Adapted from:

Dr.
TypeJoe OMahoney
author names and
hereCalvert Markham

OMahoney and Markham:

Management Consultancy, 2nd edition

Chapter 2: The
Consulting Industry

Oxford University Press, 2013. All rights reserved.

 Chapter Objectives

You will learn:

What management consultancy is

Why management consultancy exists
The history of the consulting industry
The institutions of the industry
Variations in consultancy around the world

OMahoney and Markham: Management Consultancy, 2nd edition

 2.1 The basics of consulting

OMahoney and Markham: Management Consultancy, 2nd edition

1. What is consulting / management consultancy?
1. What is consulting / management consultancy?

https://www.youtube.com/watch?v=3wPeND2gvqc
Seven keys to successful consulting

https://www.youtube.com/watch?v=9zU2Q654vtQ
 What are the main skills of a good consultant?

What makes a great consultant?

https://www.youtube.com/watch?v=oxFK6lQLGxE&list=PL1u9bQdmE5EEeh
 What is management consultancy?

The creation of value for organisations, through

the application of knowledge, techniques and
assets, to improve business performance.
This is achieved though the rendering of
objective advice and/or the implementation of
business solution (MCA 2009)

Identifying a problem
Researching and recommending a solution
Helping implement that solution

OMahoney and Markham: Management Consultancy, 2nd edition

 Background

Touch, Deloitte
Arthur D Little 1886
Booz
McKinsey
Kearney

Pure strategy consultancies:

McKinsey
Bain
 Defining the boundaries of consulting

OMahoney and Markham: Management Consultancy, 2nd edition

Advisory, tax and audit
 The history of consulting

The industrial revolution onwards

Consultants 1990 2010

Growth 1990 2000
The dotcom crash
The credit crunch

OMahoney and Markham: Management Consultancy, 2nd edition

 The growth of consultancy

OMahoney and Markham: Management Consultancy, 2nd edition

 The impact of the credit crunch

OMahoney and Markham: Management Consultancy, 2nd edition

 Recent trends affecting consultancies

Personalised vs. commodified strategies

The IT market and outsourcing

Sophisticated clients

From partnerships to public companies

OMahoney and Markham: Management Consultancy, 2nd edition

 Personalised vs. Commodified strategies

OMahoney and Markham: Management Consultancy, 2nd edition

 2.2 The institutions of
consultancy

OMahoney and Markham: Management Consultancy, 2nd edition

 The institutions of consultancy

Institutional weakness in consultancy?

Professional institutes

Trade associations

Procurement institutions

OMahoney and Markham: Management Consultancy, 2nd edition

 2.3 Why do consultancies exist?

OMahoney and Markham: Management Consultancy, 2nd edition

2.3 Why do companies buy management consultancy?
 Why do consultancies exist?

They do things clients cannot

Transaction cost economics

Economic development and specialisation

Political and economic ideologies

Government institutions

Labour markets

Legitimation and identity

OMahoney and Markham: Management Consultancy, 2nd edition

 In House vs. External Costs

OMahoney and Markham: Management Consultancy, 2nd edition

 2.4 International perspectives

OMahoney and Markham: Management Consultancy, 2nd edition

 International Markets

North America

Europe

Asia

Middle East

OMahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

OMahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

OMahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

OMahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

OMahoney and Markham: Management Consultancy, 2nd edition

Consulting humour

The Consultants

https://www.youtube.com/watch?v=9KtqGhoddF4
 Summary

OMahoney and Markham: Management Consultancy, 2nd edition

 Summary

This chapter has shown:

How consultancies expanded on the back of a growing industrial

sector that required management expertise.

That the industry has changed in response to economic crises,

sophisticated clients, and the development of IT and outsourcing
businesses.

That there are varied and competing explanations for

understanding why consultancies exist.

How different international regions create different markets for

consultancies.

OMahoney and Markham: Management Consultancy, 2nd edition