Imus Institute

College Department

Management Consultancy
Kriza S. Matro
IV-BSA
Mr. Valmores

CHAPTER 7
STAGES OF MANAGEMENT CONSULTING ENGAGEMENT - PART I

1.

Describe the analytical approach and process as applied to MAS engagement.

2.

Analytical approach and process refers to the systematic, objective and rational
method of solving business problems. It involves a professional-level ability to
ascertain pertinent facts and circumstance, define problem, evaluate the
alternative courses of action and present conclusions and recommendations to
solve the problem.

What are the basic stages of a management consulting engagement?

I.
II.
III.

IV.

Negotiating the engagement
Engagement planning
Conducting a consulting assignment
A. Problem identification and solution
B. Identification of suitable and accurate sources of information
C. Data analysis and diagnosis
D. Solution development
E. Preparation and presentation of the report and recommended
solution
F. Implementation
G. Follow-up evaluation of the implemented solution
Evaluating the engagement and post-engagement follow-up

Management Advisory Services Part 1

Page 1

  It minimizes misunderstanding between the CPA and the client.  Technical importance of the service to the client. 6. f) Provide the basis for estimating fees. 3. distributing and assigning responsibility for various segments of an engagement. What is an MAS proposal letter? What are the content of this letter?   4. It is written communication between the CPA and the client setting forth the terms and conditions of a proposed consultancy work. What are the uses of an engagement plan? a) Provide a means for arranging. d) Facilitate time and efficiency control over personnel assigned to the engagement. c) Provide the framework for reporting progress of an engagement. Scope of the work and the role of CPA. It assists in better administration of the engagement.3. Its contents generally include: 1. Project organization. What are the factors that should be considered in setting the fee to be charged to clients?  Nature of the MAS job. b) Provide a means of control for determining g whether all segments of the engagement have in fact been completed. e) Assist in an engagement review by a partner or supervisor. Give the advantages of preparing a proposal letter. where appropriate.  Qualifications of the staff required. 5. It is an advisable first step in most MAS engagement.  The job’s degree of difficulty and complexity. 2. 6. Fees and billing arrangements. Approach to the study.  Time involved. 5. 4. Firm qualifications. Objectives and benefits of the engagement. Management Advisory Services Part 1 Page 2 .

Project costs. The objectives and a description of each task to be accomplished. Scope of the problem. It is an operational plan for conducting a management service engagement and considered as a blueprint of the remainder of the project. A description of tangible output required at completion of each task.7. Describe the activities involved in the problem definition phase?           10. Objectives of the problem-solving process. Identity of the problem. What are the basic contents of an engagement program?       9.  8. Define an engagement or work plan. A list of manpower required. The starting and completion dates. Intensity of the problem Time dimensions of the problem Location of the problem Human elements involved in the problem Support systems surrounding the problem Tracking systems related to the problem Institutional process for managing the problem What are the data-gathering techniques available to a management consultant?      Interviews Questionnaires Observation Document gathering Charting  Organization chart  Data flow diagram  System outflow  Detail flowchart  Decision table Management Advisory Services Part 1 Page 3 . A list of the personnel assigned.

deals with fact sources and identifies places where the consultant can look to find facts associated with the operation of a client.     13.11.        Problem identification and desired outcome – begins with initial recognition of a symptoms pointing to the problem and ends with the complete problem description. Explain briefly the steps in the problem-solving process. Less-Structured Analysis – could be employed to a counteract some limitations of the structured approaches such as (1) difficulty in application and (2) stifling of creativity of the consultant. Sources Corporate planning Engineering Research and development Manufacturing Accounting Facts -Corporate objectives -Expansion plans -Engineering schedule for products -New product development schedules -Inventory status -Product pricing and costing -Operating expenses 12. Decision-Level Analysis – has the purpose of depicting the varied interrelationships among the decisions made throughout the segments and levels of organization. Data analysis and Diagnosis – consultant needs to apply a variety of fact analysis techniques to determine the effectiveness of each decision made. Input/output Analysis – problem situation is analyzed in terms of its inputs and outputs. Identification of suitable and accurate sources of information and data-gathering . Structured Analysis – organization is comprised of a number of well-defined functions. which in turn are made up of a group of activities. Solution selection Preparation and presentation of the report and recommended solution Implementation of recommended solution Follow-up evaluation of the implemented solution Management Advisory Services Part 1 Page 4 . Give 5 internal sources of data and the corresponding data that may be obtained from such. Describe the 4 approaches that a consultant may use in analyzing facts gathered in relation to the problem at hand.

and perhaps what the client considers being important. Discuss briefly (at least 5) most commonly used techniques in gathering facts. Structured Analysis – organization is comprised of a number of well-defined functions. Sources Industry reports Competition Distributors Customers Data base retrieval systems 15. Charting – fact gathering that provides a pictorial representation of a dimensions of the client’s organization or of its activities. Give 5 external sources of data the kind of information that may be drawn for them. Input/output Analysis – problem situation is analyzed in terms of its inputs and outputs. It can be conducted at all levels of the organizations. what is not available.14. Questionnaires – restricts channel of communications and should be used with great care for the purpose of fact finding. and in ascertaining relationships between individuals. Management Advisory Services Part 1 Page 5 . Observation – useful in gathering facts prior to an interview. Facts -Corporate data and analysis -Industry news -Products -Products literature -Market conditions -Customer Analysis -Profile facts -Sales -Product. in verifying statements made during an interview. Describe the following approaches to analysis:    Decision-Level Analysis – has the purpose of depicting the varied interrelationships among the decisions made throughout the segments and levels of organization. market and industry news and analysis -Economic forecasts Interviews – considered the best way to zero in on problems. Document gathering – collect all relevant documents to gain an understanding of what is presently done and how it is organized. which in turn are made up of a group of activities.      16.

Less-Structured Analysis – could be employed to a counteract some limitations of the structured approaches such as (1) difficulty in application and (2) stifling of creativity of the consultant. D D B D B 6. 19. 4. 9. facts or items are sorted into different groups by virtue of their features. c) Numerical analysis – numbers are combined in order to understand how they relate to each other. It suggests that two variables are correlated because there is a cause and effect link between them. 3. d) Association – recognition of two things that are connected in some ways. 17. 20. Discuss briefly the following analysis strategies. 2. 5. e) Correlation – recognition that the variation in one variable occurs in step with that of another. Multiple Choices 1. 15. C D C C A Page 6 . f) Causation – explains correlation. 7. 14. D D D D D 16. 13. 12. 8. 10. 17. 18. b) Classification – process whereby items are sorted into different groups wherein defined by external criteria rather than by arbitrary features. a) Categorization – process whereby data. Management Advisory Services Part 1 B D D D C 11.

Give two approaches in generating alternative solutions in an environment of uncertainty. What are the steps involved in the solution development phase of the problemsolving process?  Generation of solution alternatives  Evaluation of solution alternatives  Choice of preferred solution alternative  Detailed development of the selected solution 2. SCAMPER Approach: Substitute.   3. timeliness of outputs. Combine. Experts are individually polled for ideas and subsequently summarized and presented to each participant. Delphi approach: This employs an idea generation concept similar to brainstorming. In economic review. Adjust. Each participant reviews the feedback and the consultant again polls the experts to establish collective responses and the process is reported until the responses have stabilized. it is useful by learning the reasons for variances in cost. Put to other uses. Eliminate and Reverse. Why is there a need to make an evaluation of the implemented solution?  There is a need to make an evaluation of the implemented solution to know if the implemented solution is operative effectively in the client’s business. It is also needed because users needs change over time and these changes will lead in time to the need for further improvements. Establishment of controls over implementation activities Selection and training of needed personnel Installation of needed physical facilities Development of standard and documentation Testing of the solution being implemented Follow-up and evaluation of the implemented solution 4. Management Advisory Services Part 1 Page 7 .PART II 1. Magnify.CHAPTER 8 STAGES OF MANAGEMENT CONSULTING ENGAGEMENT . What are the activities in the implementation phase of the problem-solving process?        Development of a work plan. error rates. Operation review is evaluated to consider how well they function with particular emphasis on inputs.

What is the rationale of conducting a post – engagement follow-up?  Usually programs and systems appear to operate effectively during the first few months of implementation but later run into difficulty because of many reasons like the change in operating conditions and/or the design may prove to be faulty and that is the very reason there is post-engagement follow-up. B 2. It will provide data for determining required resources for subsequent similar engagements.and utilization of outputs. 7. It will provide tangible evidence of quality consciousness consistent with the other areas of a CPA’s practice. What are the benefits that may be derived in conducting post-engagement evaluation and follow-up? It will provide direction for staff training program in the MAS division. 5. It is the observation of a CPA to the client’s programs and systems that are installed for a sufficient long period in order to early uncover deficiencies and to make the necessary modifications. D Management Advisory Services Part 1 Page 8 . D 3. And lastly in future performance review. The benefit is a post-engagement follow up is the early detection of deficiencies and also helps in making necessary modifications. it identifies potential improvements to the implemented system and estimates the effort required to implement the improvements. What areas should be covered in conducting an evaluation of the consultancy engagement?       Proposal Engagement Program Work program and schedule Source data and documentation Reports Results Multiple Choices 1.    It will serve as a basis for evaluating on-the-job performance of staff personnel. 6.