Social Structure, Employee Mobility, and the Circulation of Client Ties

Joseph P. Broschak, Keri M. Niehans

Research output: Chapter in Book/Report/Conference proceedingChapter

5 Scopus citations

Abstract

We explore factors that influence the circulation of client-service firm relationships between firms in the same market for professional services. Circulation refers to the dissolution of a client-service firm market tie and the formation of a new tie involving the same client but a new professional service firm. Building on research in social embeddedness and the structure of markets, we argue that the circulation of client-service firm relationships is affected by three social signals: the mobility of exchange managers between professional service firms, the size and market strategy of professional service firms, and the similarity of new service firms to clients' previous exchange partners. Using data on advertising agency-client market ties, we find that client ties are more likely to circulate to large agencies, agencies with many market ties, and to agencies that are similar to a client's previous advertising agency. The circulation of client ties is also more likely when new agencies hire exchange managers from a client's previous agency. This effect is stronger when exchange managers circulate to agencies of equal or higher status as their previous employer. We discuss the implications of our findings for social embeddedness research and for the study of professional service firms.

Original languageEnglish (US)
Title of host publicationProfessional Service Firms
EditorsRoyston Greenwood, Roy Suddaby
Pages369-401
Number of pages33
DOIs
StatePublished - Apr 26 2006
Externally publishedYes

Publication series

NameResearch in the Sociology of Organizations
Volume24
ISSN (Print)0733-558X

ASJC Scopus subject areas

  • Sociology and Political Science
  • Organizational Behavior and Human Resource Management

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  • Cite this

    Broschak, J. P., & Niehans, K. M. (2006). Social Structure, Employee Mobility, and the Circulation of Client Ties. In R. Greenwood, & R. Suddaby (Eds.), Professional Service Firms (pp. 369-401). (Research in the Sociology of Organizations; Vol. 24). https://doi.org/10.1016/S0733-558X(06)24014-X