When Resources Leads to High Performance: Exploring the Role of Clients

Summary The aim of this study is to explore the conditions through which the resources are linked to performance outcomes. In particular, we look at the moderating role of interactions with clients in the relationship between... [ view full abstract ]

Summary
The aim of this study is to explore the conditions through which the resources are linked to performance outcomes. In particular, we look at the moderating role of interactions with clients in the relationship between team bonding social capital and team performance. Using data collected from 60 consulting project teams via different sources, we found that team bonding social capital was linked to team performance under higher level of clients interaction but not under lower level of clients interaction. Implications for theory and practice are discussed.

Theory Base and Hypotheses
Teams are becoming commonly adopted format at work. Professional service firms (PSFs) such as consulting, law firms, depend on their project teams to deliver effective client solutions. In these teams, relationships among team members are key resource for promoting knowledge sharing, transfer, combination and new knowledge generation which leads to higher team performance.

The resource-based view of the firm argues that organisation with valuable, rare, in-imitable and non-substitutable resources will gain competitive advantage and achieve high performance (Barney, 1991; Wernerfelt, 1984). It can also be applied to teams or units where team success depends on what resources the teams have. Employing relational perspective, we propose that team bonding social capital is a key resource for team success in PSFs. Team bonding social capital describes the high-quality of relationship and bonding among team members (Carmeli, Ben-Hador, Waldman & Rupp, 2009). Teams in PSFs require team members to work together to solve the problems in their clients’ organisations. Research has found that professional staffs have ‘fear’ of sharing knowledge with team members due to potential loss of status (Empson, 2001). High level of trust and good working relationships among team members are key for knowledge sharing and transfer (Fu, 2015). Therefore, we anticipate a positive link between team bonding social capital and team performance.

Recently, researchers argue the link between resources and outcomes are not direct. One theme of research indicates that resources themselves are not sufficient but only when such resources are effectively used and managed, that organisations can create value (Fu et al., 2015; Messersmith & Guthrie, 2010; Sirmon, Hitt, & Ireland, 2007). The other team of research emphasises that organisations need to watch out external environments or applying not only the internal but external resources (Priem & Butler, 2001). Following the latter perspective, this study aims to explore the condition when resources lead to performance outcomes by examining the role of clients. In particular, this study looks at the moderating role of interactions with clients in the link between team resource, i.e. bonding social capital, and team performance.

PSFs provide customised solutions for their clients. Usually, each partner looks after a group of clients. When the partner receives the client’s requests, he or she will select a senior professional who organises a team of professionals of differing experience to undertake the client project and who allocates tasks (Gardner et al., 2012). The assigned team leader and his/her team work closely with the clients to analyse the problem, propose potential solutions and implement them. During this process, the project team interact with clients. Clients interaction can help the teams to identify more useful solutions based on the clients’ contexts (Foss, Keld & Torben, 2011).

When team bonding social capital is high where team members have high-quality relationships and more bonding with each other, more interactions with clients will lead to better solutions/service and team performance. Therefore we argue that client interactions play an important role in strengthening the relationship between team bonding social capital and team performance. We propose the following two hypotheses:

Hypothesis 1. Team resources will be positively linked to team performance.
Hypothesis 2. Interactions with customers will moderate the link between team resources and team performance such that the link is stronger when interactions with customers are higher.



Method
The data used in this study was based on a large research project with a global consulting firm, PremierConsult (pseudonym). PremierConsult employ 2,500 people within their offices in North America, Europe, the Nordics, the Gulf and Asia Pacific. PremierConsult provides consulting service for a wide range of industries including energy, financial services, life sciences and healthcare, manufacturing, government and public services, defence and security, telecommunications, transport and logistics. Similar to other global consulting firms or other professional firms, PremierConsult primarily use teams to deliver services/solutions to their clients.

Data was collected from 60 project teams via multiple resources. Team bonding social capital was collected from team members. Interactions with clients and team performance were provided by team leaders.

In this study, all measures were adopted from existing valid scales. Team bonding social capital was adopted from Carmeli et al. (2009). Respondents were asked to indicate to what extent they agreed with four statements in relation to their experience in their relationships with other team members. Example items were: “I could count on others in my team at work” and “I felt a sense of caring for each other at work”. Interactions with clients were measured using Foss et al.’s (2011) scale. Example item was: “We emphasize close collaboration and dialogue with our clients”. Team performance was adopted from Marrone et al., (2007). Example item was “This team meets specified project deadlines in a timely manner”. Reliability was assessed via Cronbach’s alpha (α = .78 for team bonding social capital; α = .76 for interactions with clients; α = .78 for team performance). Team bonding capital was a team-level construct. Inter-rater agreement and reliability was assessed via ICCs and Rwg for aggregation. ICC(1) = .14, ICC(2) = .32, Rwg = .89 (mean) which supports aggregation.


Findings
There was no significant and direct link between team bonding social capital and team performance. Hypothesis 1 was not supported. The coefficient for the interaction term between team bonding social capital and interactions with clients on team performance was significant. Hypothesis 2 was supported. We drew the interaction plot between team bonding social capital and interactions with clients on team performance. It shows that team bonding social capital is positively linked to team performance under high level of interactions with customers.



Importance and Key Contribution
Testing the moderating effect of clients interaction on the link between team resources, i.e. team bonding social capital, and team performance in the professional service context, this study contributes to existing literature in following ways.

Firstly, this study explored the conditions under which resources can lead to performance. The resource-based view indicates when resources exist, performance will be enhanced (Barney, 1991; Wernerfelt, 1984). This has been criticised due to the limited focus on internal resources and external input has been overlooked (Priem & Butler, 2001). By identifying the moderator of clients interactions, this study advances our understanding of the resource-performance link.

Our findings suggest that team bonding social capital is only positively linked to team performance when interactions with clients are higher. This finding suggests that resources themselves are not sufficient to achieve high performance. External input is playing an important role in enabling the performance impact of resources. This is important both theoretically and practically. The literature on resource-based view, has long established links between resources and performance outcomes. Exploring the conditions when resources work and when not can help researchers to better understand the intervening mechanisms in those links. For organisation management, it is very important to know how organisation and team management might help strengthen the link between resource and performance. Otherwise, organisations only focus on internal team relationship building and overlook the important role of client interactions, these team resources won’t help to improve team’s effectiveness.

As professional service firms depend on teams, this study has identified clients interaction as a key factor in enabling the impact of team bonding social capital on team performance. Our findings suggest that the high-quality relationships and bonding among team members at the team-level are most useful when the teams involve clients in their team work. After all, the teams are formed and exist with the aim of delivering solutions to their clients. The clients’ knowledge is critical making the teams’ proposed solutions more suitable and more innovative.

References are available on request.

Resource-based view, Teams, Clients, Professional service firms, Team bonding capital [ view full abstract ]

Resource-based view, Teams, Clients, Professional service firms, Team bonding capital