ABSTRACT
Introduction This chapter discusses the globalization of professional business service firms (PBSFs) contrasted with the globalization of more traditional manufacturing firms. The chapter builds primarily on the theoretical contributions of Michael Porter, particularly Porter (1986), where he discusses globalization in terms of market characteristics as well as in terms of the characteristics of the value creating activities taking place within the firm. I argue that due to the particular characteristics of professional services, most of the traditional arguments for globalization do not automatically apply, neither in terms of market characteristics nor in terms of internal value creating activities. In particular, many professional service firms do not compete on price and cost, and some do not even primarily maximize profits. Given these unique characteristics, it is absolutely crucial for professional service firms to analyse both costs and benefits carefully (economic as well as intangible) before a decision to go global is made. If not, internationalization or globalization may tum out not to be a formula for success; it may even reduce the probability of success in its most extreme sense, namely survival. Hence, professional service firm managers and owners should make sure a 'devil's advocate' has asked all the awkward questions and that they are capable of answering them well, before a global strategy is implemented. Even though globalization may be good for some companies, it may be disastrous for others!
