Cultivating Closeness: Micro-Level Perspectives on the Transnationalization of Knowledge-Intensive Firms

In today’s global economy, economic actors are increasingly interconnected. Professional service firms (PSFs) play a crucial role in connecting and catering to the globalization of the economy. These firms provide idiosyncratic, knowledge-intensive and highly customized services to other firms. Increasingly, these PSFs are globalizing as well, which poses a number of challenges. Many PSFs encounter problems when they try to centralize decisions, as offering context-dependent services in a variety of cultural and institutional contexts proves to be extremely difficult. With the studies suggested in this proposal, I aim to investigate this phenomenon using two different, but related theoretical frameworks.

The first study looks at the problem of normative control in internationally operating knowledge-intensive firms like PSFs: in such firms, traditional bureaucratic measures to monitor and control work are unsuccessful, because of the specialist and interactive nature of the services offered. Therefore, managers often appeal to a specific organizational identity to instill a sense of loyalty and compliance in their employees. In a multinational environment, such an appeal to a specific identity is difficult, because of the diverse body of employees and customers. I will investigate this phenomenon through a case study of a Dutch subsidiary of a multinational consultancy firm, employing both Dutch and Indian consultants and managers.

The second study uses novel geographic insights to investigate the ways in which employees create, modify and exchange context-sensitive knowledge in an environment with actors from different cultural contexts. The first part of the study uses a deterritorialized notion of proximity and uses qualitative interviews with consultants and managers to reconstruct which proximities are most important. The second part of the study will check the propositions developed in the first part through the analysis of the ego-networks of employees of different PSFs.