Why Are Management Consultants Important?
Consulting firms started to appear in 1930s due to the Glass-Steagall Banking Act
. Since then, their activities increased in the United States and in 1950s, the American consulting firms started to expand globally. One of the most famous consulting firms, Boston Consulting Group (BCG) was founded in 1963. In the following years, the analytical focus of all consulting firms increased significantly. This ended up in innovative analytical and strategic processes and frameworks. The growth lead to five consulting firms having more than 1,000 employees in 1980s.
Today, there are many different consulting firms with more than 1,000 employees. On top of the list are companies like Bain, Boston Consulting Group, McKinsey, A.T. Kearney and Monitor Group.
Let us take a closer look at why consulting firms are important for their clients.
Business perspective
In process of business development, thorny issues and situations beyond inner problem solving capability often stagnate and even hamper the whole business plan. When inner power and resources become limited, it is natural to seek external help. This is where management consultants come handy. Businesses hire management consultant for some of these reasons:
1. Third party objectivity. Some specific types of projects like restructuring, layoffs, benefit restructuring and changes of strategy it can be hard to make everybody satisfied if someone in the organization makes the decision. It can be easier to outsource the decision to a 3rd party. Hiring management consultants specialized in these fields can be a good solution to this dilemma.
2. To obtain best practices. Experienced and resourceful consultants know which solution is best for specific problems through project experiences. Very often, different companies could encounter same obstacles that are not addressable by internal perspectives. The advantage of outside management consultants in this regard is that they can bring in best models in broad sense and cater them to the specific business.
3. Outsourcing for cost-effective productivity. It is not impossible and unrealistic for business to recruit all kinds of talents in reservation just for one or two rare situations, nor is it economically viable to enter long-term contracts for transitory changes. Therefore, one motive behind the necessity of consultant might an economic one. Although commissions are high for top firm consultants, it is cost-effective in the end. Besides, the analytical expertise of management consultants is very hard to obtain by short-term internal trainings.
Career perspective
Now, let's discuss the position of management consultants from a career perspective. Management consulting jobs are some of the most popular types of job for MBA's and graduates with the necessary education. There are a coupe of reasons for that.
1. Financial consideration: admittedly, many business school graduates considering top-notch consulting firms are not only applying for the jobs out of love for this industry. At least not in the first place. Although the salary for management consultants is not as high as for investment bankers, it comes close. You can expect that the salary of management consultants is high, and well above what you will expect from average graduate jobs.
2. Professional skills: due to the demanding nature of consulting, the recruiters will be looking for applicants with top-notch skills, experience and leadership potential. Once you join a consulting firm, you can expect lot of trainings from software skills to business knowledge. You will keep learning a lot as long as you are a management consultant. Usually, that is one of the most important reasons people join a consulting career. You will learn a lot.
3. Networking consideration: consulting is all about cooperation and collaboration. Teamwork is necessary for management consultants. You might have heard of the travel buzzes about management consultants. Indeed, consultants travel around a lot for different projects. This entails you the opportunity to work with various kind of people and the opportunity to form your personal networks for future careers.
4. Reputation consideration: working for a top consulting firm will look great on your resume. Management consultants enjoy high career reputations in business industries. You can be proud of being a consultant, and this will help you regardless whatever career plans you have.
by: Richard Jenkins
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