Wednesday, August 1, 2012

The Management Consultancy Phenomenon

If growth and influence are a measure of a successful industry then few have more claim on the top position than that of management consultancy. In 1980, revenues from the consulting industry were estimated at $3bn (Kennedy Information 2002). By 2008, this figure had reached $330bn, an increase of over 10,000 per cent in less than thirty years (Kennedy Information 2009).

Even more remarkable has been the impact of the consulting industry on society. This does not only concern graduates, who now put consultancy as their number one career choice, or even businesses, where the spend on consultants in single outsourcing or IT development projects can run to hundreds of billions of dollars. Consultancy has had an impact on every one of us, from the structures of government and the provision of education, to the very language that we use and the way that we think about the world.

If the statement above seems incredible, it should not. In the last ten years the influence of consultants in the actual governance of countries across the Western world has increased exponentially. As government spending on consultants has risen by 1,000 per cent over last ten years consultants have fostered increasingly close relationships with senators, ministers, and senior public officials in the attempt to influence political agendas and spending strategies. The resulting projects on modernisation, e-business, and new public sector management have cost governments hundreds of billions of pounds with highly varied levels of success.

A clear consequences of this success has been growing dominance of the managerialist practices and discourses in areas which were previously immune, ranging from sectors such as education, charities, 'the arts' and health to whole economies in the developing world. The influence of the consulting industry can also be evidenced in the remarkable spread of the management innovations that have been invented and disseminated by consultancies and consultants, which amount to hundreds of thousands of concepts that organizations across the globe use. These include Total Quality Management, Business Process Re-engineering, Core Competences, Growth Share Matrix and 7-S framework.

The complicity of the consulting industry in the collapse of the dotcom industry as well as high profile companies such as Enron, WorldCom, and Parmalat marked a turning point in public attitudes toward the industry. 

Whether or not consultancy is at a crossroads or whether the recent crisis is a mere blip on the path to greater growth is difficult to tell. However, for students, academics, journalist and consultants, the industry still offers exciting and interesting opportunities in the filed of theory, practice and analysis.

- Deepak Bhatt, Global Management

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