Academic journal article European Research Studies

Networking Quality and Trust in Professional Services

Academic journal article European Research Studies

Networking Quality and Trust in Professional Services

Article excerpt

1. Introduction

Changes in business strategies as a result of globalization has led to a higher level of competition which drives companies to master wider market and opportunities. Even though globalization promotes more widely competition between a company and the competitors coming from all over the world, hypercompetition is actually a result of the dynamics of strategy maneuver among companies in the market, characterized by fast growing competition based on price-quality positioning, know-how creation and development of the first-mover advantage. Hence, companies become more difficult to maintain and control their market due to the very strong competition and unpredictable markets resulted from hypercompetition, a condition in which the assumption of market stability is replaced by instability and constant changes (Sirmon et. al., 2011; Vovchenko et al., 2017; Thalassinos et al., 2011; Liapis et al., 2013; Firescu and Popescu, 2015; Sultanova and Chechina, 2016; Thalassinos et al., 2011).

The condition requires companies to be more actively involved in an ongoing basis in creating a competitive advantage. In the context of service firms, the development of networking likely encourages a firm's ability to get its customer trust and improves the profitability (Luo, Hsu, and Liu, 2008; Gorina, 2016). Basically, the more the competitors, the more the options the customers choose among the products suitable with their expectation. Hence, service-based firms should emphasize on the competitive advantage strategies and have the sufficient ability to offer a specific service according to the customer's expectation.

Of many previous studies revealing the networking capability as one of the main core competencies of the company (Ritter, Wilkinson and Johnston, 2004; Walter, Auer and Ritter, 2006), only a few have focused on the conceptualization and examination of the relationship between networking capability and relational capability (Jarratt, 2004), alliance ability (Kale, Dyer and Singh, 2002; Draulans, aand Volberda, 2003), and the capability identification needed to manage strategic networking (Moller, Rajala and Svahn, 2005'; Pociovalisteanu and Thalassinos, 2008).

Garbarino and Johnson (1999) state that relational capability are less effective to influence the organizational performance. In addition, the higher trust of customers may not be actually able to drive the organizational performance. Hence, a company needs such a strong networking between organization and the customer that it ultimately advances its performance. In examining the relationship between networking and performance in the field of service marketing, Bowen and Shoemaker (1998) and Hoffman and Ingram (1992) show that customer trust is an important determinant which drives customers to maintain their relationship with the service providers. Sirmon et al. (2011) state that the service competitiveness is likely achieved if the company successfully formulates and implements the value creating strategy. Furthermore, Terziovski (2003) reveal that business networking is of significant relationship with business performance.

This study attempts to reveal the effect of relational capability, value creation, marketing knowledge, and marketing performance by exploring mainly the mediating role of networking capability to fulfill the above-mentioned theoritical gap. The law firms was selected as the research object because this business is typically organized by a network of partners entrusting completely their legal case. Moreover, the law firm business represents clients, networking development, business assistance, and other supports related to the creation of business advantage.

The study of networking capability of such a firm employing the professional jobs, such as lawyers, accountants, financial experts, and doctors is highly attracted to examine, due to the characteristics of personal job affected by socioeconomic background, gender, attitudes and extroversion significantly influenced the involvement in networking behaviors (Forret and Dougherty, 2001). …

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