From outsider to insider: how creative professional service firms internationalise

Abstract

Purpose-The management of reputation and status is central to creative professional service firms (CPSFs) rendering the internationalisation process a particular challenge. We build on arguments that internationalisation requires moving from outsidership to insidership within client networks and focus on how CPSFs build signals about quality to start this process. Design/methodology/approach-The exploration draws from the international business, professional services and organizational status bodies of literature. A multiple case study design is developed comprising ten Irish architecture firms. In-depth semi-structured interviews were conducted. Findings-The findings clarify how relationships start in the internationalisation process through signal building. This allows firms to join client networks moving from outsidership to insidership. Our findings systemise three different approaches for CPSFs: from outsidership to insidership within a local market network, within a global industry network and within a global project network. Research Limitations/Implications-Research within other sectoral and geographical contexts could support transferability of the findings. Practical implications-The study has implications for CPSF's international business strategies as it identifies multiple paths to gaining network insidership and the tactics employed to achieve this. Originality/Value-We believe that incorporating signal building mechanisms into the internationalisation process is a novel approach to theorizing about how CPSFs move from outsidership to insidership. We offer important theoretical insights into the international business, professional service firm and organizational status literatures. CPSF business leaders should benefit as it helps them to focus on a portfolio of signal building approaches that can start the internationalisation process.

Motivations and perceived opportunities for partnerships among international business consultancy firms

“…The lack of connections assumed as a result of low presence in the markets and low levels of communication, what is in the literature highlighted as a crucial dimension to develop strong partnerships (Musteen et al, 2010). These results also meet the previous knowledge about the need to signal building for reputation and status in international business and to strengthen networks (McQuillan et al, 2018). In brief, the study shows that higher-status countries such as Germany pay less attention to the possibility of partnerships with low-reputation countries in the case of international business partnerships in the consulting sector.…”

“…To help companies in their internationalisation process, professional consultancy firms have advantages in collaborating with international consultancy services to build better networks, reduce costs and access specific knowledge of markets. The literature has highlighted the importance of partnerships among professional consultancy firms (Greenwood and Empson, 2003;Empson and Chapman, 2006;Empson et al, 2013), but little is known about partnerships between consultancy firms in the context of internationalisation, besides the importance of signal building of status and reputation for the establishment of international networks (McQuillan et al, 2018).…”

“…Sharing the same values and receiving benefits, seems to be the prerequisites for a long-term relationship (Friman et al, 2002). The image of the partner may be important to accept, or not, a collaboration service (McQuillan et al, 2018).…”

“…The organisational identity and the sense of elitism towards the other firm may influence the availability for partnerships between management consulting companies (Stanske et al, 2017). Consulting firms usually aspire to be global, what may also generate conflicts in the establishment of international alliances (Boussebaa et al, 2012), especially with other consultants that are not recognised with similar status and reputation (McQuillan et al, 2018). For that reason, the literature recommends building signals of networks establishments for internationalisation, to get status and reputation that might favour the motivations from global or transnational consulting firms to establish partnerships with local business consultancy companies.…”

A network perspective on foreign entry modes of small knowledge-intensive services firms

“…Contemporary literature theorizing firm internationalization, however, also stresses the importance of network insidership (Johanson and Vahlne, 2011) and knowledge sharing, joint innovation and information gathering with network partners (Chetty and Stangl, 2010;Felzensztein et al, 2015;Hilmersson and Jansson, 2012;Johanson and Vahlne, 2009;Odlin and Benson-Rea, 2017;Paul et al, 2017). Although recent research has suggested that small KIS firms, in particular, leverage strong local embeddedness through client, industry and institutional networks to internationalize (McQuillan et al, 2018), our understanding of the role of the firm's network attributes for entry mode choice remains limited (Sedziniauskiene et al, 2019).…”