Management consulting

and reports or recommend an improvement – and this is increasingly required by many clients – act as consultants whether they call themselves consultants or not. Forensic audits (examining the health of an organization’s financial management, looking for potential past or future flaws and risks, and identifying responsibilities) are very close to management surveys and audits (Chapters 7 and 12). Auditing often prepares the ground for important consulting projects and can help to promote consulting; this was well perceived by accounting firms when they decided to enter management consulting. Conversely, providing audits, IT and consulting services to the same clients can lead to problems of lack of independence and conflict of interests (see also section 6.2).

Engineering consultants (consulting engineers) constitute a vast and diversified sector providing technical expertise in areas such as civil engineering, the construction industry, architecture, land and quantity surveying, town and country planning, project planning and supervision, mechanical engineering, chemical engineering, patent services, computer science and systems, and so on.

The link between management consulting and consulting in engineering has traditionally been close and the boundaries are in many cases blurred. On the one hand, some engineering consultants also deal with organization and management questions, particularly in areas such as industrial or production engineering and control, quality management, maintenance, feasibility studies, patents and licences, plant design, and project design, implementation and supervision. On the other hand, production management consultants with an engineering background can deal with various production and productivity improvement problems that are of both a managerial and a technological nature. In many contexts the best results will be achieved if management and engineering experts work together on interdisciplinary projects.

Several remarks on the relationships between management consulting and information technology consulting have already been made. Indeed, it is at this interface that the most spectacular and most rapid changes have occurred in recent years – and are likely to continue in the future. Computer software houses and hardware manufacturers first entered management consulting in the area of systems design, development and application, and then widened their interest to embrace general management and strategy consulting, and other areas. Management consultants’ strategies have been very similar: they have been adding more and more IT services to their portfolio. On both sides firms have come up with an expanding range of integrated management/systems/IT services, as well as highly specialized services. This has been achieved through numerous mergers and acquisitions, and also through authentic development of new service lines and new competencies.

2.8Management consulting, training and research

There is a very special relationship between management consulting on the one hand, and management training, development and research on the other. It could

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The consulting industry

even be argued that conceptually they constitute subsectors of the same profession, since they have the same object of study and practical intervention and they tend to pursue the same ultimate purposes. The differences are in the methodology and the immediate purposes.

There are professions where the relationships between practical intervention, education, training and research have been clarified and structured long ago. In medicine, no one would think of the practitioners, the medical schools and the researchers as being from different professions. Management has not yet arrived at that point. It has not been possible to overcome fully the traditional dichotomy between the practically oriented consultant, committed to producing tangible results for the client, and the professor–researcher, writing and teaching about concepts and theories, but less concerned with practical applications.

Consulting and training

There have, however, been signs of real progress in bridging the gap between consulting, and training and development, in the field of management:

–Knowledge transfer and learning are among the main purposes of modern consulting. In choosing working methods and collaborating with the client, the consultant aims to pass on personal know-how and experience. At the same time the consultant learns from the client.

–Consultants often view training (both informal and formal) as their key intervention tool and use it extensively.

–Some consulting firms have established management development and training centres as a special client service, which can be used in conjunction with consulting assignments, or separately.

–Many consultants are part-time teachers or trainers in business schools and other educational and training establishments.

–Conversely, more and more teachers and trainers of management also practise consulting (the “consulting professors” mentioned in section 2.5), drawing from their consulting experience to make training more relevant and practical and encouraging their students to learn consulting approaches and methods.

–In some educational and training establishments, consulting has become an institutional function, organized through special departments and/or projects.

–There are also hybrid firms and institutions, providing combined consulting/ training services and stressing the benefits that the client can obtain from their approach.

Consulting and research

Similar comments can be made on the close relationships between management consulting and management research as on consulting and training. Some of the

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Management consulting

Box 2.1 Factors differentiating research and consulting

earlier consultants liked to stress that they were down-to-earth practitioners who had nothing in common with academics and researchers. They saw direct hands-on experience, not research, as the only source of practically usable know-how. This dichotomy, however, reflected a poor theoretical preparation of the consultants and a lack of practical purpose on the side of most academics, rather than an incompatibility between the two approaches.

Despite their differences (see box 2.1), research and consulting have a lot in common and can be very useful to each other.

In dealing with practical management problems, consultants need to know the results of research and draw from them – for example, before recommending an incentive technique it is better to know whether any research has been done into the use of that technique in conditions similar to those experienced by the client. Consulting organizations increasingly encourage their members not only to keep informed about published results of management research, but also to keep in touch with ongoing research projects and leading researchers.

Research, then, can only benefit from close links with consulting. The data collected in client organizations by consultants can serve wider research purposes. Data from a number of organizations can be used for drawing general conclusions on sectoral or other trends, without infringing confidentiality. On becoming aware of this, many consulting firms have also gone into research.

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They have their own research programme, undertake contract research, and publish books based on their own research, or they cooperate on research projects with universities and individual researchers. Some consulting firms have gained the reputation of being strongly research based. Business schools and research institutes are increasingly interested in testing and diffusing the results of their research through consulting assignments.

Methodologically, consultants can learn a lot from researchers and vice versa. Action research is an example of research that is on the border with consulting: it aims simultaneously to solve a meaningful practical problem and to yield new knowledge about the social system under study. Action research involves changing what is being investigated; conventional research does not.

1For a fine account of the history of management consulting see H. J. Klein: Other people’s business: A primer on management consultants (New York, Mason-Charter, 1977); and P. Tisdall:

Agents of change: The development and practice of management consultancy (London, Heinemann, 1982).

2See W. B. Wolf: Management and consulting: An introduction to James O. McKinsey (Ithaca, New York, Cornell University, 1978).

3The “Big Eight” included the following international accounting firms: Arthur Andersen; Arthur Young; Coopers and Lybrand; Deloitte Haskins and Sells; Ernst & Whitney; Peat, Marwick, Mitchell; Price Waterhouse; and Touche Ross. In 1989, Ernst & Young was established by merging Ernst and Whitney with Arthur Young. Deloitte Haskins and Sells merged with Touche Ross. Peat, Marwick, Mitchell became KPMG following a 1986 merger with Klynveld Main Goerdeler. The group was thus reduced to the “Big Six”.

4Management Consultancy, Nov. 2000, p. 9.

5Ibid., p. 8.

6The Economist, 9 Dec. 2000, p. 92.

7See also E-business consulting: After the shakeout (research report by Kennedy Information, 2001), and M. Porter: “Strategy and the Internet” in Harvard Business Review, Mar. 2001, pp. 63–78.

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