Page 64 -

KNOWLEDGE-INTENSIVE FIRMS 53

to the hierarchical ordering based on their own personal experience of working with
others in the firm. As one consultant stated,

Nobody in theory has a job title. Single status applies but obviously some people
are seen as more powerful, more influential, higher status than others – based
purely on what they are seen to contribute to the organization in terms of big
projects or particularly innovative ideas.

Individuals across the firm can therefore command powerful positions within the
informal hierarchy. Their position will be based on their ability to both acquire new
business and command large proportions of project revenue that contribute to their
PRT. Positions within this informal hierarchy, however, are transient and relatively
ephemeral, as new clients and new projects requiring different skills and expertise are
acquired over time.

>> QUESTIONS

1. Define and explain six critical organizational factors that have contributed to
ScienceCo’s growth and ability to retain an expert workforce.
2. What are the potential problems that might arise over time in this organizational
context?
Summary of key learning points

>> Knowledge-intensive firms rely on their workforce for their competitive advantage. There-
fore employee retention is a crucial strategic issue within these types of firm.
>> ‘Knowledge-intensive firm’ is a generic term that encapsulates a broad range of firms
operating across sectors in a post-industrial economy.
>> Knowledge-intensive firms can be classified as client-based, problem-solving or output-
based.
>> Knowledge workers are often referred to as ‘gold collar’ workers, acknowledging the
autonomy and exceptional working conditions they are generally afforded.

>> The adhocracy, characterized by a dynamic organizational structure based on self-formed
and self-managed teams, is considered to be an appropriate configuration where innova-
tion is the basis on which a firm competes.
>> Structural constraints on knowledge work include the development of organizational ‘best
practice’ templates, monitoring of knowledge workers’ time and organizational growth.

>> Responsible autonomy is more likely to be achieved if management acknowledges that
organizational culture is likely to be characterized by differentiation and fragmentation
rather than consensus and integration. Hence management should only attempt to loosely
manage culture, aiming to promote an organizational ethos that knowledge workers find
accessible and can readily identify with, rather than a dominant core value system.

6/5/09 6:58:03 AM
9780230_522015_03_cha02.indd 53 6/5/09 6:58:03 AM
9780230_522015_03_cha02.indd 53