Diversification, Branding, and Performance of Professional Service Firms

[We’re pleased to welcome authors Carolina Castaldi of the School of Innovation Sciences, Eindhoven University of Technology and Marco S. Giarratana of the Department of Strategy, IE Business School, IE University. They recently published an article in the Journal of Service Research entitled “Diversification, Branding, and Performance of Professional Service Firms,” which is currently free to read for a limited time. Below, Dr. Castaldi reflects on the inspiration for conducting this research:]

02JSR13_Covers.indd

What motivated you to pursue this research?

We have been interested for a while in figuring out how service companies manage to grow despite the absence of clear economies of scale/scope. Management consulting firms are an example of firms that define themselves as providing high-end customized services to organizations. If this is the value added that they propose, how can they manage to expand beyond simply hiring more professionals to deliver those specific services? The answer had to be found in the specific way in which these professional service firms diversify.

In what ways is your research innovative, and how do you think it will impact the field?

There is already extensive research on how diversification is at the core of companies’ growth. In this paper we are looking at a very specific type of diversification, namely the transition from offering only services to adding products. In the case of management consulting firms, several new business models are appearing that are based on ICT solutions embedded in software and other tools. These solutions offer clear economies of scale but they change the very nature of the service being offered to clients. What our results suggest is that diversification only translates in economic benefits when it is bounded to services. Moreover, it appears important for these firms to opt for branding strategies based on specialized narrow brands developed for each new service segment.

What advice would you give to new scholars and incoming researchers in this particular field of study?

We would like to encourage more scholars to exploit trademarks data in empirical research at the firm level. In this study we have used trademarks to capture both the product diversification of professional service firms and their branding strategy. Trademarks are registered for specific product and/or service classes. Here we have captured the transition to products by looking at companies shifting their trademark applications towards including service classes. One can also use trademarks to capture the opposite process, namely servitization, i.e. adding services next to products. Trademarks are used extensively across all economic sectors, including service sectors. They are also used by firms of all sizes. These are two properties that make them salient data for constructing novel indicators of market strategies. For more ideas, check out our other papers as well.

Stay up-to-date with the latest research from the Journal of Service Research and sign up for email alerts today through the homepage!

 

Role of Referrers in Hiring

[We’re pleased to welcome authors Jenna R. Pieper of the University of Nebraska-Lincoln, Charlie O. Trevor of the University of Wisconsin-Madison, Ingo Weller of LMU Munich, and Dennis Duchon of University of Nebraska-Lincoln . They recently published an article in the Journal of Management entitled “Referral Hire Presence Implications for Referrer Turnover and Job Performance,” which is currently free to read for a limited time. Below, Dr. Pieper discusses the events and circumstance that inspired this research:]

JOM_42_5_Covers.indd

This paper was motivated by a general curiosity about the critical role of referrers in referral hiring in organizational settings, and originated in a section of my doctoral dissertation. Referral hiring, or the practice of using recommendations of a current employee (referrer) to identify and hire a new employee (referral hire), often accounts for 30% to 50% of an organization’s filling of its job openings. To date, the attention of research and practice has focused primarily on the referral hires and their outcomes, leaving a glaring gap in our understanding of how referrers are impacted by the hiring of a friend or acquaintance. We were therefore interested in gaining insight into how the presence of a referral hire influences referrer performance and voluntary turnover.

Our findings, which are arguably the first to specifically examine how referral hiring impacts referrers, show that referrers are indeed impacted by the presence of their referral hire through a socially enriched workplace. In our study, employees with a referral hire present were 27% less likely to leave than employees without a referral hire present, and their performance improved by 5.1% when a referral hire was present. However, we found that job similarity (indicating heightened workplace exposure) between referrers and their referral hires, when compared to job dissimilarity, was associated with lower referrer job performance. Thus, it seems the costs, such as socialization and informal training, for referrers in similar jobs to their referral hires may offset the performance gains gleamed from the referral hire presence. Most important to our work is that we provide the only empirical evidence to date that referring enhances the social enrichment construct at the heart of referral hire discourse.

I think that future research on this topic should continue to consider the critical role of the referrer in referral hiring. My main advice for scholars would be to consider the interface between the various stakeholders in referral hiring, different referring pathways, the intricacies in how referring hiring unfolds over time, and the contingencies that affect its outcomes. A lot of fascinating contributions can still be made regarding referral hiring.

Finally, our work is important to practitioners. It demonstrates that the presence aspect is crucial. When coupled with the well-established benefits for the referral hire, referral hiring appears to be a value proposition for the firm because performance and retention gains emerge for both referrers and referral hires. Thus, our work would encourage continued practice of referral hiring. Practitioners can also take from our study that it is important to be aware of and work to prevent potential downsides associated with referral hiring.

Stay up-to-date with the latest research from the Journal of Management and sign up for email alerts today through the homepage!

 

 

Read the November 2016 Issue of Journal of Management!

3340359442_b93f0f9aa9_o-1The November 2016 issue of Journal of Management is now available online, and can be accessed for the next 30 days! The November issue covers a variety of topics, including articles on organizational transparency, shared leadership-team performance relations, and the effects of autonomy on team performance.

Authors Anthony J. Nyberg, Jenna R. Pieper, and Charlie O. Trevor contributed the article “Pay-for-Performance’s Effect on Future Employee Performance: Integrating Psychological and Economic Principles Toward a Contingency Perspective,” which suggests that bonus pay may have a stronger effect on future performance than merit pay, among other findings about pay-for-performance. The abstract for the paper:

Although pay-for-performance’s potential effect on employee performance is a compelling issue, understanding this dynamic has been constrained by narrow approaches to pay-for-performance conceptualization, measurement, and surrounding conditions. In response, we take a more nuanced perspective by integrating fundamental principles of economics and psychology to identify and incorporate employee characteristics, job characteristics, pay system Current Issue Covercharacteristics, and pay system experience into a contingency model of the pay-for-performance–future performance relationship. We test the role that these four key contextual factors play in pay-for-performance effectiveness using 11,939 employees over a 5-year period. We find that merit and bonus pay, as well as their multiyear trends, are positively associated with future employee performance. Furthermore, our findings indicate that, contrary to what traditional economic perspectives would predict, bonus pay may have a stronger effect on future performance than merit pay. Our results also support a contingency approach to pay-for-performance’s impact on future employee performance, as we find that merit pay and bonus pay can substitute for each other and that the strength of pay-for-performance’s effect is a function of employee tenure, the pay-for-performance trend over time, and job type (presumably due to differences in the measurability of employee performance across jobs).

Another article from the issue, entitled “Social Media for Selection? Validity and Adverse Impact Potential of a Facebook-Based Assessment” from authors Chad H. Van Iddekinge, Stephen E. Lanivich, Philip L. Roth, and Elliott Junco delves into the hazards that arise when recruiters use social media platforms like Facebook to screen job applicants. The abstract for the paper:

Recent reports suggest that an increasing number of organizations are using information from social media platforms such as Facebook.com to screen job applicants. Unfortunately, empirical research concerning the potential implications of this practice is extremely limited. We address the use of social media for selection by examining how recruiter ratings of Facebook profiles fare with respect to two important criteria on which selection procedures are evaluated: criterion-related validity and subgroup differences (which can lead to adverse impact). We captured Facebook profiles of college students who were applying for full-time jobs, and recruiters from various organizations reviewed the profiles and provided evaluations. We then followed up with applicants in their new jobs. Recruiter ratings of applicants’ Facebook information were unrelated to supervisor ratings of job performance (rs = −.13 to –.04), turnover intentions (rs = −.05 to .00), and actual turnover (rs = −.01 to .01). In addition, Facebook ratings did not contribute to the prediction of these criteria beyond more traditional predictors, including cognitive ability, self-efficacy, and personality. Furthermore, there was evidence of subgroup difference in Facebook ratings that tended to favor female and White applicants. The overall results suggest that organizations should be very cautious about using social media information such as Facebook to assess job applicants.

You can read these articles and more from the November 2016 issue of Journal of Management, which is free for the next 30 days, by clicking here to view the issue’s table of contents! Want to stay current on all of the latest research published by Journal of Management? Click here to sign up for e-alerts to receive notifications for new issues and Online First articles!

*City image attributed to Mark Goebel (CC)

More Than One-on-One: The Impact of Mentoring Relationships on Coworkers

15279320070_6902499a19_zResearch on mentorship in the workplace rarely expands beyond the individuals involved in a mentoring relationship, but what kind of impact does mentorship have on individuals outside the relationship? A recent article from Group & Organization Management from authors Suzanne Janssen, Joël Tahitu, Mark van Vuuren, and Menno D. T. de Jong entitled “Coworkers’ Perspectives on Mentoring Relationships” expands research on mentorship to find out how mentoring relationships impact the performance and climate of teams. The abstract for the article:

Research into workplace mentoring is primarily focused on the experiences and perceptions of individuals involved in the relationship, while there is scarcely any research focusing on the impact of mentoring relationships on their social environment. This exploratory research aims to give insight into how coworkers’ perceptions and experiences of informal mentoring relationships in their workgroup are related to their perceptions of workgroup functioning. The results of 21 Current Issue Coversemistructured interviews show that coworkers believe that mentoring relationships affect their workgroup’s functioning by influencing both their workgroup’s performance and climate. Coworkers applied an instrumental perspective and described how they think that mentoring relationships both improve and hinder their workgroup’s performance as they influence the individual functioning of mentor and protégé, the workgroup’s efficiency, and organizational outcomes. Furthermore, coworkers applied a relational perspective and described how mentoring relationships may influence their workgroup’s climate in primarily negative ways as they may be perceived as a subgroup, cause feelings of distrust and envy, and are associated with power issues. The results of this study emphasize the importance of studying mentoring relationships in their broader organizational context and set the groundwork for future research on mentoring relationships in workgroups.

You can read the article, “Coworkers’ Perspectives on Mentoring Relationships,” from Group & Organization Management for free by clicking here.

Follow us @GroupOrgMgmtWant to stay current on all of the latest research published by Group & Organization ManagementClick here to sign up for e-alerts! You can also follow Group & Organization Management on Twitter–click here to see the most recent tweets!

*Image attributed to Matt Biddulph (CC)

Does the Birth Order of Descendant CEO Sons Impact Family Firm Performance?

3486432433_413fe29886_zFor most family businesses, the transition of leadership from one generation to the next can be a complex period to navigate. For family business researchers, generational transitions present a multi-faceted research subject with a clear impact on family firm performance. In a recent paper published by Family Business Review entitled “Not All Created Equal: Examining the Impact of Birth Order and Role Identity Among Descendant CEO Sons on Family Firm Performance”, authors Mark T. Schenkel, Sean Sehyun Yoo, and Jaemin Kim explore how seemingly small factor, namely the birth order of a descendant CEO, can have a noticeable effect on family firm performance. The abstract for the paper:

This study extends the family firm performance literature by focusing on birth order differences among descendant CEOs. Data collected from a sample of Korean family firms yield three insights. First, descendant birth order is directly associated with differences in the distribution of control through ownership, leadership (i.e., CEO), and the incorporation of outside board participation and governance. Second, descendant birth order also moderates the relationship between outside block Current Issue Coverholdings and firm performance. Third, we find evidence suggesting that because of firm performance differences, first-son descendant CEOs may find themselves more often replaced over time.

You can read “Not All Created Equal: Examining the Impact of Birth Order and Role Identity Among Descendant CEO Sons on Family Firm Performance” from Family Business Review free for the next two weeks by clicking here.

Want to stay up to date on the latest research published by Family Business ReviewClick here to sign up for e-alerts! Interested in submitting your manuscript to Family Business ReviewFind the submission guidelines here!

*Koreatown image attributed to 2ndeye (CC)

Mindfulness Leads to Positive Outcomes at Work

3752743934_586c123f3c_zMindfulness training can help individuals increase their attention and awareness, but how can this present-centered mindset help in the workplace? The recent article published in Journal of Management entitled, “Contemplating Mindfulness at Work: An Integrative Review” from authors Darren J. Good, Christopher J. Lyddy, Theresa M. Glomb, Joyce E. Bono, Kirk Warren Brown, Michelle K. Duffy, Ruth A. Baer, Judson A. Brewer, and Sara W. Lazar delves into the applications of mindfulness at work. Their findings suggest that mindfulness training can have a broad, positive impact across key workplace outcomes. The abstract from the paper:

Mindfulness research activity is surging within organizational science. Emerging evidence across multiple fields suggests that mindfulness is fundamentally connected to many aspects of workplace functioning, but this knowledge base has not been systematically integrated to date. This review coalesces the burgeoning body of JOM 41(3)_Covers.inddmindfulness scholarship into a framework to guide mainstream management research investigating a broad range of constructs. The framework identifies how mindfulness influences attention, with downstream effects on functional domains of cognition, emotion, behavior, and physiology. Ultimately, these domains impact key workplace outcomes, including performance, relationships, and well-being. Consideration of the evidence on mindfulness at work stimulates important questions and challenges key assumptions within management science, generating an agenda for future research.

You can read “Contemplating Mindfulness at Work: An Integrative Review” from Journal of Management free for the next two weeks by clicking here. Want to know all about the latest research from  Journal of ManagementClick here to sign up for e-alerts!

During the month of April, you can access 1.5 million article across SAGE Publishing’s 940+ journals for free–how? Sign up here for free trial access!

*Rock tower image credited to Natalie Lucier (CC)

 

Star Performers: Three Types of Star Employees that Excel at Value Creation

480px-3d3stars.svg

Stellar classification has long been used in astronomy to differentiate stars and predict stellar evolution, but can a similar typology be applied to star employees? In their paper published in Journal of Management, “Let’s Call a Star a Star: Task Performance, External Status, and Exceptional Contributors in Organizations,” authors Rebecca R. Kehoe, David P. Lepak, and F. Scott Bentley suggest a new typology for star employees, based on employee task performance and status. The authors explain how separating performance and status in their typology allows for a better understanding of how employees create value in direct and indirect ways.

The abstract:

We develop a new typology of star employees, wherein we identify three types of stars—universal stars, performance stars, and status stars—on the basis of stars’ unique combinations of task performance and external status. By classifying stars in this way and disentangling task performance and external status as unique and simultaneously important qualities underlying the distinct contributions of different types of stars, we provide a basis for more accurately identifying the full range of individuals who create exceptional value, and we offer novel insights into stars’ JOM 41(3)_Covers.inddvarious influences in organizations. With this foundation, we explore how different types of stars’ distinct qualities and bases of value creation affect both the security of their star standing and their relative abilities to appropriate value. We then expand our focus to consider stars in the broader organizational contexts in which they exist, discussing the implications of stars’ distinct attributes for patterns of value creation, value capture, and value preservation associated with stars’ complementarities and redundancies with other organizational resources. Finally, we propose several lines of inquiry through which future research may leverage the proposed typology to address issues related to the management of different types of stars in the broader organizational contexts in which they are embedded.

You can read “Let’s Call a Star a Star: Task Performance, External Status, and Exceptional Contributors in Organizations” from Journal of Management free for the next two weeks by clicking here. Want to know all about the latest research from Journal of Management? Click here to sign up for e-alerts!