The Global Management Consulting Sector - a Commentary

Management practice is as old as civilization itself, management theory and management consultancy is of more recent vintage. They had been started in the end of nineteenth century. The first pure consultancy was that of Arthur Little in the United States, who started out in 1886 with a focus of technology and engineering economics. Many factors are underlying in the expansion of this service sector. Some authors say it was due to the Taylor’s “scientific management”. David (2001) suggests four forces i.e., increasing number and complexity of companies; the spread of corporate ideology to noncorporate sectors; the organization for the World War II effort; and the growth impact of business education and the business press. Mckenna (2006) argues that this expansion is due to the amalgam of three professions (engineering, law, and accounting).

Management consultancy has been embraced in the United States, but now EU and Asia Pacific are also emerging as management consultants. Indian firms such as Tata Consulting Services (TCS), Infosys and Wipro have become formidable competitors. The major service lines offered by management consultants have been divided into four groups: strategy, human resources, operations, and information technology. Outsourcing has also been added to these four categories. Authoritative estimates from government and private sector sources are one reason in gathering true statistics.

Small management consultants can prosper by adopting the credo of marketing and entrepreneurship to heart: they must be pro-active, innovative, and risk-taking. Taking the long run view, it can be said that for economic prominence in general and management consultancy in particular, the nineteenth century was that of Britain while the twentieth belonged to the United States. The twenty first century is likely to belong to Asia, specifically India and China.

Strategy consultants have much to offer a top executive in terms of improving the bottom line. Yet little is known about the strategy consulting industry, because the firms and their clients are often reluctant to disclose details of their activities (Payne, 1986).

References:

David, R.2001. The Emergence and Evolution of an “Expert” Field. Unpublished Ph.D. dissertation. Cornell University.

McKenna, C. 2006. The world’s Newest Profession. Cambridge University Press.

Payne, A.F.P. (1986), “New Trends in Strategy Consulting Industry”, Journal of Business Strategy, Vol. 7 No. 1, pp. 43-45, ISSN 0275-6668.