Learning and Knowledge Depreciation in Professional Services

  • Authors:

  • Tonya Boone;Ram Ganeshan;Robert L. Hicks

  • Affiliations:

  • Mason School of Business, The College of William and Mary, Williamsburg, Virginia 23187;Mason School of Business, The College of William and Mary, Williamsburg, Virginia 23187;Department of Economics and Thomas Jefferson School of Public Policy, The College of William and Mary, Williamsburg, Virginia 23187

  • Venue:
  • Management Science
  • Year:
  • 2008

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Abstract

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.