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Management Consultants

What can individual management consultants or management consultancy as a profession contribute to the recover from current economic climate. Introduction • Definition ] • Management consultant history development • Possible contribution of management consultant • Current economic climate, whats needed but organisations in the recovery • What I am going to talk about in the essay – base of my argument Paragraphs • Globilization • Technology • Control of risk • Business become lean • Create jobs

Management consultant is a profession and a practice that helps organisations improve productivity and performance through the use of expertise and knowledge. Consultants have been viewed as external experts brought in to provide advice about a specific problem where internal managers are ill equipped or unsure of the best strategy or solution [Kubr, 199622.

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Consultants use analytical tool to produce organisations future objective and formulate strategic plan to achieve these goals. As pointed out by Rossi (2009) to create value consultants must be precise and creative in ddressing problems organisation faces, proposing innovative solution and taking responsibility of implementation of the recommendations. In the current economic climate no organisation has been immune to the affects of the unstable economic climate. In this environment management consultant has become important due to the fact that a change in direction is required; consultants offer this change in a decisive way since they have an impartial opinion and an external view of organisation.

As a result of the credit crunch the current economic climate is unpredictable, with high level of unemployment, high inflation and euro zone crisis; organisations have had to find innovative ways to stay competitive in their markets. This has resulted in organisations reducing the use of consultants as firms cancel or delay project in order to save money. However for some firms the current economic crisis is beyond anything they have experienced before, with modest guidance from historic evidence to depend on, they have looked toward management consultants for assistance and help to survive the recession.

The purpose of this report is to provide an overview of the different ways in which consultants can contribute to the economic recovery in general, whilst critically analysing the interventions management consultants can make and its limitations to be specific. Globalisation and technological advances led the economic boom that nations experienced during the late 1990s, however due to the banking crisis of 2008-2010 the economies around the world have never full recovered.

The recovery of the global economies according to Shaikh (2010) is going to dependant on business spending and investments in emerging market such as China as well as efficient management of resources. In the current economic climate, organisations are facing high cost of production and low levels of liquidity, by moving production to low-cost countries organisations will be able to decrease their cost of production. Management consultancy will be imperative for organisation in the strategic planning in order to meet these objectives; as they offer expertise in efficiency management and risk management needed in investing in new markets.

Leaman (2008) pointed out that the one of the challenges organisations face when moving into a new country is management of workforce due to the difference in culture. Consultancy can help organisations in managing and training an international workforce by advising the managers on human resources issues such as workforce retention and in turn provide workforce stability. Consultancy can intervene by offering the organisation specific tools to control employee turnover and services which in turn will benefit the organisation retain their best employees.

Retaining the best employees is important in this current economic environment as it cuts training cost for new employees that replace them. This will improve the organisation’s efficiency and also the organisation’s liquidity. Leaman concluded that during a recession a lot of hard work is now focused on driving out costs and making organisations more effective and efficient. A way in which organisations can improve their efficiency is by investing in technology. Porter and Millar (1985) agued that improvements in technology enhances organisations’ competitive edge and leads to greater efficiency.

In the current economic environment the improvements in efficiency in businesses will contribute to the economic growth due to the fact that businesses would be utilizing their resources more in production. Management consultancy can contribute to this increase in efficiency by raising attention to problems in current system or implementation of new system. The expertise in data collection and analysis of system help management consultants to measure different ways in which organisation can improve the current system or propose a new one.

This can be seen in the Personal Care North America’s order management system that was created by a supply chain and system consultancy firm called Clarkston in 2008. After the merger of Chesebrough-Ponds, Lever Brother and Helen Curtis the organisation had three different order supply systems which consultants proved was an inefficient system as it was expensive and slow to run. They analysed data from customer responses and inventory management to collude that the organisation needed to merge the systems and have one unified system that provides a real-time view of the entire order-to-cash process.

According to Clarkston Consulting by having a full integrated system the business process is simplified and efficient providing a platform for organisations to meet their needs and projected growth. This intervention made by the consultancy firm indicates that consultancy as a practice can contribute to an increase in efficiency in organisations, which will lead to an increase in economic activity by the organisation and in turn help the economy. According to Akintoye, MacLeod (1998) the economic recovery is going to be reliant on the improvements in market driven companies.

They have suffered in growth due to the lack of disposable income of their customers due to increases in VAT and inflation. They have also suffered due to the increasing power of consumers who have more opportunities to choose Cairo (2010). In this situation management consultancy can contribute by advising the organisations the different way in which they could increase their understanding of their market, thus give them the ability to increase their customer retention and draw new customers.

Consultancy can achieve this through market research and analysis of consumer trends, so they can tune existing marketing complain to optimization strategy for the changing consumers. By ensuring that the organisation meets these objectives consultants can provide a platform for the organisation to achieve future growth. This growth will lead to an increase in spending by the organisation on such things as infrastructure, recruitment and training, thus creating jobs for an economy that is experiencing high level of unemployment at the moment.

The time and cost over-runs associated with organisational growth make it imperative that the investments safe and provide good returns. It’s important due to the fact that the economic environment is in a bad state as a result of bad risk management by bank in lending. Management consultancy can reduce the risk of investment and create a safe path for growth by planning ahead to avoid pitfalls. By using specific methodologies to analyse market data they ensure that product launches are successful.

Management consultants’ analysis of market data will allow organisation to make accurate strategic marketing decision to reduce the risk of frailer for their investment. By reducing the risk of failure the business will be able to grow and produce more output. Vassalou (2002) study shows that an increase in output or growth by businesses contributed to an increase in GDP for a country. Management consultant could also intervene in situation when businesses are about to invest in a risky investment. From expertise and nowledge gained from other businesses, management consults could step in with advices for businesses not to invest in certain products or markets. By intervening and stopping the investment by business into risky ventures the management constancy reduces the cost of bailout that will be needed to recue businesses that are too big to fail. Management consultants on the other hand have limitation to the contribution they can make to the economy. There are other external factors that are outside the control of management consultancy that affect the data collection, analysis and advise they give to business.

Economic factors such as the euro zone crisis have adverse influence on UK business due to the relationship and the dependence of UK businesses to mainland Europe. This is due to the fact that UK exports to Europe amounts to 48% total exports and 15% of annual GDP Global Britain Publication (2009). This is vital to the recovery of the economy due to the fact that at the moment Europe is are suffering high levels of inflation and have low disposable income to purchase UK products or services.

This is going to lead to reduction in demand for UK goods and services in Europe, thus affect the growth and sustainability of UK businesses. In this situation management consultancy’s influence on the business will be limited due to the fluctuations in the economy. The analysis of market data will be constantly changing which may lead to businesses cutting consultancy as they will not be achieve the results the client are expecting. The practice is criticised for not having real corporate world experience, knowledge and skills. Kubr M 1996 Management Consulting: A Guide to the Profession 3rd revised ed. Geneva ILO