Handbook of Research on Entrepreneurship in Professional Services
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Handbook of Research on Entrepreneurship in Professional Services

Edited by Markus Reihlen and Andreas Werr

The expert contributors discuss entrepreneurship and innovation from a number of different perspectives, including the entrepreneurial professional team, the entrepreneurial firm and the institutional environment. The first part of the book looks at the challenges of entrepreneurship specific to the professional service firm while the second explores the creation and exploitation of entrepreneurial opportunities in the professional service team. Part III turns to the organization and Part IV to the management and growth of the entrepreneurial professional service firm. The final part discusses the interplay between professions, firms and the institutional environment.
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Chapter 16: Institutional entrepreneurship: a literature review and analysis of the maturing consulting field

Michael Smets and Markus Reihlen


Professional service firms (PSFs) such as management consultancies, investment banks, and accounting and law firms have gained positions of strong economic and social influence in today's Western economies. The largest PSFs rival multinational corporations in turnover and employment, and many have extended their services beyond the business, politics, and nonprofit sectors (Empson, 2007b; Greenwood, Suddaby, & McDougald, 2006). Management consultants have established themselves as "the world's newest profession" (McKenna, 2006) and "market protagonists" (Faust, 2002b: 45) in knowledge economies; elite law firms act as "sanctifiers" of international business transactions whose influence in many instances supplants, rather than supplements, the role of the state (Flood, 2007), and investment banks are claiming to be doing no less than "God's work" (Arlidge, 2009). This success is to some extent a product of economic trends towards increasing knowledge intensity, servitization, globalization, and rapid innovation-however, by no means exclusively. A considerable part of PSF success is due to professionals' rhetorical and political skills actively to influence the institutional environment in which they operate. For instance, investment banks have shaped the "rules of the game" by embedding former regulators in their ranks or placing loyal employees in prominent political positions who then reinforced the myth of the inevitable "innovation cycle" and legitimized the deregulation of financial markets (Davis, 2009; Economist, 2007). Similarly, research on management fads and fashions has repeatedly recognized how management consultants strategically shape management discourse in a way that establishes their own products and innovations as sources of commercial success (Abrahamson, 1991; Benders & van Veen, 2001; Berglund & Werr, 2000; Kieser, 1997; Suddaby & Greenwood, 2001).

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