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Strategic resource decisions to enhance the performance of global engineering services
journal contributionposted on 17.06.2019 by Yufeng Zhang, Zhibo Yang, Tao Zhang
Any type of content formally published in an academic journal, usually following a peer-review process.
This paper extends our understanding of the internationalisation and firm performance (I-FP) relationship of service firms by considering the influence of strategic decisions on three types of slack resources. The research focusses on an important type of service operations − global engineering services, which are a major part of the global economy and represent a distinctive business model in the contemporary business environment. In doing so, we theorise the I-FP relationship by addressing the knowledge-intensive, project-based and people-centric features of engineering service firms (ESFs); and test the relationship with a carefully assembled dataset containing 12 years’ data from 242 ESFs. We identify a negative overall I-FP relationship, i.e. ESFs’ international expansion leads to worse financial performance in general. The presence of slack resources explains why such a result exists. Our findings have significant implications, both for future research on internationalisation and performance and for firms to effectively deploy their resources to support global service operations in a strategic manner.
Seventh Framework Programme of the European Union through Marie Curie Actions IRSES Europe-China High Value Engineering Network (EC-HVEN) under Grant Number PIRSES-GA-2011-295130; and the National Social Science Fund of China for Young Scholars under Grant Number 13CGL010.
- Loughborough University London