Leveraging or Overcoming Distance? Global Strategy and Structure of Professional Services Firms

In this study, geographic distance is an instructional logic that influences the international strategy and structure of professional service firms (PSFs). By drawing on three governance modes—global value chains, virtual teams, and ecosystems—we identify eight governance structures in use by PSFs, resulting from reliance on one of two distance logics: distance-as-enabler and distance-as-barrier. When the logic of distance-as-enabler is prioritized, PSFs choose a structure that is more unified at the global level. When the logic of distance-as-barrier is upheld, PSFs give greater autonomy to local units or establish loosely connected regionally autonomous partnerships. By highlighting the co-evolution between professional governance and professional practice we further show that greater distance necessitates professional work to be more codified and modularized, while proximity preserves professional work's bespoke nature. We apply this framework to demonstrate how external environmental factors trigger firms to shift from one specific governance-practice form to another.