Common Threats and Managing Reputation in Executive Search Firms
| Author | William S. Harvey,Jonathan V. Beaverstock,Hongqin Li |
| Date | 01 October 2019 |
| Published date | 01 October 2019 |
| DOI | http://doi.org/10.1111/1467-8551.12312 |
British Journal of Management, Vol. 30, 847–868 (2019)
DOI: 10.1111/1467-8551.12312
Common Threats and Managing Reputation
in Executive Search Firms
William S. Harvey , Jonathan V. Beaverstock1and Hongqin Li2
University of Exeter Business School, Rennes Drive,Exeter EX4 4PU, UK, 1Department of Management,
University of Bristol, Priory Road, Bristol BS8 1TU, UK, and 2Faculty of Business, University of Portsmouth,
Portland Street, Portsmouth PO1 3DE, UK
Corresponding author email: william.harvey@exeter.ac.uk
This paper provides important insights into how executive search firms can successfully
manage their reputations to overcome major threats to their organizations. The paper
focuses on three threats faced by executive search firms: the global financial crisis; ques-
tions around the sector’s professional status; and the proliferation of social media for
recruitment. Our data show that there was not a single coherent response from firms,
but a piecemeal approach that focused on three forms of reputation management. First,
diversifying service oerings; second, highlighting their symbolic capital; and third, con-
necting their firms to clients and candidates through partners. Building on our data and
the theoretical literature,we provide a framework for understanding how professionalser-
vice firms can manage their reputations in response to common threats, based on three
categories from the English idiom ‘keep up with the Joneses’. First, moving away from
the Joneses; second, fencing out the Joneses; third, networking more than the Joneses.
We providetheoretical and practical insights around how organizations can manage their
reputations in response to threats which are common acrosssectors.
Introduction
In July 2017, the Financial Times (2017) reported
that HSBC plc instructed Russell Reynolds, one
of the top three leading global executive search
firms, to find a new Chief ExecutiveOcer (CEO).
Whilst this was an unprecedented strategy for
HSBC to fill a senior role from outside its lead-
ership pool, the bank was finally engaging with
the industry norm of using one of the most highly
reputable executive search firms to compete in the
global ‘war for talent’. Since the 1990s, FSTE500
and S&P500 corporations, to public sector, edu-
cation and not-for-profit organizations have hired
executive search firms to recruit leaders and func-
tional specialists, rather than promoting talent
from within (Faulconbridgeet al., 2009). The lead-
ing global executive search firms have worked tire-
lessly to position themselves as highly professional
A free video abstract to accompany this article can
be found online at: https://www.youtube.com/watch?v=
IziwDorbeGU
organizations to fulfil the recruitment demands of
clients worldwide. The success of executive search
as a profession has been founded on its aptitude
to enhance and successfully manage its reputation
as an elite labour marketintermediary, particularly
during times of economic change. The sector has
had to nurture its reputation as a new professional
project oering a suite of search, advisoryand con-
sultancy functions underpinned by self-regulated
professional standards outside of normal legal clo-
sure (Muzio et al., 2011).
Executive search firms live and die by their
reputation and ability to manage change
(Beaverstock, Faulconbridge and Hall, 2015;
Finlay and Coverdill, 2002; Hamori, 2010). While
we are witnessing an era of declining public trust
in firms (World Economic Forum, 2010), like
many agents in a market, executive search firms
rely on their professional reputation, buyer–
seller trust relations and market intelligence
to secure new business in a highly competitive
environment (Byrne, 1986; Finlay and Coverdill,
2002; Garrison-Jenn, 2005). There is an extensive
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for commercial purposes.
848 W. S. Harvey, J. V. Beaverstock and H. Li
literature on reputationthreats and crises (Elsbach
and Kramer, 1996; Gioia, Schultz and Corley,
2000; Ravasi and Schultz, 2006; Rhee and Valdez,
2009) as well as important literature on the
consequences of reputation damage (Fombrun,
2012; Gran et al., 2013; Rindova et al., 2005).
Research has also focused on how organizations
respond to reputation challenges through im-
pression management such as advertising and
rebranding (Carter and Dukerich, 1998), which
are considered ‘superficial’; more ‘substantial’
responses (Rhee and Kim, 2012) that might
involve centralizing control or selling assets are
rarer. At the same time and following calls from
Rhee and Kim (2012), there has been little explo-
ration into more substantial responses, which are
neither an organizational crisis nor a superficial
event, such that they cannot be simply ignored
(Harvey, Morris and M¨
uller Santos, 2017). This
is an important context to explore because many
organizations confront significant political, eco-
nomic and social shocks, which require careful
reputation management. We suggest that the
coupling of a common threat and a reputation
management response is a significant context
requiring further exploration. We also argue that
exploring this form of reputation management
has valuable implications for our understanding
of how organizations are perceived in relation to
their competitors over time.
This paper explores how leaders of executive
search firms manage reputation in response to
multiple common threats. Building on the concept
of the ‘tragedy of the commons’ and King, Lenox
and Barnett’s (2002) notion of organizations in a
sector sharing a ‘reputation commons’, we refer
to ‘common threats’ as those which are not exclu-
sively reputation threats nor particular to a single
individual or organization, but are either common
to a sector (e.g.a tarnished sector’s status) or multi-
ple sectors (e.g. the global financial crisis (GFC)).
This empirical context is not a standalone exam-
ple, as is demonstrated by the uncertainties for or-
ganizations around the UK’s future relationship
with the European Union.
The empirical context of this study is retained
executive search firms (hereafter referred to as ex-
ecutive search firms), which involve clients pay-
ing a non-refundable retainer fee to these firms
for high-end searches of executives, irrespective of
the success of the search (Garrison-Jenn, 2005).
We analyse how they have responded to common
threats in Sydney, Australia throughthe GFC. The
executive search firms have historically faced few
common threats because of the powerful networks
of their partners and consultants who matched
the demands of clients with the supply of candi-
dates in elite labour marketsin a confidential, pro-
fessional and discrete manner (Britten, Doherty
and Ball, 1997; Byrne, 1986; Garrison-Jenn, 2005;
Jones, 1989). The Australian economy has also
experienced several decades of growth because
of the resource-rich economy, which has meant
high demand for executive search firms owing
to high demand for talent in the labour market.
However, along with the GFC, other issues have
emerged such as the trustworthiness of the sec-
tor and alternative forms of recruitment through
technology.
Our focus is on executive search firms during
the GFC, which is an important empirical con-
text because clients find quality dicult to eval-
uate. Yet, in this sector as well as within profes-
sional service firms (PSFs) more broadly, it is not
well understood how these organizations manage
their reputation in response to common threats to
their sector and to other organizations within the
wider economy (Gl¨
uckler and Armbr ¨
uster, 2003;
Greenwood et al., 2005; Harvey and Mitchell,
2015; Sturdy, 2011). Based on in-depth face-to-
face interviews in 2009 and 2013 with managing
partners and partners of executive search firms
in Sydney, Australia, we explore these dierent
threats and howexecutive search firms have sought
to enhance and manage their reputations through
focusing on three specific forms of reputation:
functional, symbolic and individual. Our study
provides rich insights, which have important the-
oretical and practical implications more broadly
for PSFs seeking to manage their reputationsin re-
sponse to common threats.
Managing reputation
Reputation is the aggregated evaluations of dif-
ferent organizations compared to their competi-
tors, based on the perceptions of various stake-
holders. Reputation is considered particularly
important across multiple types of PSFs, because
service quality is hard to judge ex ante and ex
post (Pollock et al., 2015; Sturdy, 2011). Given
high levels of information asymmetry (Green-
wood et al., 2005), reputation representsan impor-
tant social signal for reducing client uncertainty
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