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Achieving a balanced organizational structure in professional services firms : some lessons from a modeling project
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Kunc, Martin (2008) Achieving a balanced organizational structure in professional services firms : some lessons from a modeling project. System Dynamics Review, Vol.24 (No.2). pp. 119-143. doi:10.1002/sdr.394 ISSN 0883-7066.
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Official URL: http://dx.doi.org/10.1002/sdr.394
Abstract
While many factors affect the organizational shape that managers in professional services firms should achieve, one has the greatest importance: the ratio of junior, mid-level, and senior staff, usually referred to as a firm's leverage. The tensions between short-term (market demand and firm profitability—a static equilibrium issue) and long-term issues (organizational structure and professional development—a dynamic equilibrium issue) were analyzed in a modeling for learning project. Managing a professional service firm implies important trade-offs between satisfying staff development and financial performance. A hiring and promotion proactive policy aimed at satisfying professional staff development leads to an expensive organizational structure without any certainty for future growth perspectives. However, a reactive hiring policy is not better since it burns out mid-level staff due to delays in training and hiring, which increase staff departures. Therefore, a widely applied “up-or-out promotion system” seems to be the right policy for managing professional services firms. Copyright © 2008 John Wiley & Sons, Ltd.
Item Type: | Journal Article | ||||
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Divisions: | Faculty of Social Sciences > Warwick Business School > Operational Research & Management Sciences Faculty of Social Sciences > Warwick Business School |
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Journal or Publication Title: | System Dynamics Review | ||||
Publisher: | John Wiley & Sons Ltd. | ||||
ISSN: | 0883-7066 | ||||
Official Date: | 2008 | ||||
Dates: |
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Volume: | Vol.24 | ||||
Number: | No.2 | ||||
Page Range: | pp. 119-143 | ||||
DOI: | 10.1002/sdr.394 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Restricted or Subscription Access |
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