Exploring the performance effect of HPWS on professional service supply chain management

Purpose – The aim of this study is to better understand service supply chain management by analysing the professional service supply chain in professional service firms (PSFs) and exploring how the high performance work systems (HPWS) influence professional service supply chain performance. In addition, this study seeks to examine the relationship between professional service supply chain performance and the overall organizational performance. Design/methodology/approach – Analysis of PSF suggests a three‐step of professional service supply chain as the clients' requests, partners forming working teams or so‐called team formation and utilization, and delivering of solutions or services to clients. Based on extensive literature review, the authors hypothesize that HPWS have a positive impact on the professional service supply chain performance and the team formation and utilization mediates the link. They also hypothesize the positive link between the professional service supply chain performance and the overall organisational firm performance. Employing survey method, data was collected from 93 accounting firms at two time points. In May 2010 (Time 1), a survey including questions on HPWS, team formation and utilization and professional service supply chain performance were sent out to the managing partners and HR directors in accounting firms based in Ireland. Around one year later (Time 2), another survey measuring firm performance was sent out. This data allowed the authors to establish causal pattern in their results. Hierarchical regression analysis was used to analyse data to test hypotheses. Findings – The results indicate the positive link between HPWS and the professional service supply chain performance. The team formation and utilization mediates the above relationship. In addition, professional service supply chain performance was found to be positively linked to the firm performance. Research limitations/implications – The present study is limited in terms of sample size, single industry and self‐report data. Future research also needs to examine more mediators or moderators – the mechanisms through which HPWS work on the professional service supply chain. Practical implications – Firms using higher level of HPWS experience better professional service supply chain performance. Human resource management practices that promote employees' ability, motivation and opportunities which allow teams to be formed more effectively to work with clients enhance organizational performance and higher profit levels. Managers able to effectively adopt and implement these teamwork‐based HR practices and encourage and support employees' collaboration through such practices enhance the firm's professional service supply chain effectiveness and its organisational performance. Social implications – The authors' study focuses on the service supply chain management operations within the professional service firms. In doing so, their research answers the call by Ellram et al. for more supply chain management research with respect to the service sector. It addresses a significant research gap identified by Rahman and Wu, namely, “relatively little attention has been given to the service suppliers' perspective”. By linking service supply chain management and human resource management, this study also answers a few calls for more research on the interaction of human resource management and supply chain management, service supply chain and human resource management in professional service firms. Originality/value – This is one of the few studies to analyse the professional service supply chain management and assess the human resource management and supply chain management link. Moreover, it is the first study which empirically establishes the link between human resource management and professional service supply chain performance in PSFs.