Abstract

The theme of this article is value capture in the context of executive search. We build on literature in economic sociology and organisational theory that demonstrates that relationships contribute to creation of economic value and addresses how thus-created economic value is distributed amongst participants in transactions. In our context transactions consist of search firm commencing a concluding searches for appropriate candidates for executive vacancies at hiring firms. This research examines what kinds of pre-existing relationships with candidates enable search firms to complete searches quicker and thus capture more value. It derives hypotheses from literature on learning and socialisation in relationships, and tests them with a sample of 924 searches conducted by a global executive search firm between January 2005 and May 2009. We found evidence of learning in relationships that supports value capture (with delayed effect). Specifically, value captured due to relationship-based learning can be almost half greater than when there is absence of such learning. Our findings extend the literature on value creation and value capture through relationships and demonstrate that value may be captured in situations that are not strictly competitive. We discuss the limitations of our study and indicate how the combination of findings and limitations opens avenues for future research.

 

This work is licensed under a Creative Commons Attribution 4.0 License.