Networks and Australian
professional services in newly
emerging markets of Asia
Susan Freeman
Department of Management, Monash University, Caulfield East, Australia
David Cray
Sprott School of Business, Carleton University, Ottawa, Canada, and
Mark Sandwell
Department of Management, Monash University, Caulfield East, Australia
Abstract
Purpose – To understand better how professional services firms (PSFs) use networks to gain entry
into newly emerging markets (NEMs), to analyze how such firms are assisted in this process by prior
networks and to provide a framework of this process.
Design/methodology/approach – The methodology utilised in this study is qualitative and
exploratory. Ten interviews across three large firms (legal, finance and media consulting) were used
for the data gathering. Analysis incorporated open, axial and selective coding.
Findings – Prior networks provide impetus to the foreign entry aspirations of PSFs and are critical
to the process. The specific functions of network actors in the entry process are to influence the firm
and to provide intelligence-gathering, arising from their participatory role in the foreign market.
A framework is presented, supporting network theory as a key theoretical underpinning of strategy
formulation, decision-making and implementation by PSFs entering NEMs.
Research limitations/implications – The framework presented in this paper could be tested most
appropriately by analysing an extended number of cases, still within a qualitative approach, prior to
survey-testing the extent of the phenomena. Within the scope of the current study, however, the
framework is supported by these preliminary findings.
Practical implications – Networks are perceived by PSFs as a medium for capturing market
knowledge and as a basis for strategic decision-making in NEMs.
Originality/value – Network theory is posited as a key theoretical underpinning of core strategy
formulation, decision-making and implementation by professional services entering NEMs.
Keywords Professional services, Networking, Decision making, Market entry, Emerging markets,
Australia
Paper type Research paper
Introduction
Many internationally oriented service firms have grown rapidly, using merger,
acquisition and franchising, yet little is known about how knowledge is generated
and transferred during the establishment of foreign market entry (FME) (Altinay,
2004). Lindsay et al. (2003) make explicit the critical role of relationships and the
individual in the process of knowledge flows within international service firms.
Altinay (2004) argues that research tends to ignore the role of people in creating
and managing a worldwide network of relationships in international services.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0956-4233.htm
IJSIM
18,2
152
Received 9 June 2005
Revised 30 September 2005
Accepted 21 May 2006
International Journal of Service
Industry Management
Vol. 18 No. 2, 2007
pp. 152-166
q Emerald Group Publishing Limited
0956-4233
DOI 10.1108/09564230710737808