Building global capabilities: A study of globalizing professional service firms

This paper examines how globalizing service firms can build the capabilities needed for effective international operations. Beginning with a brief review of relevant literature, it then provides theoretical bases for exploring managerial and organizational capabilities in the globalizing professional service firms (PSF). Against a backdrop of institutional theory, aspects of the resource-based view of the firm are incorporated to help understand what it may take for a firm to transfer its capabilities across national borders and across foreign intra-firm boundaries. We then consider evidence from the recent globalization of PSFs in five managerial and organizational areas in which contemporary PSFs should and do develop capabilities to improve their effectiveness in the global context.