Collaboration in Professional Service Firms

This assignment examines the benefits and drawbacks of inter-firm collaboration within the context of professional service firms (PSFs). It discusses how collaboration can leverage synergy, share knowledge, and access external resources to enhance product development and market reach. However, it also highlights potential challenges such as conflict, self-interest, and cultural clashes that can impede successful collaboration. The analysis concludes by emphasizing the importance of understanding these complexities for PSFs seeking to engage in mutually beneficial partnerships.

Running Head: ARTICLE SUMMARY – PSFs & COLLABORATION 1
Title: Article Summary – Professional service firms and collaboration
Name:
Institution:

ARTICLE SUMMARY – PROFESSIONAL SERVICE FIRMS AND COLLABORATION 2
Introduction
The current business environment has become ever more competitive, uncertain and
prone to rapidly change. Faced with such a demanding environment, inter-firm collaboration,
where firms need to work with fellow organizations and consumers to produce superior products
that meet customer needs have come up. This collaboration is able to use synergy, combining
strengths and diluting individual weaknesses to succeed in the demanding business environment.
However, there are both positive and negative elements of such an alliance.
Advantages
Internal product development can be a risky affair. Firms need to commit large amounts
of money and other resources including human resources into a project, without a guarantee that
it is going to work. Through the use of professional service firms, this can be avoided. The
collaboration between two or more firms means that the organizations in question cooperate to
produce a superior product which meets both sets of customers’ needs. PSFs are also able to
access external resources which strengthen their capacity, or enrich their own possessions and
capabilities. In the end, both organizations are able to deliver to the market what they might not
have been able to do and at a much lower cost.
As the PSF’s come together to collaborate and develop something which is superior to
their individual products, they have to engage extensively. With this, they share information and
knowledge with each other. This, therefore, provides an excellent chance for both organizations
to learn in a rigorous environment, where it would have been almost impossible had each
organization been left to its own devices.

ARTICLE SUMMARY – PROFESSIONAL SERVICE FIRMS AND COLLABORATION 3
Disadvantages
Despite these advantages, there are potential negative effects of inter-firm collaboration.
One of the most prevalent is conflict. As the two sets of organization culture and competing
interests meet, there is a temptation to leave the relationship better-off, even at the expense of the
other party. In such a situation, conflict and mistrust are born. If not checked, these issues may
eventually lead to the collapse of the venture, without realizing the intended goals. Closely tied
to this is self-interest of the participating parties. While they may be committed to achieving a
group agenda, their primary objective is to maximize their individual profits. In such an
environment, the firms may bypass the necessary ingredients for successful collaboration,
including sharing knowledge and information.
Conclusion
PSFs are now a necessity in the current and future business environments. They present
several advantages and disadvantages. It is important for firms which are keen on collaboration
to appreciate the importance of these relationships and work to avoid the pitfalls which usually
mean that the intended goals are never achieved.

ARTICLE SUMMARY – PROFESSIONAL SERVICE FIRMS AND COLLABORATION 4
Reference
Heirati, N., et al. (2016). Do professional service firms benefit from customer and supplier
collaborations in competitive, turbulent environments? Industrial Marketing
Management, 1-9, DOI: http://dx.doi.org/10.1016/j.indmarman.2016.02.011