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30 MANAGING KNOWLEDGE WORK AND INNOVATION

Table 2.1 Types of knowledge-intensive firm
Strategic focus Resources Examples
Client-based Client relations Individually controlled Law and accountancy
practices
Problem-solving Creative problem- Team-based Advertising agencies,
solving – innovation software development, web
design fi rms
Output-based Adaptation of ready Controlled by the Some large management
solutions organization consultancy fi rms
Source: Adapted from Lowendahl (1997).

forms of disciplined-based knowledge or more esoteric expertise and skills, for
example advertising, media, whose major work tasks involve the creation of
new knowledge or the application of existing knowledge in new ways. It follows
then that different types of firm employ different types of knowledge workers.
Lowendahl (1997), for example, suggests that the crucial strategic difference
between knowledge-intensive firms is the role of the professionals employed,
that is, the characteristics of the resource base and the types of project targeted.
She identifies three generic types of knowledge-intensive firm premised on the
firm’s strategic focus (see Table 2.1).
Alvesson (2004) distinguishes between two major types of knowledge-
intensive firm; R&D companies and professional service firms. Professional
service firms deal largely with intangibles and those employed often deal
directly with clients while R&D companies typically produce tangible prod-
ucts and contact between employees and the customer are less direct. This
largely concurs with Lowendahl’s typology which only differentiates further
on the basis of what is produced for the client in terms of either bespoke or
readily adapted solutions/products (be they tangible or intangible). The term
‘knowledge-intensive firm’ is therefore used as a generic term to encompass
many different types of firm operating across sectors. Traditional professional
service firms such as law and accountancy firms, for example, are seen as a
subset of knowledge-intensive firms and have existed as long as the organized
professions. These types of firm generally organize along partnership lines
with recognized codes of practice and clearly defined ‘up-or-out’ career paths.
Despite the changing nature of some of the established professions (Muzio
and Ackroyd, 2005), the majority of professional service firms still tend to
be structured and organized along similar lines – often referred to as the
professional bureaucracy (Mintzberg, 1979). Professional bureaucracies are
organized along traditional hierarchical lines. Legal professionals will occupy
the senior positions within the firm and a range of non-legal professionals will
manage discrete functions within the firm such as human resources, finance
and so on. Small professional service firms tend to be organized along tradi-
tional partnership lines otherwise known as the P2 form whereby the senior

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