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.
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 Allen Hamilton 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 Allen, 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.
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.
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
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.
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 Allen Hamilton 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 Allen, 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.
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.
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
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