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Author ORCID Identifier

https://orcid.org/0000-0002-8438-0084

AccessType

Campus-Only Access for Five (5) Years

Document Type

dissertation

Degree Name

Doctor of Philosophy (PhD)

Degree Program

Management

Year Degree Awarded

2020

Month Degree Awarded

September

First Advisor

Bruce Skaggs

Second Advisor

Anurag Sharma

Third Advisor

Rory Eckardt

Fourth Advisor

Anthony Paik

Subject Categories

Business Administration, Management, and Operations | Human Resources Management | Strategic Management Policy

Abstract

Scholars frequently suggest that acquiring new clients is the key to success. This is particularly true for professional service firms (PSFs), where the ability to obtain new clients is considered an integral part of a firm’s competitive advantage. Thus, a great deal of focus in the PSF literature has been on the acquisition of new clients. However, as noted by many practitioners and scholars in the field of management, a firm’s competitive advantage is not exclusively driven by new clients but may be driven also by existing ones. For example, studies have found that firms can generate value by strengthening their relationships with existing clients through the obtaining of sufficient client-related knowledge (i.e., client capital). However, despite the importance of client capital, we know very little about how firms effectively develop and utilize this resource.

In the present dissertation, I attempt to address this issue. I do this by suggesting that PSFs may be able to strengthen their relationships with existing clients (i.e., develop client capital) through the acquisition of human capital from a client-overlapping competitor. More precisely, I contend that, because employees hired from client-overlapping competitors have a better understanding of their clients’ complex needs, know how to approach and deal with clients, and have access to private information about these clients, firms that acquire human capital from a client-overlapping competitor will build stronger (i.e., more embedded) firm-client relationships.

Furthermore, I argue that the aforementioned positive association will be moderated by the characteristics of the acquired human capital and the firm’s ability to integrate it. To elaborate, I argue that, although the acquisition of human capital from client-overlapping competitors might positively impact a firm’s client embeddedness, such an association might diminish when the incoming capital is redundant with existing capital. Second, I suggest that the impact of the acquisition of human capital from client-overlapping competitors on a firm’s client embeddedness will be enhanced if the firm has formed multiple social connections with clients (i.e., multiplexity). More precisely, I claim that, since client-related knowledge is often internally shared among employees, multiplexity between a client and a firm’s employees will facilitate better knowledge integration. Lastly, I argue that the impact of client capital on client embeddedness will weaken as firms acquire more human capital in groups (i.e., employees practice co-mobility). That is to say, I suggest that since co-mobility provokes in-group vs. out-group selection and engenders internal politics, the positive impact of client capital acquisition on a firm’s client embeddedness will diminish the more people are hired in groups.

The hypotheses will be tested using a unique dataset about the top law firms in the United States (e.g., ALM 200). Mainly, I will focus on the human capital acquisition strategy of the top 200 law firms in the U.S. by observing client capital transfer through the lens of employee mobility. Doing so is critical, as employees are often perceived as carriers of valuable knowledge for a firm. To test the hypotheses, I employed an econometric approach and underwent various model specification processes.

The results of the analyses support the idea that acquiring human capital from competitors with similar clients has a positive impact on a firm’s client embeddedness. However, such a positive impact tends to diminish if the incoming client capital is redundant or sourced in clusters.

DOI

https://doi.org/10.7275/17887661

Available for download on Wednesday, September 01, 2021

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