The Role of Networks in the Internationalization of Management Consulting Firms: A critical View on traditional Theory

Inhaltsangabe:Introduction: The French economist Jean Fourastié had already predicted the expansion of the service sector in his early work in 1949. Accordingly, the economies of the developed countries were prognosticated a division into the three major branches agriculture, manufacturing and services with an increasing domination of the latter over time. In fact, the actual growth of the tertiary sector even surpassed Fourastié's expectations. 'Knowledge-intensive business services constituted the fastest growing sector in Western economies at the end of the twentieth century'. Within this group of knowledge-intensive business services management consulting represents one of the fastest growing business models. Before the first economic slowdown in the consulting industry started in 2000, the global market for advisory services had grown at rates between 10 and 15 percent. In Europe, the turnover of the consulting sector rose about twenty-seven percent annually during the second half of the nineties. Growth today represents one of the key success factors in the consulting business and firms have to reach certain growth rates in order to stay competitive. There are mainly two different strategies for enterprises to achieve the goal of prosperous growth. Firms can either follow the strategy of diversification or internationalization. An increasing number of consulting firms decides to expand business activities into international markets in order to stay competitive and take advantage of new possibilities associated with globalization. Empirical studies have shown that the propensity of firms to internationalize not only accounts for large multinational corporations but also for small and medium-sized firms. Therefore, scientists and economists have put attention to the internationalization efforts of management consulting firms. Nevertheless, scientific literature about the internationalization of these business models is still scarce. Most of the existing theories are based on empirical findings that refer specifically to material goods and are thus often criticized for not adequately reflecting the unique characteristics of services. Numerous internationalization theories have been developed during the last forty years. While common theories focus on aspects such as transaction costs or knowledge about a particular market, approaches that are more recent underline the central role of relationships and international networks. In my study, I [...]