing and unlimited non-lawyer ownership of legal practices through the formation of Alternative Business Structures (ABSs). For many, the impact of this changed regulation on the 'professional partnership', as the dominant organizational form through which legal services are delivered, will be considerable. However, to date few studies have explored this empirically. This paper addresses this gap by examining organisational changes within ABSs to assess how far these firms have departed from the professional partnership model. Focusing upon the ABS population licensed by the Solicitors Regulation Authority between January 2012 and August 2015, the study findings show a continuum of organizational responses against four specified indicators: incorporation, multi-disciplinary practices, non-lawyer ownership, and external investment. These range from those that depart little from traditional practices to those that are more radical. We conclude that, whilst regulatory reform has yet to dislodge the dominance of the professional partnership, it has disturbed the status quo and increased the variety of 'economic units' within which legal services are delivered.

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Determinants and performance effects of the allocation of ownership rights in consulting firms

Cited by 18 publications

References 95 publications

Management control system design, ownership, and performance in professional service organisations

Management control system design, ownership, and performance in professional service organisations

Post‐acquisition integration processes in publicly owned professional service companies: Senior professional behaviour and company performance

Changing regulation and the future of the professional partnership: the case of the Legal Services Act, 2007 in England and Wales

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