Strategies for Managing Suppliers of Professional Services

Endicott R. Craig Brown Kevin , “Top 100 Boosts Ad Spending 6.4% to Almost $34 Billion,” Advertising Age, September 26, 1990.

“The 1990 Corporate Sweepstakes,” Institutional Investor (February 1990).

“Special Report on Law Department Functions and Expenditures 1989,” Altman & Weil Publishers, Inc., Newtown Square, PA.

McMillan John , “Managing Suppliers: Incentive Systems in Japanese and U.S. Industry,” California Management Review, 32/4 (Summer 1990):38–55.

Deming W. Edwards , Out of the Crisis (Cambridge, MA: Massachusetts Institute of Technology, 1986).

For additional documentation of the shift away from relationships, see also: Crum Coyler M. Meerschwam David M. , “From Relationship to Price Banking: The Loss of Regulatory Control,” in McCraw Thomas K. , ed., America Versus Japan (Boston, MA: Harvard Business School Press, 1986), pp. 261–298; Nelson Robert L. , Partners with Power: Social Transformation of the Large Law Firm (Berkeley, CA: University of California Press, 1988).

For example, the following sources were used: For financial services, interviews with clients, bankers, and quantitative analysis of interfirm relations, some of which is reported in Baker Wayne E. , “Market Networks and Corporate Behavior,” American Journal of Sociology, 96 (1990): 589–625; for advertising, interviews with corporate clients and ad agencies, data from business and trade publications, such as Advertising Age, The Red Book, and the Wall Street Journal; for law, interviews with social science experts and use of secondary sources such as Nelson Robert L. , op. cit., the Wall Street Journal, and Business Week. The management framework has been applied successfully in consulting and executive seminars in banking and advertising.

Klee Kenneth , “The Most Hostile Banks in America,” Institutional Investor (December 1989).

“Are Investment Banks Double-Crossing Clients?” Business Week, August 8, 1988.

Pendleton Jennifer , “Matches Made in Heaven,” Advertising Age, March 14, 1988.

Beckwith Caroline , “The Organization-Market Interface of Corporations and Advertising Agencies,” Honors Thesis, University of Massachusetts, Amherst (1988).

See Baker Wayne E. , op. cit.; Baker Wayne E. , “The Organization-Market Interface: Corporations' Relations with Investment Banks,” Harvard Business School Working Paper No. 87-043 (April 1987).

Beckwith Caroline , op. cit.

Hume Scott , “Burger King Gangs Up on McD,” Advertising Age, May 22, 1989; Hume Scott Levin Gary , “Burger King Axes Ayer,” Advertising Age, April 29, 1989.

Levin Gary Lafayette Jon , “IBM Pulling the Plug,” Advertising Age, June 6, 1988; Levin Gary Lafayette Jon , “IBM Moves Quickly” Advertising Age, June 13, 1988; Levin Gary Radding Alan , “IBM Mulling Brand Setup” Advertising Age, August 8, 1988; Lafayette Jon Levin Gary , “IBM Starts Fresh” Advertising Age, September 5, 1988.

Horton Cleveland Levin Gary , “Hill Holliday Wins Big,” Advertising Age July 4, 1988.

In Eccles Robert G. Crane Dwight B. , Doing Deals (Boston, MA: Harvard Business School Press, 1988).

Baker Wayne E. (1987), op. cit.; Baker Wayne E. (1990), op. cit.

Many customers have resisted service supplier diversification. For example, Prudential-Bache's effort to become a financial supermarket has largely failed, despite the $1 billion its parent, Prudential Insurance, has put into it. WPP Group has recently dropped its aggressive strategy of cross-selling, and other ad agencies have cut their side ventures. See Lipman Joanne , “WPP's Sorrell Cuts Back on Plan to ‘Cross-Sell’ Various Services,” Wall Street Journal, January 7, 1990; Levin Gary , “Ad Agencies Ax Side Ventures,” Advertising Age, March 18, 1991.

Fisher Anne B. , “How to Cut Your Legal Costs,” Fortune, April 23, 1990.

Ibid.

Ghuiles Melinda Grenier Lambert Wade , “GM Set to Pare Use of Outside Law Firms,” Wall Street Journal, October 30, 1989.

Lafayette Jon , “Agency Media Staffs Gain Clout,” Advertising Age, March 4, 1991.

Selby Beth , “End-Running the Street,” Institutional Investor (September 1989).

Schut Jan H. , “The Lure of the Alternative Market,” Institutional Investor (May 1990).

Magiera Marcy , “Carnation Links Pay, Research,” Advertising Age, March 6, 1990.

Lublin Joann S. , “DDB Hasn't Sold Many Clients on Offbeat Compensation Plan,” Wall Street Journal, December 26, 1990.

Lafayette Jon Meyers Janet , “Mars Hires Achenbaum on Ad Costs,” Advertising Age, April 24, 1989.

Pollack Ellen Joan , “Auditors of Corporate Legal Bills Thrive,” Wall Street Journal, February 13, 1991.