Adapted from:

Type author
Dr. Joe names here
O’Mahoney and Calvert Markham

O’Mahoney 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

O’Mahoney and Markham: Management Consultancy, 2nd edition

 2.1 The basics of consulting

O’Mahoney 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=PL1u9bQdmE5EEe
 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

O’Mahoney 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

O’Mahoney 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

O’Mahoney and Markham: Management Consultancy, 2nd edition

 The growth of consultancy

O’Mahoney and Markham: Management Consultancy, 2nd edition

 The impact of the credit crunch

O’Mahoney 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

O’Mahoney and Markham: Management Consultancy, 2nd edition

 Personalised vs. Commodified strategies

O’Mahoney and Markham: Management Consultancy, 2nd edition

 2.2 The institutions of
consultancy

O’Mahoney and Markham: Management Consultancy, 2nd edition

 The institutions of consultancy

• Institutional weakness in consultancy?

• Professional institutes

• Trade associations

• Procurement institutions

O’Mahoney and Markham: Management Consultancy, 2nd edition

 2.3 Why do consultancies exist?

O’Mahoney 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

O’Mahoney and Markham: Management Consultancy, 2nd edition

 In House vs. External Costs

O’Mahoney and Markham: Management Consultancy, 2nd edition

 2.4 International perspectives

O’Mahoney and Markham: Management Consultancy, 2nd edition

 International Markets

• North America

• Europe

• Asia

• Middle East

O’Mahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

O’Mahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

O’Mahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

O’Mahoney and Markham: Management Consultancy, 2nd edition

 Global share of consulting revenues

O’Mahoney and Markham: Management Consultancy, 2nd edition

Consulting humour

The Consultants

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

O’Mahoney 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.

O’Mahoney and Markham: Management Consultancy, 2nd edition