Knowledge Creation within Professional Service Firms: the Influence of the Institutional Context

This paper presents an analysis of institutional influences upon knowledge creation within professional service firms whose main business is the provision of consultancy services. Such firms, we argue, provide an important setting for examining such influences because their survival depends on their ability to mobilize and synthesize professional bodies of knowledge. They, therefore, directly confront the constraints that institutionalized professions pose for processes of knowledge creation. By exploring the influence of the institutional context, the paper extends earlier work on professional service and knowledge-intensive firms which has tended to adopt an organizational-level focus on knowledge creation. In such work, knowledge creation has been viewed in broad, taxonomic terms (for example, contrasting tacit and explicit forms of knowledge), which has tended to neglect the heterogeneous nature of knowledge and its embeddedness in different institutional contexts. A comparative analysis of two firms located in different institutional contexts (science and the law) seeks to establish some of the major mechanisms through which professional institutions influenced knowledge creation. Specifically, our study focuses on three major arenas in which institutional influences were seen to operate; the relative work autonomy of professional groups; the means of knowledge legitimation; and the social identity formation of professional 1 The authors wish to thank Bob Hinings and two anonymous reviewers for their helpful comments on earlier versions of this paper 13/09/02D:\knowcreateos5.doc 3 3 practitioner. The analysis highlights institutional influences operating in these different arenas in both of our cases. However, significant differences in knowledge creating practices were also observed including different emphases on experimentation versus interpretation, different forms of personal networking, and significant differences in the relative importance of codifying knowledge in documentary form. These differences are explained by focusing on the different institutional means of legitimating knowledge across scientific and legal contexts. In observing such institutional influences on work practices, however, our study does not negate the role and influence of management. Specifically, in the arena of social identity, managers in these case firms sought to accommodate professional norms within firm-specific arrangements, which shaped and mobilized a shared social identity for corporate ends. Managerial effort thus focused on developing a collective social identity based on elitism, as a means of leveraging individual creativity as an organizational resource.