Academic journal article IUP Journal of Marketing Management

Industrial Buying Behavior Related to Human Resource Consulting Services

Academic journal article IUP Journal of Marketing Management

Industrial Buying Behavior Related to Human Resource Consulting Services

Article excerpt

The purpose of this paper is to extend the understanding of the industrial buying process in connection with purchasing professional business (B2B) services, specifically Human Resource (HR) consulting services. Early B2B buying behavior literature strongly emphasized the rational aspects of buying behavior in B2B services. Based on a comprehensive exploratory study of Danish companies' purchases of HR consulting services, the paper provides insights into the factors that determine how Danish companies choose a consulting services supplier. Five hypotheses are developed based on literature review. The results show that buying behavior is much less rational than has been presumed. For example, it is revealed that a consultant's personal relationship to customers can often compensate for the consultant's lack of knowledge. This suggests that consultants' developing long-term personal relationships with customers is one of the most important key success factors in the consulting industry. Another important result that emerged from the study is customers' specific desire to actively participate in the production of consulting services.

Introduction

Service offerings can be divided into 'hard' and 'soft' services (Erramilli and Rao, 1993). Hard services include transportation, construction, hotels and logistic services, where a substantial 'physical product' element is involved. This study focuses on information-intensive soft services, whose production is dependent on simultaneous customer participation and interaction.

The four most distinctive features of professional business services are knowledgeintensity, low capital intensity, professional workforce and customized service offerings. In addition, professional service firms have the following distinguishing features of services: Intangibility, heterogeneity (non-standardized) and inseparability of production and consumption (Von Nordenflycht, 2010; and Scott and Batenburg, 2012).

Generally, companies in the business services industry are of significant importance for value creation at both the societal and business levels. In some countries, up to one-third of the private sector's growth stems from knowledge services. At the same time, knowledge services exports from most countries have increased significantly (Barnes, 2010; and Apfelthaler and Vaiman, 2012).

The global competition demands a faster innovation tempo, faster technology shifts, adapting leadership styles, and an understanding of the fundamental differences in culture. A company's employees are the source when utilizing future technological opportunities and managing intensified global competition. Ensuring a company's competitive advantage demands an awareness of the company strategy and bottom-line goals when considering investing in employees-human capital management. A company's future success is highly dependent on the employees' ability to create and manage new knowledge. Additionally, a company must be organized in a way that promotes creativity and explores the breadth of knowledge and competencies within the organization-employee and competence development. Employees' training and ongoing education will increasingly be regarded as a means to improve work qualifications.

Human Capital Management

Employee development can not only take place within the organization, but can also involve external partners, where companies utilize consultants' knowledge services. Knowledge specialization indicates that it is becoming increasingly difficult for the companies to mobilize necessary knowledge on their own. Therefore, consultants as external partners are essential for a company's survival and success.

Some companies choose to utilize consulting services only for specialized problem solving, where the company lacks necessary knowledge. In other cases, consultants are called in when the company considers developing a new business area. Working with a consultant helps to discover any endeavor that a company would like to pursue in the future by allowing the company to test a concept during a given period of time before committing resources. …

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