Consultants provide Independent assessment as they are external advisors with no bias to marketing or operations or product development team. As long as no problem comes up, the above proposed team of two consultants and six non consultants do a fine job. But the moment a problem or a crisis arises, blame games starts within the team. Our Professor, Shoji Shiba, a world renowned expert on TQM calls this “Passing the Buck”. The blame game never ends and marketing points finger at Finance whereas Operations would cite that lack of effort from sales team was the problem. As long as there is no sign of crisis, everything seems well. That is why, in most of the cases, external consultants are bought in to revive the company.
Let’s take the case of Tata Nano. The product was deemed to be a successful product with in-house consultants providing the best possible domain knowledge available within the company. But, eventually, as the product did not meet its expectation, everyone in the organisation start passing the buck. A CEO of a major corporation knows his company inside out. But consultants bring in the best practices followed by other companies including competition companies. Along with it, consultants are armed with propriety frameworks and Methodologies that has stood the test of time. These are time tested solutions which has worked in most of the cases.
The management consulting industry has grown in USA after Second World War. Traditionally, many economists and psychologists took up management consulting assignments. In the early stages of this profession, the consultants were known as Industrial Engineers. Those industrial engineers mainly consulted to manufacturing industries with time and motion study assignments. It’s a no shocker that MBA graduates are choosing this management consulting profession in most B-schools. India and China are investing heavily in their own upper-level education systems, and they are now graduating large numbers of MBAs, scientists, researchers and engineers from their own universities. Many Asian nations have already achieved excellent success in this regard, including China, South Korea, Singapore, Taiwan and Japan. This means that a growing global cadre of young people with graduate degrees and high ambitions are seeking entry-level work in consulting of all types.
Emerging countries like India, Brazil, China and Russia (BRIC) are the consulting hot spots. The whole concept of off-shore consulting, in particular, IT consulting provided by firms like Wipro, Infosys, TCS provide have a strong foothold across the world. The engineers who constitute majority of the employees merely tend to provide technical solutions that works pretty well in the those cases. This is just the case of IT Consulting. How do these Indian companies fare when it comes to Management Consulting. They themselves hire external consultants.
It is very difficult to isolate a cause and effect relationship between companies hiring consultants and increases in the value of those companies. The reasons are many. For example, by hiring a consultant, if there is an increase in Morale of the employees, this leads to higher productivity. Do we attribute this increase in productivity as an increase in value for the company?
The future of Consulting Industry is very bright and the big boys (Mck, BCG, Bain) will continue to expand and venture into new industries, new geographical locations. At the same time, client is also demanding more specialization. It is more of a requirement than a bonus. There is also a burst of freelance consulting, niche consulting and academicians who provide consulting and research. These will continue to grow. Thus, Consulting and IB have a symbiotic relation with the Economic growth of a country
References: http://www.plunkettresearch.com/consulting-market-research/industry-statistics
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