Firm size and industry structure under human capital intensity: Insights from the evolution of the global advertising industry

Organization Science

Volumn 22, Issue 1, 2011, Pages 141-157

  von Nordenflycht, Andrew ^a  

^a SIMON FRASER UNIVERSITY   (Canada)

Author keywords

Advertising agencies; Financial intermediation; Human capital; Industry evolution; Industry structure; Professional services; Vertical differentiation

Indexed keywords

EID: 79851482163     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.1090.0518     Document Type: Article

References (72)

1. Advertising Age. 1963a. EWRR buy makes interpublic first agency to near half-billion mark. (October 14) 1.
2. Advertising Age. 1963b. FC&B planning to offer agency stock to public. (June 24) 1.
3. Advertising Age. 2002. Agency report. (April 22) 1-59.
4. Arzaghi, M., E. R. Berndt, J. C. Davis, A. J. Silk. 2008. Economic factors underlying the unbundling of advertising agency services. Working Paper 14345, NBER, Cambridge, MA.
5. Baker, G. P. 1992. Beatrice: A study in the creation and destruction of value. J. Finance 47(3) 1081-1120.
6. Banker, R. D., H. Chang, R. Cunningham. 2003. The public accounting industry production function. J. Accounting Econom. 35(2) 255-281.
7. Bojanek, R. 1980. Merger activity in the advertising industry. Unpublished master's thesis, MIT Sloan School of Management, Cambridge, MA.
8. Bower, J. L. 1997. WPP-Integrating icons. Case 9-397-504, Harvard Business School, Boston.
9. Business Week. 1964. How Madison Avenue views its own big sell. (May 2) 72-78.
10. Caves, R. E. 1996. Multinational Enterprise and Economic Analysis, 2nd ed. Cambridge University Press, New York.
11. Collis, D. 1995. Saatchi & Saatchi Company PLC: Corporate strategy. Teaching Note, Case 9-792-056, Harvard Business School, Boston.
12. Cook, C., N. Nohria. 1991. Hill, Holliday, Connors, Cosmopulos, Inc. advertising (A). Case 9-491-016, Harvard Business School, Boston.
13. Craswell, A. T., J. R. Francis, S. L. Taylor. 1995. Auditor brand name reputations and industry specialization. J. Accounting Econom. 20(3) 297-322.
14. Doogar, R., R. F. Easley. 1998. Concentration without differentiation: A new look at the determinants of audit market concentration. J. Accounting Econom. 25 235-253.
15. Dow. G. K. 2003. Governing the Firm: Worker's Control in Theory and Practice. Cambridge University Press, New York.
16. Dow, G. K., L. Putterman. 2000. Why capital suppliers (usually) hire workers: What we know and what we need to know. J. Econom. Behav. Organ. 43 319-336.
17. Elliott, S. 2002. Advertising's big four: It's their world now. New York Times (March 31) B1.
18. Fendley, A. 1996. Saatchi & Saatchi: The Inside Story. Arcade, New York.
19. Galanter, M., T. Palay. 1990. Tournament of Lawyers: The Transformation of the Big Law Firm. University of Chicago Press, Chicago.
20. Garicano, L., T. Hubbard. 2007. Managerial leverage is limited by the extent of the market: Hierarchies, specialization, and the utilization of lawyers' human capital. J. Law Econom. 50(1) 1-43.
21. Garicano, L., T. Hubbard. 2009. Specialization, firms, and markets: The division of labor within and between law firms. J. Law Econom. Organ. 25(2) 339-371.
22. Ghemawat, P., T. Khanna. 1998. The nature of diversified business groups: A research design and two case studies. J. Indust. Econom. 44(1) 35-60.
23. Greenwood, R., L. Empson. 2003. The professional partnership: Relic or exemplary form of governance? Organ. Stud. 24(6) 909-933.
24. Greenwood, R., C. R. Hinings, J. Brown. 1990. "P2-Form" Strategic management: Corporate practices in professional service firms. Acad. Management J. 33(4) 725-755.
25. Greenwood, R., R. Suddaby, M. McDougald. 2006. Introduction. R. Greenwood, R. Suddaby, eds. Research in the Sociology of Organizations: Professional Service Firms, Vol. 24. Elsevier JAI Press, Oxford, UK, 1-16.
26. Groesbeck, K. 1962. At last! Own a share of America's most glamorous business! Advertising Age (July 2) 53.
27. Han, S.-K. 1994. Mimetic isomorphism and its effect on the audit services market. Soc. Forces 73(2) 637-664.
28. Hansmann, H. 1996. The Ownership of Enterprise. Belknap Harvard, Cambridge, MA.
29. Hart, O. 1995. Firms, Contracts, and Financial Structure. Clarendon Press, Oxford, UK.
30. Hubbard, R. G., D. Palia. 1999. A re-examination of the conglomerate merger wave in the 1960s: An internal capital markets view. J. Finance 54(3) 1131-1152.
31. Ireland, J., C. S. Lennox. 2002. The large audit firm fee premium: A case of selectivity bias? J. Accounting, Auditing, Finance 17(1) 73-91.
32. Jensen, M., W. Meckling. 1979. Rights and production functions: An application to labor-managed firms and codetermination. J. Bus. 52(4) 469-506.
33. Khermouch, G. 2003. Interpublic group: Synergy-Or sinkhole? Business Week (April 23) 76-77.
34. King, C. I., A. J. Silk, N. Ketelhohn. 2003. Geographic concentration, knowledge spillovers, and growth in the evolution of the U.S. advertising agency industry. J. Econom. Management Strategy 12(3) 327-362.
35. Klepper, S. 1996. Entry, exit, growth and innovation over the product life cycle. Amer. Econom. Rev. 86(3) 562-583.
36. Krotman, M., J. Sinkin. 2000. The state of consolidation of accounting firms. CPA J., http://www.nysscpa.org/cpajournal/2000/0800/features/f83100a.htm.
37. Lerner, J. 1995. Venture capitalists and the oversight of private firms. J. Finance 50(1) 301-318.
38. Lorsch, J., T. Tierney. 2002. Aligning the Stars: How to Succeed When Professionals Drive Results. Harvard Business School Press, Boston.
39. Lowendahl, B. 2000. Strategic Management of Professional Service Firms. Copenhagen Business School Press, Copenhagen.
40. Mailath, G. J., A. Postlewaite. 1990. Workers versus firms: Bargaining over a firm's value. Rev. Econom. Stud. 57(3) 369-380.
41. Michell, P. 1988. Advertising Agency-Client Relations: A Strategic Perspective. Croom Helm, London.
42. Millman, N. 1988. Emperors of Adland. Warner Books, New York.
43. Nachum, L. 1999. The Origins of the International Competitiveness of Firms. Edward Elgar, Northampton, MA.
44. Nanda, A. 2002. Professional codes of ethics. Case 03-064, Harvard Business School, Boston.
45. Nanda, A. 2004. Managing client conflict. Working Paper 9-904-059, Harvard Business School, Boston.
46. Nelson, R., S. Winter. 1982. An Evolutionary Theory of Economic Change. Belknap Press, Cambridge, MA.
47. O'Connell, V. 2002. Madison Avenue lacks the urge to merge, despite Publicis deal. Wall Street J. (March 20) B4.
48. Powell, M. J., D. M. Brock, C. R. Hinings. 1999. The changing professional organization. D. M. Brock, M. J. Powell, C. R. Hinings, eds. Restructuring the Professional Organization: Accounting, Healthcare, and Law. Routledge, New York, 1-19.
49. Printer's Ink. 1962. Going public: What it means to agencies. 279(36, May 25) 37-39.
50. Printer's Ink. 1964. Wall Streeter looks at agency stocks. (October 9) 8-9.
51. Rajan, R., L. Zingales. 1998. Power in a theory of the firm. Quart. J. Econom. 113(2) 387-432.
52. Rajan, R., L. Zingales. 2000. Governance of the new enterprise. X. Vives, ed. Corporate Governance: Theoretical and Empirical Perspectives. Cambridge University Press, Cambridge, UK, 201-225.
53. Ritter, J. 1998. Initial public offerings? Contemporary Finance Digest 2(1) 5-30.
54. Ritter, J., I. Welch. 2002. A review of IPO activity, pricing and allocations. J. Finance 57(4) 1795-1828.
55. Rose, T., C. R. Hinings. 1999. Global client's demands driving change in global business advisory firms. D. M. Brock, M. J. Powell, C. R. Hinings, eds. Restructuring the Professional Organization. Routledge, New York, 41-67.
56. Rothenberg, R. 1994. Where the Suckers Moon. Vintage Books, New York.
57. Sanders, L. 2002. Stuck in the middle. Advertising Age 73(10) (March 11) 43.
58. Schmalensee, R., A. J. Silk, R. Bojanek. 1983. The impact of scale and media mix on advertising agency costs. J. Bus. 56(4) 453-475.
59. Shaked, A., J. Sutton. 1982. Relaxing price competition through product differentiation. Rev. Econom. Stud. 49 3-13.
60. Silk, A., E. Berndt. 1993. Scale and scope effects on advertising agency costs. Marketing Sci. 12(1) 53-72.
61. Silk, A., E. Berndt. 1995. Costs, institutional mobility barriers, and market structure: Advertising agencies as multiproduct firms. J. Econom. Management Strategy 3(3) 437-480.
62. Silk, A., E. Berndt. 2004. Holding company cost economies in the global advertising and marketing services business. Rev. Marketing Sci. 2(1) Article 5.
63. Silk, A., C. I. King. 2008. Concentration levels in the US advertising and marketing services industry: Myth vs. reality. Working Paper 09-044, Harvard Business School, Boston.
64. Spar, D. L. 1997. Lawyers abroad: The internationalization of legal practice. Calif. Management Rev. 39(3) 8-28.
65. Starbuck, W. 1992. Learning by knowledge-intensive firms. J. Management Stud. 29(6) 713-740.
66. Sullivan, M. W. 2002. The effect of the Big Eight accounting firm mergers on the market for audit services. J. Law Econom. 45(2) 375-399.
67. Sutton, J. 1991. Sunk Costs and Market Structure: Price Competition, Advertising and the Evolution of Concentration. MIT Press, Cambridge, MA.
68. Sutton, J. 1998. Technology and Market Structure: Theory and History. MIT Press, Cambridge, MA.
69. von Nordenflycht, A. 2009. Lawyers, incorporated? Financial Post (January 20). Accessed March 11, 2010, http://www.financialpost.com/story.html?id=1196263.
70. Vranica, S. 2003. MDC is on the hunt for ad agencies. Wall Street J. (December 3) B6.
71. West, D. 1988. Multinational competition in the British advertising agency business, 1936-1987. Bus. Hist. Rev. 62(3) 467-501.
72. Young, E. 2008. Heller Ehrman hit by defections, failed Mayer Brown merger. San Francisco Bus. Times (September 17). Accessed March 11, 2010, http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2008/09/15/daily50.html.