A professional services firm's competence development

The conceptualization of a firm's competence development has undergone some developments, as seen from the extant literature. However, studies or explanations of a firm's competence development over time seem to concentrate on firms that manufacture physical goods. The literature is devoid of studies on the competence development of professional services firms (PSFs). With two in-depth case studies, this paper seeks to shed light on factors that impinge on PSFs' competence development over time. An important finding of this study is that all the two PSFs' competence development over time has been influenced, in large measure, by their close and regular interaction with their respective immediate customers as well as with some significant third parties in their network of exchange relationships, where the actors mutually adapt to each other and also learn from each other. Evidences in all the two cases show that each of the firms has won and kept important customers that give them the most and frequent assignments per year, thanks to the factors that have affected their competence to meet customers' demand over time.