Consulting is not a well-defined field. Definitions of a consultant range from “anyone who is out
of work and owns a briefcase” to “a specially trained and experienced person who makes an
organized effort to help management solve problems or improve operations through the
application of judgment based on knowledge, skill, and systematic analysis of facts.” The
consulting field is wide-ranging and diverse. While a full treatment of it in all its breadth and
diversity is beyond the scope of this summary, we will describe the major types of firms that
make up the field, the activities and functions common to most areas of consulting, and the entry-
level opportunities that exist.
The majority of consulting firms fall into four major categories:
Large Consulting Firms - These are firms whose only business is consulting. They
typically employ more than fifty consultants; a few of the largest employ more
than a thousand consultants. Large firms may either be a “generalist” firm or
have many divisions each with its own specialty. Some examples are the well-
known management consulting organizations Arthur D. Little; Booz, Allen &
Hamilton; McKinsey & Company; and the Boston Consulting Group.
Small and Medium Consulting Firms - This type of firm employs from two to fifty
consultants. It is estimated that 20-30 percent of all consultants work in firms of
this size. These are often specialty firms, offering a small range of services or
catering to a special type of client.
Management-Advisory-Services (MAS) Divisions of CPA Accounting Firms -
These are divisions within organizations that also offer accounting, auditing, tax
and other financial services. These divisions are typically quite large and operate
internationally. The services offered by MAS divisions usually involve
information systems, electronic data processing (EDP), financial management,
and strategic planning. Although these “firms” are really divisions of larger
organizations, Business Week reported that the Big Four CPA firms were listed
among the top ten management-consulting firms in terms of dollars billed.
Individual Consultants - This group includes individuals who are sole owners of
businesses, professionals (e.g., CPAs and engineers) who work as consultants
outside their full-time employment, and university-affiliated academics,
(typically business schools), who consult part-time. Individual consultants are
almost exclusively specialists who provide limited services to a narrow group of
clients. Academicians and professionals with expertise in such specialty areas as
transportation, productivity, and the behavioral sciences have begun to compete
effectively with the larger consulting organizations.
Aside from organizational size and structure, consulting firms are classified along dimensions
such as scope, area of concern, approach, and range of services offered. The most important of
these classifications is area of concern. A general distinction can be made between firms that are
generalist and those that are specialists.
Recently, there has been a move toward more specialization, with some firms limiting service to
one area and others dividing into divisions with different specialties. Specialization can be by
management function, the client’s industry, size of project, or other criteria. The most common
dimension of specialization is management function. The major specialty areas of business
consulting are as follows:
1. General Management Consulting - This type of consultant frequently works
directly with the client’s top management team on matters of general concern.
Projects in general management might include studying strategic management
decision making, and revising organizational structure or management style.
2. Financial Management - A financial consultant advises management on issues of
financial planning. Projects in financial consulting might include the study of and
recommendations on capital expenditures, enterprise development, and the design
and implementation of an accounting system.
3. Marketing Management - Consulting in marketing can take place at three levels.
The highest is marketing strategy formulation. The next is marketing activities and
operations. Projects at this level include evaluation of sales and advertising,
assistance with distribution, and product development. The third level is marketing
research. Here, the consultant collects data and may advise the client about decisions
to make on the basis of the data.
4. Production Management - Consulting in production management can focus on the
product itself (design, quality, etc.), the methods and organization of production, or
the people involved in production. In the second area, a project might involve
redesigning the workflow layout to improve productivity (process redesign or
reengineering), or assisting in inventory control. A project involving the “people
side” of production might be concerned with compliance with government safety
rules or development of a program to improve job satisfaction.
5. Information Systems and Data Processing - Consulting in information systems is a
primary interest of systems analysts and MAS consulting divisions. These
consultants deal with issues regarding the kind of information, how much, and in
what form it is needed for management decision-making and control. They also
assist in system development, improvement and integration. A possible project could
include development and implementation of an EDP system for a client, or a
feasibility study of computerizing financial control systems.
6. Personnel Management - Traditionally, consulting in this area focused on personnel
administration, job evaluation, and the development and evaluation of compensation
systems. Recently this area has expanded to include more behavioral-science
research methods and intervention strategies. Projects range from job analyses and
employment-test validity studies to designing and implementing career-planning and
organizational development programs. A related area in which consultants practice is
labor-management relations. A consultant might work as an advocate for one side or
a mediator between union and management.
7. Government-Related Consulting - Government-related consulting firms specialize
in keeping up with current legislation in specific areas in order to advise clients on
compliance with government regulations. A firm might advise clients on the
regulation of packaging and advertising, the deregulation of transportation and
financial services, and also, how the client will be affected by and if possible take
advantage of changing regulations.
8. Strategic Planning - This is one of the fastest growing areas for management
consulting firms. Consultants help management develop and evaluate long-term
strategic plans, and advise them on major decisions such as acquisitions and mergers.