New Economic and Socio-Economic Approaches
Edited by Jean Gadrey and Faïz Gallouj
Chapter 6: Networks, Distributed Knowledge and Economic Performance: Evidence from Quality Control in Corporate Legal Services
6. Networks, distributed knowledge and economic performance: evidence from quality control in corporate legal services Emmanuel Lazega This chapter examines the relationship between distributed knowledge and economic performance in a professional, or ‘collegial’, organization. It identifies a few conditions under which the pattern of knowledge flows is most productive for firms stressing quality professional services. In such organizations, the production of services for clients is difficult to routinize, professional expertise and advice cannot be easily standardized, and therefore ‘internal’ transaction costs related to flows of resources, including knowledge, can be assumed to be a large part of total costs for the firm as a whole. The practical problem for professional services firms can be represented as reducing complexity and constructing certainties in order to provide quality advice (Dingwall and Lewis 1983; Lazega, 1992b; Sciulli, 1986) for clients. In order to achieve such knowledge-intensive work on a regular basis, intelligence is shared in two types of situation at least: in common work on cases or in caserelated advice relationships. Saying that intelligence is ‘shared’, however, does not do justice to what really happens in social exchanges and in the flows of knowledge and experience. The important characteristic of such flows is shown to be that knowledge as a resource is efficiently distributed/allocated through two processes: selection of exchange partners (social niche seeking) and concentration of the authority to know (through status competition). Some members emerge as having the authority to know, although such status is fragile (Blau, 1964). These processes of...
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