Resource-Based View
By itself, then, the structural-contingency per- spective is helpful but insufficient. But look what happens if we then add another perspective— namely, the resource-based view. This perspective helps to prioritize organizational axes by deter- mining which axis defines the organization’s crit- ical advantage and thus should be afforded pri- macy, and which axes should be subordinated to that axis in order to secure realization of that advantage/capability. The connection with orga- nization design is that managers must first identify the critical axis or axes most responsible for cre- ating, sustaining, or exploiting the resources that provide competitive advantage, and then second, empower these unique sources of advantage via organizational arrangements that provide the re- quired budgets, authority, and human resources that exploit that advantage— even if doing so
deprives the other organizational axes. In short, the critical axis must be identified and then rein- forced by the full range of organizational design elements so as to build a cohesive configuration. Note here the importance of not focusing on or- ganizational parts!
In the successful transnational PSF the critical axis is the ability to customize and focus dispersed state-of-the-art services and expertise for the ben- efit of the firm’s major transnational clients, be- cause it is the large international clients that provide the highest financial returns and generate the projects that excite professionals and enable the firm to recruit the brightest minds (Brock & Yaffe, 2006; Rose & Hinings, 1999). Focusing resources on these clients is thus essential.
To that end the largest and most successful transnational PSFs have begun to identify and target the cross-border business of large interna- tional clients. To draw, on demand, key resources from multiple functions and geographies in order to serve these key clients, firms have reduced the authority of country managers (the geographical axis) in favor of “engagement partners” heading client management teams (Rose & Hinings, 1999, p. 57). Partners and professionals co-opted onto these client teams are then appraised and re- warded according to how well they support the client management team axis. Global knowledge management systems track the business needs and potential of individual clients, training programs deepen the firm’s understanding of a select range of industries and service lines, and trans-border profit pools are selectively used to overcome the latent tension between commitment to local and global clients. Again, we see the importance of the full panoply of design arrangements, harnessed to a collective purpose. Moreover, we can only un- derstand the configuration of organizational parts with reference to the particular managerial and organizational challenges being addressed.
In short, recognizing global client service capa- bilities and relationships as the critical resource simplifies the task of organization design—it guides the prioritizations of axes of organization (client, geography, and professional specializa- tion) and facilitates collaboration across service lines, countries, and industries, within a multiplex
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organizational design (Greenwood, Morris, Fair- clough, & Boussebaa, 2010). And so, implications for the design of client-centered accountability, in- formation, and incentive systems become far clearer.