final individual esssay mcsc - The future of management consulting: stuck in the past or bound to be - Studeersnel (2024)

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management consulting and strategic change (E_IBK3_MCSC)

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Vrije Universiteit Amsterdam

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The future of management consulting: stuck in the

past or bound to be disrupted?

Date: 19 /05/

Course: Management Consulting and Strategic Change

Course coordinator: dr. Steven van Baarle

Introduction

The management consulting field has been subject to change ever since its introduction aroundthe 1890s (Kipping, 2002). In the first decades of management consulting, its core businessmodel had remained unchanged (Christensen et al., 2013). However, in the recent years, andyears to come many firms have been facing disruptive changes, especially the digitaltransformation (Crișan & Stanca, 2021). Therefore, it is interesting to investigate whethermanagement consulting firms themselves will be facing these very same challenges forcing theindustry to change. Moreover, it is relevant to discuss the management consulting industry asit plays a crucial role in helping firms navigate contemporary challenges. Thus, this essay willbe discussing the debate surrounding the future of management consulting. It addresses thefollowing statement: “The field is destined to remain relatively unchanged in the decades tocome, and there are no truly revolutionary game changers on the horizon for managementconsultancy”. This debate will allow us to assess the durability and viability of this essentialindustry.The debate will be discussed from two perspectives, one against and one for the statement. Theposition against the statement advocates for the revolutionary shift in the consulting field. WithKipping (2002) being one of the most influential accelerators in this school of thought. Themain point discussed in the literature is the gradual shift away from its traditional “solution-shop” business model to a “value-based pricing” model. Further, the democratization ofknowledge and the rise of independent consultants are discussed by various scholars in thedebate.On the other hand, the positioning in favor of the statement is often addressed implicitly in theliterature. With sometimes the same authors pointing out elements of the consulting sector thatwill be sustained. For example, Christensen et al. (2013) argue that the long-standing opacityof the industry has caused it to remain stable. To which I argue, this opacity will remain present.Further, authors in the debate will posit that core consulting elements such as knowledgeintensity and human centeredness will remain stable. The debate will first discuss thearguments against the statement, consequently the positioning in favor of the statement isdiscussed. Followed by a conclusion, where the overarching debate question is answered. Theconcluding verdict of the debate will be that management consulting is bound to be disruptedin the next decades.

care more about the actual deliverables, it can be argued that anyone capable of this would fitthe criteria. We would see a transition where people start relying less on highly reputableleading firms (e., the Big Three) and accept skilled independent freelance consultants (Crișan& Marincean, 2023). This changes the traditional approach in management consulting, wherepreviously clients turned to leading industry players only.Further, with the acceleration of digitalization it can already be said that knowledge has becomeeasily accessible to anyone. This applies to consultants, but also their very own clients.Therefore, a trend is identified where this democratization of information threatens to disruptthe conventional idea where consultants are knowledge providers (Dötsch, 2016). Thus, in thefuture, the long-standing belief that consultants possess a knowledge advantage over its clientswill diminish (Crișan & Marincean, 2023).Moreover, it can be said that management consultancies were bound to become disrupted.When we look at the historical unfolding of the field, this will become apparent. As mentionedbefore, consultants help existing firms strategically manage their issues. However, these issuesat hand inevitably change and evolve over time. Kipping (2002) shows that historically thegrowth of the overall management consulting sector and its leading players have beenintricately connected to the rise of management practices and views. Thus, considering theimpact of the digital transformation on firms today, it has left managers to deal with thechallenging task of navigating issues and opportunities in the digital era. Inevitably, managersseek consulting for these specific types of problems. Ultimately resulting in a shift inmanagement consulting as it seems to mirror these changes in managerial demands to providethe right assistance (Kipping, 2002).

The management consulting field: relatively unchanged

The management consulting industry has remained relatively stable for the past century(Christensen et al., 2013). Therefore, there is reason to believe it will remain as such.Christensen et al. (2013) pointed out factors that made the consulting sector resistant to change,one of which being opacity. The consulting process of big firms have always been opaque,since the client is unaware of the internal procedures leading up to the final solution. This canalso be called the “black box effect”. Because of this, clients, lacking expertise and skills

themselves, cannot accurately assess a consultancy's effectiveness in advance. Thereby makingthem rely on reputation, brands, and connections with MC firms (Christensen et al., 2013). Iargue that this approach to consulting services will remain constant in the future. Reason being,for many, leading firms such as the Big Three are synonymous with the industry. Theseconsultancies have long standing connections with large influential companies globally, and Ido not foresee these ties dissolving anytime soon (Mamedova et al., 2022). Thus, I believe theBig Three will remain dominant players still operating with opaqueness now and in decades tocome.Moreover, despite the previously discussed digital disruptions to the field, there is reason tohave reservations about the size of its impact. One can argue that although the digital revolutionwill impact management consulting, there are limits. Since some core elements of MC cannotbe changed easily. First, Management consulting is and will remain a human-centeredprofession, alluding to the importance of its clients but also the consultants. For example, thevirtualization of consulting through platform-based consulting puts a threat on the traditionaldynamics of the client consultant interaction (Tavoletti et al., 2021). Reducing this physicalinteraction could lead to misconceptions and a loss of authenticity between the two parties(Mamedova et al., 2022). Considering the importance of establishing close bonds with clients,I posit that the trend towards virtualization of consulting will be reduced to a minimum giventhe crucial role of physical human interaction. Additionally, Mamedova et al. (2022) show thatcompared to virtual consulting, the outcome is better compared to when businesses decide toprovide physical services in line with the “solution shop” model. Thus, traditional face-to-faceconsulting will largely continue per usual.Further, with the automation of consulting accelerated by digital technologies one wouldassume human input will diminish in value. However, the opposite is true. Human resourceshave always been central to the value proposition of consultancies, and this will remain. Amidthe digitalization there is an increasing acknowledgement that human resources are theparamount factor for success (Christensen et al., 2013). Thus, it can be said that consultingcontinues to place a high value on its people, maintaining its core human-centeredness in thefuture (Tavoletti et al., 2021).Moreover, traditionally consulting firms are characterized as organizations with a high degreeof knowledge intensity. With the digitalization of consulting, one could assume the automation

references

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