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Learning and Knowledge Depreciation in Professional Services


  • Tonya Boone

    () (Mason School of Business, The College of William and Mary, Williamsburg, Virginia 23187)

  • Ram Ganeshan

    () (Mason School of Business, The College of William and Mary, Williamsburg, Virginia 23187)

  • Robert L. Hicks

    () (Department of Economics and Thomas Jefferson School of Public Policy, The College of William and Mary, Williamsburg, Virginia 23187)


Organizational knowledge is a critical source of competitive advantage for professional service firms. Learning from experience and sustaining past knowledge are critical to the success of such knowledge-driven firms. We use learning curve theory to evaluate learning and depreciation in professional services. Our results, based on seven years of project data collected from an architectural engineering (A/E) firm, show that (a) professional services exhibit learning curves, (b) there is virtually no depreciation of knowledge and, (c) the rate of learning accelerates with experience.

Suggested Citation

  • Tonya Boone & Ram Ganeshan & Robert L. Hicks, 2008. "Learning and Knowledge Depreciation in Professional Services," Management Science, INFORMS, vol. 54(7), pages 1231-1236, July.
  • Handle: RePEc:inm:ormnsc:v:54:y:2008:i:7:p:1231-1236

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    References listed on IDEAS

    1. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    2. Eric D. Darr & Linda Argote & Dennis Epple, 1995. "The Acquisition, Transfer, and Depreciation of Knowledge in Service Organizations: Productivity in Franchises," Management Science, INFORMS, vol. 41(11), pages 1750-1762, November.
    3. Elie Ofek & Miklos Sarvary, 2001. "Leveraging the Customer Base: Creating Competitive Advantage Through Knowledge Management," Management Science, INFORMS, vol. 47(11), pages 1441-1456, November.
    4. C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September.
    5. Linda Argote & Sara L. Beckman & Dennis Epple, 1990. "The Persistence and Transfer of Learning in Industrial Settings," Management Science, INFORMS, vol. 36(2), pages 140-154, February.
    6. Paul Ingram & Tal Simons, 2002. "The Transfer of Experience in Groups of Organizations: Implications for Performance and Competition," Management Science, INFORMS, vol. 48(12), pages 1517-1533, December.
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    Cited by:

    1. repec:kap:sbusec:v:49:y:2017:i:1:d:10.1007_s11187-016-9811-0 is not listed on IDEAS
    2. Scott F. Rockart & Nilanjana Dutt, 2015. "The rate and potential of capability development trajectories," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 53-75, January.
    3. Kamalini Ramdas & Khaled Saleh & Steven Stern & Haiyan Liu, 2016. "Variety and Experience: Learning and Forgetting in the Use of Surgical Devices," Working Papers 0316, University of South Florida, Department of Economics.
    4. Mesak, Hani I. & Bari, Abdullahel & Babin, Barry J. & Birou, Laura M. & Jurkus, Anthony, 2011. "Optimum advertising policy over time for subscriber service innovations in the presence of service cost learning and customers' disadoption," European Journal of Operational Research, Elsevier, vol. 211(3), pages 642-649, June.
    5. Stefan Wagner & Karin Hoisl & Grid Thoma, 2014. "Overcoming localization of knowledge — the role of professional service firms," Strategic Management Journal, Wiley Blackwell, vol. 35(11), pages 1671-1688, November.
    6. Demirbag, Mehmet & McGuinness, Martina & Akin, Ahmet & Bayyurt, Nizamettin & Basti, Eyup, 2016. "The professional service firm (PSF) in a globalised economy: A study of the efficiency of securities firms in an emerging market," International Business Review, Elsevier, vol. 25(5), pages 1089-1102.
    7. repec:eee:iburev:v:26:y:2017:i:5:p:908-926 is not listed on IDEAS
    8. Jonathan R. Clark & Robert S. Huckman & Bradley R. Staats, 2013. "Learning from Customers: Individual and Organizational Effects in Outsourced Radiological Services," NBER Working Papers 18723, National Bureau of Economic Research, Inc.
    9. Robert S. Huckman & Bradley R. Staats, 2011. "Fluid Tasks and Fluid Teams: The Impact of Diversity in Experience and Team Familiarity on Team Performance," Manufacturing & Service Operations Management, INFORMS, vol. 13(3), pages 310-328, July.

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    learning; depreciation; professional services;


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