Examining the characteristics and managerial challenges of professional services: An empirical study of management consultancy in the travel, tourism, and hospitality sector

• Author: Rohit Verma,Matthew C. Walsman,Alistair Brandon‐Jones,Michael Lewis
• Published date: 01 March 2016
• Date: 01 March 2016
• DOI: http://doi.org/10.1016/j.jom.2016.03.007

Examining the characteristics and managerial challenges of

professional services: An empirical study of management consultancy

in the travel, tourism, and hospitality sector

Alistair Brandon-Jones

a

,

*

, Michael Lewis

a

, Rohit Verma

b

, Matthew C. Walsman

b

a

Bath School of Management, University of Bath, Claverton Down, Bath, Somerset, UK

b

School of Hotel Administration, Cornell University, 338 Statier Hall, Ithaca, NY, USA

article info

Article history:

Available online 2 April 2016

Accepted by Mikko Ketokivi

Keywords:

Professional service firms

Professional service operations

management (PSOM)

Empirical research

Mixed-method data

Consultancy

Travel, tourism, and hospitality

Contingency

abstract

This paper finds that OM's ‘one-size-fits-all’characterization of professional services, namely high levels

of customer engagement, extensive customization, knowledge intensity, and low levels of capital in-

tensity, does not hold when carrying out a ‘deep dive’(to the best of our knowledge, a first in this area of

OM) into consultancy in the US travel, tourism, and hospi tality sector. We analyse mixed-method data

(semi-structured interviews, focus groups, and a besteworst choice experimental survey) and observe

that consultancy can actually be quite remote and passive and that any periods of face-to-face

‘engagement’will typically be time limited and focused on specific project phases. Moreover, and

further confirming the value of a study that allowed us to investigate professional service operations in a

specific market context, our data suggest this may often be at the behest of the client. The significant

variation observed in levels of customization we interpret as con firming Maister's (1993) notion of a

portfolio of brains,grey hair, and procedural work. We also observed relatively high levels of capital in-

tensity; reflecting perhaps the vintage of most OM characterizations and the dramatic ICT-related

changes that have occurred in all business operations in the last 20 years. The work also demonstrates

the necessity of a more contingent perspective on PSOM. We assess the impact of both firm (scale,

specialization) and individual level (leverage) characteristics to demonstrate significant variation within

what might be expected to be a relatively homogenous group of professional service operations. For

example, investigating the effects of specialization (via a typology of consulting operations: super-

specialists, generalists, deep knowledge traders, deep market knowledge traders) revealed that rela-

tive degree of interaction may be dependent upon degree of expertise, such that it was the super-spe-

cialists in our sample that spent less time with clients and the more generalist firms who were

complementing their limited expert status with high levels of interaction (networking, etc.).

©2016 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND

license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

1. Introduction

Within the, albeit limited (Machuca et al., 2007; Hopp et al.,

2009), professional service operations management (PSOM) liter-

ature generic conceptual perspectives predominate. All ‘profes-

sional’operations ebe they accountants, advertising agencies,

architects, design engineers, doctors, executive recruiters, fashion

designers, insurance brokers, investment bankers, lawyers,

management consultants, media producers, R&D laboratories,

software providers, social work agencies and universities eare

presumed to exhibit certain characteristics. These include high

levels of customer engagement, extensive customization, knowl-

edge intensity, and low levels of capital intensity (Sampson and

Froehle, 2006; Schmenner, 1986; Silvestro et al., 1992). Discus-

sions of shared characteristics may be useful when contrasting

professional services with, for example, mass services. However,

any deeper reflection on the literature or review of the limited

number of focused empirical studies highlight significant variance

in the clients, professionals, bodies of knowledge, regulatory en-

vironments, and competitive landscapes, across different profes-

sional settings. Equally, although in some settings it may be

*Corresponding author.

E-mail addresses: A.Brandon-Jones@bath.ac.uk (A. Brandon-Jones), m.a.lewis@

bath.ac.uk (M. Lewis), rv54@cornell.edu (R. Verma), mcw237@cornell.edu

(M.C. Walsman).

Contents lists available at ScienceDirect

Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom

http://dx.doi.org/10.1016/j.jom.2016.03.007

0272-6963/©2016The Authors. Published by Elsevier B.V. Thisis an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Journal of Operations Management 42-43 (2016) 9e24

accurate to challenge the effectiveness of “standard operating

procedures”(Kellogg and Nie, 1995, p.329) and the managerial

metaphor of ‘cat herding’may indeed resonate (Løwendahl, 2000),

there is limited empirical evidence regarding the specific mana-

gerial challenges that comprise PSOM (Heineke, 1995; Machuca

et al., 2007) and, again, no real reflection on the key contin-

gencies that may shape these challenges. Schmenner's (1986)

elaboration of the challenges associated with different service

types provides some interesting points of departure but detailed

questions remain unanswered. What, for example, have the effects

of ubiquitous information and communications technology (ICT),

globalization and outsourcing, or the increased focus on stan-

dardization had on the nature of PSOM (Metters and Verma, 2008).

Given this context, we identified three key research objectives.

First, we wanted to explore the extent to which generic conceptual

characterizations (i.e. high engagement, customization, and

knowledge intensity, and low capital intensity) align with observed

practice. To do so, we decided to narrow our focus to a particular

professional service type, management consultancy.

1

This focused

approach is in line with previous studies. For example, McNeilly

and Barr (2006) studied accounting services when exploring pro-

videreclient relationships, whilst Boone et al. (2008) collected data

in an architectural engineering context to study learning and

knowledge depreciation within the professional services. More-

over, given that a great deal of professional service competitive

advantage relates to and is derived from client/sector insight and

social capital (Nahapiet and Ghoshal, 1998), it was also appropriate

to limit the study setting to a specific client/market space and

correspondingly we selected the US travel, tourism, and hospitality

(TTH) sector.

2

Such an approach inevitably limits the generaliz-

ability of any findings but given our first objective is, in essence,

looking to disprove a null hypothesis (i.e. that there is no rela-

tionship between service type and operational characteristics), a

single service type focus is suitable. Furthermore, given that ‘level

of client interaction’was a critical variable under investigation, this

approach allowed us to engage with clients in interviews and focus

groups. Our second objective was to investigate the relative

importance of various managerial challenges in a specific profes-

sional setting and here again the ‘deep dive’offered significant

advantages; giving us control over a number of key professional

service-related contingencies (i.e. regulations, competitive and

market dynamics, etc.). Finally, our third objective was to begin to

explore some of the other contingencies, including scale, leverage,

and specialization, that, ex-ante, may influence both operational

characteristics and managerial challenges.

Given the exploratory nature of our research, we adopted a

mixed methods approach, combining semi-structured interviews,a

survey that included a besteworst choice experiment, and a focus

group. The rest of the paper is structured as follows. First, we

provide a synthesis of the literature as the basis for our research

questions. Subsequently, we provide details of our research meth-

odology, including study context, research design, data collection,

and analytical approach. We then present the results of our ana-

lyses in relation to our research questions. Finally, we discuss our

findings, highlight our contributions and limitations, and suggest

avenues for future research.

2. Literature review and research questions

This section reviews the literature relating to our research ob-

jectives and then uses these insights as the basis for research

questions that structure our empirical investigation. First, we re-

view the characteristics of professional service offerings;

combining reflections on the generic/conceptual OM typologies

with specific insights that relate to our chosen empirical focus,

consulting services. Second, we explore the specific challenges that

together comprise PSOM and, third, we reflect on the potential

impact of scale, leverage, and specialization as contingent factors

that might influence the nature of PSOM.

2.1. Characteristics of professional service offerings

Determining the characteristics of a professional service offering

is a significant first step in building an understanding of PSOM.

After all, it is the idiosyncrasies of any service type that corre-

spondingly generate its specific managerial challenges. To date, a

great deal of the reflection on professional service operations has

been shaped by a series of theoretical/conceptual papers. For

example, if there are high levels of client interaction and custom-

ization in a given professional service this could in turn create

significant process variability. Similarly, if a professional service is

reliant on high levels of knowledge intensive judgement this will in

turn contribute to both variation and relatively extended process

throughput times (Sasser et al., 1978; Schmenner, 20 04). Finally,

the extent to which professionals in a given service setting adhere

to explicit external codes of ethics and implicit norms that guide

appropriate behaviour (Fischer et al., 2014), reduces the need for,

and associated costs of, internal service quality monitoring

(Goodale et al., 2008), but may also act to minimize the influence of

operations managers (Harvey, 1990). Here, we examine character-

istics in relation to customer engagement, customization, and

knowledge/capital intensity.

2.1.1. Customer engagement in professional services

Many widely cited service classifications (Maister and Lovelock,

1982; Schmenner, 1986; Silvestro et al., 1992; Wemmerlov, 1990)

differentiate professional services from other service types because

of their high level of customer engagement. Although at its

simplest, this characteristic refers tothe extent to which a customer

is present

3

during the delivery of a service (i.e. front rather than

back office operations), these typologies are also generally referring

to the relative ‘activity’of the interaction (Mersha, 1990; Goodale

et al., 2008). In other words, a professional service is highly inter-

active because it is assumed that there is extensive dialogue be-

tween the client and the provider (Kelloggand Nie,1995; Frey et al.,

2013;Fischer et al., 2014), where both the service requirements and

service package are discussed and designed. It is also asserted that

these high engagement service operations allow the customer/

client to actively intervene with their service processes (Verma,

2000), often to request modifications to what is being delivered.

Given the implication that such high engagement causes a reduc-

tion in efficiency (Chase, 1981) there is, at least in part, an assumed

increase in commercial pressure (Schilling et al., 2012) and a

growing belief that high levels of customer participation in the

creation of professional service offerings may be a ‘double-edged

sword’(Chan et al., 2010).

In our chosen service type econsultancy eassumptions relating

1

Management, human resource, IT, and technology consultancy together

generate more than $500 billion annually. Management consulting alone employs

more than 780,000 people in the US.

2

The travel, tourism, and hospitality sector, is one of the largest in the US

economy with a contribution of $1416 billion (8.4% GDP) and more than 14 million

jobs (9.8% of all employment).

3

Of course, the growth in technology-mediated communication means that the

physical presence of the client/provider may no longer be a critical component of

any interactivity (Froehle and Roth, 2004; Ellram et al., 2008).

A. Brandon-Jones et al. / Journal of Operations Management 42-43 (2016) 9e2410