The contingent workforce is an increasingly integral part of the world of work, affecting firms' abilities to accumulate knowledge, create value and establish competitive advantage. Since 1982, U.S. employment in this sector increased 250%, compared to a 20% growth in overall employment (Morrow, 1993). And professional and technical contingent work, with the greatest potential to affect core areas of the firm, is the most rapidly growing segment of contingent work. This study examines how contingent resource use varies in entrepreneurial firms relative to nonentrepreneurial firms. In particular, contingent resource use in technical capacities is examined because it has the ability to affect core capabilities and ultimately the competitive advantage of firms. While the growing use of contingent work reflects a popular belief that firms can reduce their cost structures and increase strategic flexibility by substituting these workers for fulltime employees, this research suggests that important strategic implications lie in the effect these contingent resources have on organizational knowledge. How entrepreneurial firms use contignet work may make them especially well positioned to take advantage of this resource as an expedient method of building valuable knowledge stocks.
Entrepreneurial firms, by virtue of their age, size, and
relatively short organizational history are subject to greater
uncertainty and efficiency pressures. Short time frames,
few administrative personnel,
and pressure to keep costs
down make contingent resource use
especially attractive for these firms. And because
entrepreneurial firms are less constrained by the burden of
historical practices, their use patterns of this relatively new
sector of the labor
force may be the harbinger of things to come as contingent resource use, especially in professional and technical areas, becomes increasingly prevalent. But despite the growth of contingent work, its effects on the organization are unexplored. The issues surrounding contingent resources are of particular importance in entrepreneurship for two reasons. First, entrepreneurial firms are especially attracted to this form of work arrangement, though its effects are unknown. Second, because of the magnified uncertainty and efficiency pressures in entrepreneurial firms, this setting is a particularly rich one in which to study the popular belief that contingent work reduces uncertainty and increases strategic flexibility. This study's purpose is to make a contribution to what is known about the effects of using contingent resources in professional and technical areas and more specifically whether the issues for entrepreneurial firms are distinct from those of nonentrepreneurial firms.
This paper is organized as follows. First, a brief
overview of the research to date on contingent resources is
discussed. Then, the methods used and findings on the
motives, use patterns and outcomes in entrepreneurial vs.
nonentrepreneurial firms are discussed. Implications
for entrepreneurial research and management practices follow.
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