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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.

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