Management consulting refers to both the industry of, and the practice of, helping organizations improve their performance, primarily through the analysis of existing business problems and development of plans for improvement.
Organizations hire the services of management consultants for a number of reasons, including gaining external (and presumably objective) advice, access to the consultants’ specialized expertise, or simply as extra temporary help during a one-time project, where the hiring of more permanent employees is not required.
Because of their exposure to and relationships with numerous organizations, consultancies are also said to be aware of industry “best practices”, although the transferability of such practices from one organization to another is the subject of debate[citation needed].
Consultancies may also provide organizational change management assistance, development of coaching skills, technology implementation, strategy development, or operational improvement services. Management consultants generally bring their own, proprietary methodologies or frameworks to guide the identification of problems, and to serve as the basis for recommendations for more effective or efficient ways of performing business tasks.
Management consulting grew with the rise of management as a unique field of study. The first management consulting firm was Arthur D. Little, founded in 1886 by the MIT professor of the same name.[citation needed] Though Arthur D. Little later became a general management consultancy, it originally specialized in technical research. Booz & Company was founded by Edwin G. Booz, a graduate of the Kellogg School of Management at Northwestern University, in 1914 as a management consultancy and the first to serve both industry and government clients.
After World War II, a number of new management consulting firms formed, most notably Proudfoot Consulting, founded in 1946 by Alexander Proudfoot, which implemented sustainable operational improvements within its clients, and Boston Consulting Group, founded in 1963, which brought a rigorous analytical approach to the study of management and strategy. Work done at Booz & Company, McKinsey, BCG, and the Harvard Business School during the 1960s and 70s developed the tools and approaches that would define the new field of strategic management, setting the groundwork for many consulting firms to follow. In 1983, Harvard Business School’s influence on the industry continued with the founding of Monitor Group by six professors.
One of the reasons why management consulting grew first in the USA is because of deep cultural factors: it was accepted there, (contrary to say, Europe), that management and boards alike might not be competent in all circumstances; therefore, buying external competency was seen as a normal way to solve a business problem. This is referred to as a “contractual” relation to management. By contrast, in Europe, management is connected with emotional and cultural dimensions, where the manager is bound to be competent at all times. This is referred to as the “pater familias” pattern. Therefore seeking (and paying for) external advice was seen as inappropriate. However, it is sometimes argued that in those days the average level of education of the executives was significantly lower in the USA than in Europe, where managers were Grandes Ecoles graduates (France) or “Doktor” (Germany), though this is very difficult to quantify given the vastly differing management structures in American and European businesses.
It was only after World War II, in the wake of the development of the international trade led by the USA, that management consulting emerged in Europe. The current trend in the market is a clear segmentation of management consulting firms.[citation needed]
Another branch of management consulting is Human Resource consulting. Such firms provide advice to their clients regarding the financial and retirement security, health, productivity, and employment relationships of their global workforce.
In general, various approaches to consulting can be thought of as lying somewhere along a continuum, with an ‘expert’ or prescriptive approach at one end, and a facilitative approach at the other. In the expert approach, the consultant takes the role of expert, and provides expert advice or assistance to the client, with, compared to the facilitative approach, less input from, and fewer collaborations with, the client(s). With a facilitative approach, the consultant focuses less on specific or technical expert knowledge, and more on the process of consultation itself. Because of this focus on process, a facilitative approach is also often referred to as ‘process consulting,’ with Edgar Schein being considered the most well-known practitioner. The consulting firms listed above are closer toward the expert approach of this continuum.
Many consulting firms are organized in a matrix structure, where one ‘axis’ describes a business function or type of consulting: for example, strategy, operations, technology, executive leadership, process improvement, talent management, sales, etc. The second axis is an industry focus: for example, oil and gas, retail, automotive. Together, these form a matrix, with consultants occupying one or more ‘cells’ in the matrix. For example, one consultant may specialize in operations for the retail industry, and another may focus on process improvement in the downstream oil and gas industry.
Management consulting refers generally to the provision of business consulting services, but there are numerous specializations, such as information technology consulting, human resource consulting, and others, many of which overlap, and most of which are offered by the large diversified consultancies listed below. So-called “boutique” consultancies, however, are smaller organizations specializing in one or a few of such specializations.
Management consulting has grown quickly, with growth rates of the industry exceeding 20% in the 1980s and 1990s. As a business service, consulting remains highly cyclical and linked to overall economic conditions. The consulting industry shrank during the 2001-2003 period, but has been experiencing slowly increasing growth since. In 2007, total global revenues for management consulting are expected to exceed the $300 billion mark.[citation needed]
Currently, there are four main types of consulting firms:
1. Large, diversified organizations that offer a range of services, including information technology consulting, in addition to a strategy consulting practice (e.g. Accenture, Deloitte). Some very large IT service providers have moved into consultancy as well and are also developing strategy practices (e.g. Wipro, Tata)
2. Medium-sized information technology consultancies, that blend boutique style with some of the same services and technologies bigger players offer their clients (e.g. IDS Scheer, arinso).
3. Large management and strategic consulting specialists that offer primarily strategy consulting but are not specialized in any specific industry (e.g. Bain, McKinsey, BCG).
4. Boutique firms, often quite small, which have focused areas of consulting expertise in specific industries, functional areas or technologies (e.g. Heidrick & Struggles, Towers Perrin, the Avascent Group) . Most of the boutiques were founded by famous business theorists. Small firms with less than ca. 50 employees are often referred to as niche consultancies (e.g. Agility Works, iProCon HCM). If they have a unique concept and market it successfully, they often grow out of this segment very fast or are bought by larger players interested in their know how.
A fifth type of global consulting firm is emerging.
Sourcing Advisory services deal with choices between insourcing and outsourcing, vendor selection, and contract negotiations. The top 10 sourcing advisors (as ranked by the Black Book of Outsourcing) were Alsbridge, TPI, EquaTerra, NeoIT, Pace Harmon, PA Consulting, RampRate, Deloitte, Gartner, and Everest.[1] Although a fast growing sector, the largest sourcing advisory practices would likely be classified as boutiques when considering the management consulting industry as a whole – with one of the largest players, TPI, for example, citing 2006 revenues of less than US$150M during its acquisition by ISG.[2]
Management consulting is becoming more prevalent in non-business related fields as well.[citation needed] As the need for professional and specialized advice grows, other industries such as government, quasi-government and not-for-profit agencies are turning to the same managerial principles that have helped the private sector for years.
One important and recent change in the industry has been the spin-off or separation of the consulting and the accounting units of the large diversified firms. For these firms, which began business as accounting firms, management consulting was a new extension to their business. But after a number of highly publicized scandals over accounting practices, such as the Enron scandal, accountancies began divestiture of their management consulting units, to more easily comply with the tighter regulatory scrutiny that followed.
Added to these approaches are corporations that set up their own internal consulting groups, hiring internal management consultants either from within the corporation or from external firms employees. Many corporations have internal groups of as many as 25 to 30 full-time consultants.
Internal consulting groups are often formed around a number of practice areas, commonly including: organizational development, process management, information technology, design services, training, and development.
There are several potential benefits of internal consultants to those who employ them:
* If properly managed and empowered, internal consulting groups evaluate engagement on projects in light of the corporation strategic and tactical objectives.
* Often, the internal consultant has less ramp up time on a project due to familiarity with the corporation, and is able to guide a project through to implementation—-a step that would be too costly if an external consultant were used.
* Internal relationship provides opportunities to keep certain corporate information private.
* It is likely that the time and materials cost of internal consultants is significantly less than external consultants operating in the same capacity.
Note: Corporations need to be conscious of and consistent with how internal consultant costs are accounted for on both a project and organizational level to evaluate cost effectiveness.
* Internal consultants are often uniquely suited to lead external consulting project teams or act as organizational subject matter experts ‘embedded’ with external consulting teams under the direction of organizational management. As a group internal consultants can closely work with, and monitor, external consulting firm delivery, quality, and overall operating relationship.
External firms providing consulting services have a dichotomy in priority. The health of the external firm is in aggregate more important that the health of the client organization. (client objectives are ultimately secondary to that of the strategic goals of the external firm)
Again assuming proper management, internal consulting groups are less likely have a dichotomy in priority. The health of the client organization is in aggregate more important that the health of the internal consulting group. (Put the company objectives first)
There are several qualifications that can lead to becoming a management consultant; they include:
* The internationally recognized Certified Management Consultant (CMC) professional designation.
* Certificate in Management Consulting Essentials (IMC) – UK, Diploma in Management Consultancy (IMC) – UK
* Accountancy qualifications: Chartered Management Accountant (CIMA), Chartered Certified Accountant (ACCA), Chartered Accountant (CA), Certified Public Accountant (CPA), Certified Management Accountant (CMA) Chartered Cost Accountant CCA Designation from AAFM
* Actuarial qualifications: Casualty Actuarial Society (FCAS) – US, Society of Actuaries (FSA) – US, Institute of Actuaries (FIA) – UK, Faculty of Actuaries (FFA) – Scotland
* Finance qualifications: Chartered Financial Analyst (CFA) Certified Treasury Professional (CTP)
* Consulting qualifications: Master of Science in Business Consulting (BCM) Hochschule Furtwangen University Germany
* Consulting qualifications: Master of Business Administration in International Business Consulting (MBA) Hochschule Offenburg University of Applied Sciences, Germany
* Business Administration qualifications: Master of Science in Management -Europe- (MSc.in Management) ,Master of Business Administration (MBA) -USA Canada Doctor of Management ( Ph.D.), Doctor of Business Administration-USA/Canada- (DBA),Master of Science in Management Consultancy (MSc) – UK
* Public Administration qualifications: Master of Public Administration (MPA) -USA/Canada, Doctor of Public Administration
* Project Management qualifications: Project Management Professional (PMP) recognized globally, Master of Project Management (MPM)- USA/Canada
* Advanced Professional Degrees such as Ph.D.s or Master’s degrees in Engineering and Science, M.D.s, J.D.s etc. are specifically targeted by firms like McKinsey, Bain & Company and the Boston Consulting Group. These degrees may also have concentrations in management consulting, international management, or other relevant focus.
* Akademischer Unternehmensberater (Academic Management Consultant) – Austria – incite -institute for management consultants and information technology experts, Vienna
business coaching courses
business coaching techniques
nlp business coaching
business mentoring programs
business mentoring program
corporate mentoring programs
executive business coaching
business coaching programs
small business coaching
business leadership programs
business coaching resources
business mentoring coaching
business management coaching
business coaching programs
business coaching program
business leadership coaching
small business mentoring
business consulting programs
business management programs
business development programs
business coaching seminar
business coaching seminars
business coaching services
business coaching service
business coaching consulting
top business coaching company
best business coaching company
best business coaching firm
top business coaching firm
top business coaching company
business coaching company
best business coaching
expert business development
business development specialists
business development coach
business development skills
business development company
top business development company
business development practices
top business development companies
advertising business development
business development services
business development strategies
top business development companies
business coaching company
business coaching companies
business coaching firm
business coaching companies
corporate coaching firms
corporate coaching companies
business coaching firms
business advisors
small business advisors
small business advisers
small business strategic planning
business management strategic planning
strategic planning in business
business coach consultant
executive business coach
executive coaching consulting
executive leadership coaching
leadership coaching training
leadership development coaching
leadership coaching services
life business coaching services
business coaching seminars
Miami
Coral Springs
Palm Beach
Ft. Lauderdale
executive coaching seminars
life coaching services
executive life coaching
life coach program
business life coach
career coaching services