The complexity of the modern world applies as much to organizations and their management as to any other area of activity. In fact, in some ways the contem-porary organization and its management is one of the most complex entities that we have to deal with. Organizations are complex systems of interacting activ-ities and processes. Human resources must be combined with physical and finan-cial resources in order to achieve organizational aims and objectives. Managing just the human resources aspect of an organization is complex enough. We have to consider, for example, how to recruit and select human resources, how to motivate them, how to train them, how to lead them, and how to evaluate them.
Even within just one functional area of a business then, the manager may find that occasionally they need to draw on additional skills and advice over and above those which they would normally have access to (Biech 1998). In addi-tion, managing organizations is becoming increasingly technical. For example, the contemporary manager might need to understand complex computer sys-tems or intricate tax calculations, and so on. Again, few individuals have all the skills necessary to encompass every facet of management in the modern busi-ness organization. The need for the consultant and for consultancy, therefore, has if anything, become more important and pressing (Sadler, 2001). Outlined below are some of the reasons and occasions when organizations turn to consultants for help or instigate a consultancy-type process.
● Additional skills/experience: One of the most frequent reasons for instigating a consultancy project, and particular calling in an outside consultant, is when an organization requires additional skills or experience over and above that which they can draw on with their existing management team. As already mentioned, the modern business organization is complex and requires many skills to func-tion effectively. Even the largest organizafunc-tion may not have the necessary skills or experience to deal with a particular problem or to investigate a particular area. The smaller organization, in particular, will often lack all the necessary skills and experience. For example, many organizations do not have, say, mar-keting research skills, or information technology skills and experience. Where these are required in order to improve organization effectiveness or to address a particular organizational problem, then the skill and experience of an out-side consultant may be required (Kubar, 1996); (Rasiel, 1999).
● A fresh perspective: Another reason when organizations turn to consultants for help, and again particularly with reference to the use of outside consultants, is when a fresh perspective on a particular problem or aspect of the organiza-tion’s operations may be needed or considered to be valuable. As in so many areas of life, sometimes we are so close to problems, or have looked at them in a particular way for so long, that we find it difficult to see what the real problem is or how to solve it. An outside consultant can often bring simply a fresh perspective to such problems or issues. In fact, this may be one of the most important benefits of turning to outside management consultants for help.
● No vested interest: Our third reason for organizations turning to consultants is where a consultant is used partly or even primarily because they have no vested interest and therefore can be more objective and/or open in their approach to an organizational issue or problem. For example, a consultant who is used to investigate, say, falling sales and market share may be able to look at areas and make proposals which the existing sales and marketing team simply could not because they have, or might be perceived to have, vested interests. Clearly, this particular reason for organizations turning to consultants only applies when either an external consultant is being used or when the consultants come from a different part of the organization than that which is the focus of the consultancy activities.
● No time: One of the most scarce and therefore precious commodities for most managers is time. In fact, most managers simply do not have enough time to complete all that is required of them. Since many consultancy projects encompass areas and activities that are outside of the ‘normal’ line of duty of the manager, many managers simply do not have the time to perform con-sultancy-type projects and activities especially where they are one-off or spe-cial projects. Although we tend to think that using consultants is primarily associated with the use of the external consultant, in fact the use of an inter-nal consultant or consultancy team may also be a way of overcoming the problem of lack of time on the part of the normal management team.
Sometimes a consultancy process is employed using an internal consultant, or team of consultants, who will address a particular organizational problem or issue in the form of a special project by clearing time from their usual day to day functional activities and responsibilities. The use of internal consult-ants in this way to deal with the time problem can entail the internal con-sultancy team being totally liberated from their normal duties for the period of the consultancy exercise, or perhaps being liberated from part of their duties during which time they work as ‘consultants’ in the organization.
● Legal/regulatory/ethical reasons: In some circumstances, using consultants, and particularly consultants who are required to come from outside of the organ-ization, may be a legal and/or regulatory requirement. For example, in order to examine allegations of wrongdoing, or malpractice on the part of the man-agement of an organization, as part of, say, an enquiry or perhaps even a criminal investigation, it may be obligatory or at least good practice to use a consultant for this process. Even where there are no such legal or regulatory requirements, it may be considered more ethical to use consultants to address
an organizational issue or problem. The obvious advantage is that this will help to ensure a more objective report.
These are some of the main reasons why organizations use consultants and par-ticularly why they often turn to outside consultants. It is important to stress, however, that much consultancy-type research is in fact conducted by internal members of the organization acting in a ‘consultancy’ capacity. Clearly there are differences in the issues and approaches when using internal versus exter-nal consultants. We shall consider later in the chapter some of these advantages and disadvantages.
Using consultants or a consultancy-type approach has many potential advan-tages, but it also has disadvantages and limitations and some of the more impor-tant of these are outlined in the next section.
Activity 4.1. Can you think of any administrative/organizational structure arrangements that companies can use when using internal staff to work on one-off ‘consultancy’ type projects?
4.3 Disadvantages and limitations of management consultants
As many organizations have found to their cost, using consultants, and especially outside consultants or even a consultancy-type approach with inter-nal staff is no panacea to every organizatiointer-nal issue and problem. Among the more important potential disadvantages and limitations of using consultants and/or consultancy-type approaches are the following:
● Cost: Admittedly somewhat unfairly, external consultants and consultancy companies have a reputation for being expensive. Certainly, when reckoned on a cost-per-day or completed-project-basis, often the external management consultant would be costlier than if the organization had used internal staff.
Experience and expertise rarely come cheaply. However, we do have to be a little careful with regard to the high costs of consultants and consultancy in as much as what really matters is value. Very often, using a consultant, or even a consultancy-based approach with an internal team, can often offer better value for money. Certainly, we have to be careful to appraise and mon-itor the costs of consultancy and consultants, but cost effectiveness can be achieved if, as we shall see in the next chapter, we are careful in the selec-tion of our consultancy team, and in particular, in the planning and control of consultancy research and projects.
● Resentment/Fear/Antagonism: Bringing an external consultant or consultancy team into an organization can be a major source of resentment among exist-ing staff. Sometimes this resentment is due to the fact that brexist-ingexist-ing in an out-side team is seen as being something of a slur or insult to the existing internal management team, seemingly implying that the internal team are simply not
up to the task. Often, resentment is more simply based on fear, for example, the existing organizational staff may fear that the consultant may make rec-ommendations which may result in, say, some form of reprimand or even worse, loss of job. Such resentment and fear can mitigate against the suc-cessful outcome of a management consultancy or a research exercise. Existing management staff may simply refuse to co-operate with a consultant or, per-haps, even may knowingly distort and pass on false information. Although resentment, fear and antagonism may principally apply to the use of exter-nal consultants, in fact, the use of interexter-nal staff on consultancy problems and projects may also cause some resentment, fear and antagonism. For exam-ple, managers not called upon to be involved in or conduct an internal con-sultancy project may feel that their services and expertise are not valued or that they may similarly be the focus for some sort of potential disciplinary actions. Again, it is important to recognize the potential for this problem when using consultants and/or conducting consultancy-type exercises and research. As with the issue of cost, the problem can be at least reduced through careful planning and implementation of consultancy projects.
● Lack of familiarity with organization: As we have seen, the outside consultant can bring a fresh perspective to an organizational problem, while at the same time, being an outsider, having no vested interests to complicate issues. At the same time, these advantages can be offset by the fact that the outside con-sultant will lack familiarity with the client organization. This lack of famil-iarity often means that the consultant must first undergo a learning process before any effective consultancy and research can be conducted. This learn-ing process can extend the time of the consultancy project and is often a major source of frustration for the client who wants his or her problems solved as quickly as possible.
● Lack of responsibility/accountability for results: One of the major criticisms of outside consultants is that they lack real responsibility and accountability for results. Certainly, in many cases the responsibilities of the consultant end with the making of recommendations to the client. Implementation and fol-low up of these recommendations is then left to the client organization. As such, it is often argued that the outside consultant can avoid any responsi-bility for the effectiveness, or otherwise, of any implemented courses of action.
As we shall see later, professional management consultancy increasingly involves the management consultant in at least accepting professional respon-sibility for the effectiveness of any agreed or proposed courses of action and often the management consultancy contract will include responsibilities for implementation and follow up. Obviously, if these responsibilities are to be included, then they need to be defined and agreed between consultant and client at the outset. They are, therefore, part of the initiation and agreement processes of consultancy projects. We shall return to these issues when we con-sider the planning and design of management consultancy research projects in Chapter 5 and in Chapter 12 when we consider more specifically the issues of implementation and follow-up of consultancy research projects.
These then are some of the potential disadvantages and problems with using consultants and/or with using consultancy-based approaches to organizational issues and problems. Again, it is important to remind ourselves that many of the disadvantages and problems can be removed, or at least mitigated against, and the advantages of using consultants and/or consultancy-based approaches can be achieved through effective design and implementation of consultancy.
Activity 4.2. Identify some ways in which resentment, fear and antagonism towards the consultant or consultancy team can be minimized in an organization.
4.4 Management consultancy – types, roles and activities
Although the overall role of the management consultant is, as we have seen, that of providing expertise and advice, within this there are a broad range of consultancy types, roles and activities. It is, therefore, useful to consider and categorize these different activities. In order to categorize management con-sultancy approaches and activities, however, we need some basis or system for the categorization. You will not be surprised to learn that there are any num-ber of ways in which consultancy types, roles and activities can be classified.
Just some of the ways in which this can be done include, for example, the following continuums:
● internal versus external,
● fact finding versus educational,
● ad hoc versus continuous,
● problem/project centred versus exploratory/investigative,
● imposed versus voluntary.
Among, perhaps, the most useful models of different ways of conceptualizing the range of different management consultancy types and activities, however, are those of:
● task versus process models,
● non-directive versus directive,
● consultancy styles.
Each of these is now discussed.