Resource Reconfiguration in Human-Capital-Intensive Firms

Philipp Meyer-Doyle, John Kenneth Mawdsley and Olivier Chatain
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Philipp Meyer-Doyle: INSEAD - Institut Européen d'administration des Affaires
John Kenneth Mawdsley: HEC Paris - Ecole des Hautes Etudes Commerciales
Olivier Chatain: HEC Paris - Ecole des Hautes Etudes Commerciales

Working Papers from HAL

Abstract: Extant research has highlighted the importance of resource reconfiguration for firm performance and has identified important drivers of the reconfiguration of macro-level resources, e.g. business units, focusing primarily on supply-side factors. Yet less is known about drivers of the reconfiguration of micro-level resources, e.g. human assets, and about the role which demand-side factors play in resource reconfiguration. We address these gaps and investigate how client-related factors influence the reconfiguration of micro-level resources in human-asset-intensive firms. Using fine-grained data on law firms advising on M&A mandates, we find that law firms are less likely to reconfigure their human assets (lawyers) on mandates for high-status clients, but more likely to reconfigure them when a client has a greater proclivity to switch business between multiple suppliers. Law firms also reconfigure their human assets less for incoming client projects when they have provided prior M&A services to the client, but they are more likely to reconfigure them when the client relationship has a broader scope. Finally, we also show that the size of a firm's client portfolio lowers reconfiguration. Our paper extends the literature on resource reconfiguration by explicating antecedents of the reconfiguration of micro-level resources and by highlighting the role demand-side factors play in it. We also contribute to the strategic human capital literature by showing how demand-side factors shape human capital deployment. Finally, we also add to the micro-foundations of resource-based theory by studying important micro-foundational processes underlying a firm's capacity to reconfigure its resources.

Keywords: Strategic Human Capital; Resource Reconfiguration; Resource Based Theory; Micro-Foundations of Strategy; Human-Asset-Intensive Firms (search for similar items in EconPapers)
Date: 2017-06-30
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01941532

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