Chartering New Territory: Diversification, Legitimacy, and Practice Area Creation in Professional Service Firms

Journal of Organizational Behavior, Vol. 29, p. 1101, 2008

21 Pages Posted: 23 Nov 2011 Last revised: 8 Apr 2013

See all articles by Heidi K. Gardner

Heidi K. Gardner

Harvard Law School

N. Anand

Imperial College London

Timothy Morris

University of Oxford - Said Business School; University of Oxford - Said Business School

Date Written: May 30, 2007

Abstract

Diversification into innovative domains through new practice area creation is a critical imperative for professional services firms. Using theories of organizational territoriality and corporate charters, we conceptualize professional firms as federations of distinct practice areas and argue that the chartering of a new practice is an inherently political act. New practice area founders need to engage in appropriate legitimacy-mobilizing efforts in order to sustain diversification efforts. Our analysis of 46 cases of new practice area creation efforts in consulting and law firms shows that the mix of legitimacy required for new practice areas created through radical diversification is very different from that required for incremental diversification efforts. Our findings have important implications for studying how innovation is structurally accomplished in professional firms.

Suggested Citation

Gardner, Heidi K. and Anand, N. and Morris, Timothy, Chartering New Territory: Diversification, Legitimacy, and Practice Area Creation in Professional Service Firms (May 30, 2007). Journal of Organizational Behavior, Vol. 29, p. 1101, 2008. Available at SSRN: https://ssrn.com/abstract=1963378

Heidi K. Gardner (Contact Author)

Harvard Law School ( email )

1563 Massachusetts Avenue
Cambridge, MA 02138
United States

N. Anand

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Timothy Morris

University of Oxford - Said Business School

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford - Said Business School

Park End Street
Oxford, OX1 1HP
Great Britain

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