You are here: Home Books Consulting
« July 2019 »
Su Mo Tu We Th Fr Sa
Log in

Forgot your password?
Document Actions


Up one level

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. 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. The first pure management and strategy consulting company is considered to be McKinsey. McKinsey was founded in Chicago in 1926 by James O. McKinsey, a professor at the University of Chicago Graduate School of Business, but the modern McKinsey was shaped by Marvin Bower, who believed that management consultancies should adhere to the same high professional standards as lawyers and doctors. McKinsey is credited with being the first to hire newly minted MBAs from top schools to staff its projects vs. hiring older industry personnel.  Many competing firms has been created by former employees of McKinsey.

After World War II, a number of new management consulting firms formed, most notably 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. Another major player of more recent fame is Bain, whose focus on shareholder wealth (including its successful private equity business) set it apart from its older brethren. Also significant was the development of consulting arms by both accounting firms (such as Accenture of the now defunct Arthur Andersen) and global IT services companies (such as IBM, which acquired PricewaterhoseCooper Consulting). Though not as focused on strategy or the executive agenda, these consulting businesses were well-funded and often arrived on client sites in force.

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. Conversely it must also be said that in those days (and still today) 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). The combination of these two factors made it difficult for consulting to emerge in Europe. 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. McKinsey, Bain, and BCG retain their strong strategy focus, while many other generalist management consultancies such as Accenture and Capgemini are broadening their offering increasing into high volume, lower margin work such as system integration.

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 had been experiencing slowly increasing growth since. In 2004, revenues were up 3% over the previous year, yielding a market size of just under $125 billion.

Currently, there are four main types of consulting firms. First, there are large, diversified organizations, such as Accenture, Capgemini, and IBM that offer a range of services, including often information technology consulting, in addition to a strategy consulting practice. Second, are the medium-sized information technology consultancies, such as Hitachi Consulting, that blend boutique style with some of the same services and technologies bigger players offer their clients. Third, are the large management and strategic consulting specialists that offer only strategy consulting but are not specialized in any specific industry, such as A.T. Kearney, Bain, Boston Consulting Group, and McKinsey. Finally, there are boutique firms, which often are quite small and have narrow areas of consulting expertise in specific industries or technologies. Most of the boutiques were founded by famous business theorists.

90 Days to Success in Consulting by Roland Buresund — last modified 2015-12-11 23:59
1999 Career Guide by Roland Buresund — last modified 2007-08-07 16:19
Be Your Own Strategy Consultant by Roland Buresund — last modified 2009-09-14 10:41
Bluffarens Handbok Konsultverksamhet by Roland Buresund — last modified 2007-12-08 19:19
Business Consulting by Roland Buresund — last modified 2007-08-08 00:14
Buying Professional Services by Roland Buresund — last modified 2015-12-13 17:21
Con Tricks by Roland Buresund — last modified 2007-08-07 16:23
Confessions of a Management Consultant turned CEO by Roland Buresund — last modified 2011-05-08 15:35
Consulting Demons by Roland Buresund — last modified 2007-08-07 16:55
Peer into the dark, corrupt world of Management Consulting... if you dare.
Critical Consulting by Roland Buresund — last modified 2014-01-21 00:00
Dangerous Company by Roland Buresund — last modified 2007-08-07 16:54
Essential Tools for Management Consulting by Roland Buresund — last modified 2010-12-05 19:35
Flawless Consulting by Roland Buresund — last modified 2007-08-07 16:56
Försäljning i konsultföretag by Roland Buresund — last modified 2007-09-07 10:49
Getting Naked by Roland Buresund — last modified 2015-09-27 13:35
Getting Started in Consulting by Roland Buresund — last modified 2007-09-18 15:51
Declare your independence with the new, completely updated Second Edition of Getting Started in Consulting
Guerrilla Marketing for Consultants by Roland Buresund — last modified 2010-05-21 17:33
High Impact Consulting by Roland Buresund — last modified 2007-08-07 18:12
High Income Consulting by Roland Buresund — last modified 2007-08-07 18:07
High Value Consulting by Roland Buresund — last modified 2007-08-07 18:10

Powered by Plone, the Open Source Content Management System

This site conforms to the following standards: