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Management Consulting Industry & Role of a Consultant

Updated on March 8, 2015
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Management Consultanting Services

The profession of management consulting emerged in the 20th century following the rise of management as a unique field of study. It grew rapidly since its conception due to a high demand of consultants’ know-how and their awareness of industry best practices.

Nevertheless, the management consulting industry of today has not always been as we know it. Prior to the 1930’s, the most prestigious firms that offered management consulting services operated in several different professional fields (Abbott, 1988). It was only after the passing of banking legislature in the late 1930’s, namely the Glass-Steagall Banking Act, that the most prestigious consulting firms began to identify themselves as united within the same professional field of management consulting (Fortune, 1944).

Management consulting firms’ growth was spurred by the changing needs of large American industry and government clients. Throughout the century, growth came from new industries such as non-profits seeking consulting and starting from the mid 1960s, the internationalization of firms (McKenna, 2006).

During the 1990’s, management consulting became the focus of many academic studies and the disciple got a serious academic following (Kipping & Engwall, 2002). At this time, academics began analyzing the theoretical and institutional implications of the rapid growth in management consulting (Clark & Fincham, 2002).

Interestingly, management consultants do not yet hold full professional status such as that of lawyers for instance, but this is rapidly changing. Criticisms of the profession stems from the fact that consulting services are not currently subject to state regulation, individual accreditation or professional liability.

Although historically consulting lacked a clear educational path, a number of factors in this area are contributing to the profession’s eventual institutionalization. These include: specialized publications, a codified body of knowledge, the increasing number of MBA's entering the industry, the contribution of consultants to scholarly journals, and the new interest in studying management consulting firms in academic circles (Alvesson & Johansson, 2002).

List of Top Management Consulting Companies

According to Vault.com's 2012 Firm Ranking which is based on firm prestige and reflection of issues that consultants are concerned about most, the following ten firms come out on top:

  1. Bain
  2. McKinsey
  3. The Boston Consulting Group (BCG)
  4. Deloitte
  5. Monitor Group
  6. A.T. Kearney
  7. Oliver Wyman
  8. The Cambridge Group
  9. Analysis Group
  10. Booz & Company (now known as Strategy&)

Role of a Management Consultant

Management consulting is an exciting and sought-after career. Do you know what it is that management consultants do?

Simply, consultants provide their clients with objective advice and expertise on whichever area the client wants advice on. The most common areas that clients hire management consults for are: strategy, change management, risk management, IT, organizational restructuring, communications, and process improvements.

In academic circles, it is commonly accepted that management consultants have the following eight functions (Turner, 1982):

  1. Providing information to a client.
  2. Solving a client's problem.
  3. Making a diagnosis, which may require redefining the problem.
  4. Making recommendations based on the diagnosis.
  5. Assisting with the implementation of the recommended actions.
  6. Building a consensus and commitment.
  7. Facilitating client learning.
  8. Improving organizational effectiveness.

Marvin Bower, the acclaimed Managing Director of McKinsey & Company from 1959 to 1967 famously explained the industry and the practice of management consulting in his contribution to the 1962 Harvard Business School’s Career Guide with these words, “management consulting firms – which are rapidly emerging as members of one of the newer professions – help top management executives of businesses, governmental units, institutions, and other organizations solve their major management problems” (Bower & Daniel, 1962).

Trends in Management Consulting

Management consulting is a very dynamic industry. Below are some of the industry's latest trends:

  • Specialization rather than the jack-of-all-trades "generalist".
  • Topics including Sustainability; Customer Relationship Management (CRM), especially cloud-based CRM services; and Supply Chain Management.
  • The explosion of boutique consulting companies in recent years since it has become relatively easy to navigate the marketplace with recent technological advanced.

Qualifications of a Management Consultant

Management consulting is a very selective industry, especially amongst the top firms who only hire the very brightest. Below are some of the qualifications that consulting firms look for when recruiting new hires:

  • A stellar academic record (top of class).
  • An MBA or doctorate degree (although top firms hire undergrads and pay for the employee's MBA degree. Roughly one third of the top MBA graduates and one-sixth of all elite undergraduates go on to work in management consulting.
  • For those who are not just straight out of college, management consulting firms look for specific expertise such as with process improvement or applications like SAP.
  • Skills including:
    - analytical skills, excellent communication skills, conceptual skills, leadership, initiative, teamwork, English language and at least one other.
  • Flexibility and adaptability.
  • International experience is a plus.

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List of References

Abbott, A. (1988), The Systems of Professions: An Essay on the Division of Expert Labor. University of Chicago Press, 1-31.

Alvesson, M. & Johansson, A. W. (2002), Professionalism and Politics in Management Consultancy Work. In T. Clark, & R. Fincham, Critical consulting: new perspectives on the management advice industry (pp. 228-246). Oxford: Blackwell Publishers.

Clark, T., & Fincham, R. (2002). Critical Consulting: New Perspectives on the Management Advice Industry. Blackwell Business , 1-16.

Djelic, M.-L., Ainamo, ,. A., & McKenna, C. (2003). MESSAGE AND MEDIUM: The Role of Consulting Firms in Globalization and Its Local Interpretation. In M.-L. Djelic, & S. Quack, Globalization and Institutions: Redefining the Rules of the Game. Cheltenham: Edward Elgar Pub.

Fortune. (1944). Doctors of MAnagement. Fortune Managine , 144-146.

Kipping, M., & Engwall, L. (2002). Management Consulting: Emergence and Dynamics of a Knowledge Industry. Oxford: Oxford University Press.

McKenna, C. D. (2006). The World's Newest Profession: Management Consulting in the Twentieth Century. New York, NY, USA: Cambridge University Press.

Turner, A. N. (1982). Consulting is more than giving advice. Harvard Business Review , 60 (12), 120-129.

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