Slide 1-Teena Bagga
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Aim
The course aims at bringing the students closer to reality by developing their understanding of the professional prerequisites to practice of management in terms of required skills and attitude to respond proactively to rapid discontinuous change in business environment. Integrative in approach, this course aims at developing not theoreticians but practitioners who are expected to sense the ongoing conflict between environmental change and internal desire of management for stability.
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Objective
Course Objectives:
Bring students closer to reality by developing their understanding of the professional prerequisites to practice of management in terms of required skills and attitude to respond proactively to rapid discontinuous change in business environment
Develop students the attributes of a consultant.
Develop not theoreticians but practitioners who are expected to sense the ongoing conflict between environmental change and internal desire of management for stability.
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On completion of this course, students will be able to :
Examine political, economic, geographic and cultural sources that shape a global competitive context
Provide deep understanding and working knowledge of managing a consulting firm
Be able to develop a systematic / structured approach to diagnose management problems.
Develop critical thinking skills through reading and case studies to apply social responsibility concepts and ethical principles to current business scenario
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Consulting Proposals. Identification and Definition of Problem, Fact-Finding Leading to Solution Development and Implementation, Developing Strategic and Tactical Plans and Subcontracting, Pricing of Consultancy, Acquiring and Developing Talents for Consulting.
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In-house Management versus Management Outsourced
Why a Sense of Skepticism and Unease Towards Management Consultants. Cost versus Value of Advice, Separating Consulting Success from Consulting disaster. Some Revealing Situations.
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Types of organizational culture, Strength of organizational culture, Function of organizational culture, Importance of culture to the organization, Cultural Models, Cross- Cultural Perspectives, Geert Hofstede and Cross- Cultural Issues
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Adaptation to Changing Environment in General and Economic Environment in Particular, Economic Growth and Change Areas, Emerging Opportunities in Various Sectors including Social Sector, Management Practice and Cultural Issues, The global Political Situation, The Global Competitive Environment and the internal scene in India, War Game.
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Relationship among Various Stakeholders, Reasons for Conflict of Interests Among Stakeholders, Corporate Governance and Ethics. Why Unethical Decisions Leading to Conflicts are Taken, Power and Politics, Initiatives on Corporate Governance by the Governments.
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Assessment
uncertainty in how new regulations will affect business,
uncertainty about what competitors are doing, and
uncertainty about how new technology will affect the business—
…..
uncertainty leads to a short-term focus
we believe that a failure to strategically plan five years into the future can end up destroying value.
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Globalization
Understanding foreign cultures is essential to everything from the ability to penetrate new markets with existing products and services, to designing new products and services for new customers
to recognizing emergent, disruptive competitors that only months earlier weren’t even known.
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Big companies are struggling with innovation
A better innovation process is at the top of the agenda for most CEOs
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& Regulation
A changing regulatory environment is always of concern in certain industries,
Uncertain energy, environmental and financial policy is complicating the decision making for nearly all companies today.
Dealing with an unknown regulatory environment is fast becoming the new normal and companies are deciding to get on with it—whatever “it” may be—despite the angst.
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Technology
The pace of technological improvement is running at an exponentially increasing rate.
the pace today makes capital investment in technology as much an asset as a handicap
because a competitor may wait for the next-generation technology, which may only be a year away, and then use it to achieve an advantage. What’s a CEO to do?
Similarly, the ability for even the best of technologists to stay informed about emerging technology is in conflict with the need to master a company's current technology.
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Diversity
A particular subset of human capital planning is found so often in our research that it is worth its own mention.
Diversity brings many challenges, as it makes it far more likely that people do not agree, and the lack of agreement makes running a business very difficult.
At the same time, the lack of diversity within many large company leadership teams leads to a narrow view of an ever-changing and diverse world—contributing to groupthink, stale culture and a tendency to live with the status quo for too long.
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Complexity
There’s no doubt that life and business have gotten more complex, even as certain tasks and activities have become easier due to information technology.
The pace of change is quickening.
The global economy is becoming still more connected, creating a much larger and more diverse population of customers and suppliers.
Manufacturing and services are increasingly targeted at smaller, specialized markets due to the flexibility that IT provides in these areas. We know from our knowledge of the patterns of evolution that, in reality, systems tend to become more complex as they evolve, then become simplified again.
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Information Overload
It is said that the only true constant is change, and in today’s world nothing is changing more, or growing faster, than information.
Every day, 2.5 quintillion bytes of data are created.
The ability of companies, much less individuals, to consume and make sense of the information that is available (and necessary) to make good decisions is becoming a nearly insurmountable challenge.
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Supply Chains
Because of uncertainty in demand and the need to stay lean.
companies are carrying smaller inventories than ever.
At the same time, uncertainty in supply, driven by wildly changing commodity prices, an apparent increase in weather-related disruptions, and increasing competition for raw materials makes supply chain planning more challenging than ever.
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The lack of sophisticated approaches to information acquisition, analysis and the development of unique insight leaves many companies at a disadvantage;
they lack a long-term strategic imperative and instead jump from one strategy to the next on a year-to-year basis.
Everyday problem-solving competency among today’s business leaders is also limiting their ability to adequately deal with the first nine problems.
This is why corporate managers tend to jump from one fire to another, depending on which one their executives are trying to put out, and in many cases the fast-changing business environment is what ignites these fires in the first place.
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OUTSOURCER
COMPANY
Services
Organization
Level
Agreement
Service
Level
Agreement
Outsourcing denotes the continuous procurement of services from a third party, making use of highly integrated processes, organization models and information systems.
“the strategic use of outside resources to perform activities traditionally handled by internal staff and resources” Dave Griffiths
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40% to 50% of the top 500 companies in the world is leveraging on outsourcing for most of their business processes.
Current figures values this robust industry to a staggering $20 billion USD.
On an average global outsourced projects involve about 28% that belong to the hardcore IT sector, 11% to finance sector, 15% to sales and marketing and 9% from administrative sector. The remaining 22% belong to many other different sectors such as consumer distress calls, general data segregation jobs, tourism etc.
Recent trends in
Provide services that are scalable, secure, and efficient, while improving overall service and reducing costs.
Traditional role - reaction to problem
Reduction and control of costs
Avoid large capital investment costs
Insufficient resources available
Keeping up with cutting-edge technology
Creating value for the organization and its customers
Building partnerships
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Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions or processes to a third-party service provider.
Knowledge process outsourcing (KPO) describes the outsourcing of core business activities, which often are competitively important or form an integral part of a company's value chain. Therefore KPO requires advanced analytical and technical skills as well as a high degree of proprietary domain expertise
Types of Outsourcing
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Recruitment Process Outsourcing(RPO) is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.
Engineering process outsourcing( EPO)
EPO offers global consulting and outsourcing services providing end-to-end services in the areas of Engineering and Technical Process Outsourcing.
Legal process outsourcing (LPO) refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company. This process has been marked by the practice of outsourcing any activity except those where personal presence or contact is required.
Types of Outsourcing
Form a strategic alliance
Tasks in this quadrant are high in strategic importance, but contribute little to operational performance.
So, although you need to retain control of them to ensure they are done exactly as you want, or you get the quality you want, they are relatively insignificant in terms of cost or smooth running and so not worthy of full in-house focus.
This means that you should form a strategic alliance  . For example, an auto manufacturer could align with an advertising agency.
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Retain
Tasks in this quadrant are high in strategic importance and have a big impact on operational performance.
These tasks should be kept in-house so that your organization keeps maximum control.
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Tasks this quadrant are important for successful operational performance, but are not strategically important.
These tasks could safely be outsourced. They're simply not worth spending in-house time managing.
For example, the auto manufacturer in the example above could outsource its delivery logistics to a specialist company.
How you deliver cars to dealers is generally not a source of competitive advantage, as it doesn't touch the customer's experience, but how well it's done has a huge impact on operational performance.
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Eliminate
Tasks in this quadrant are not important to your organization's overall strategy and nor do they make a significant contribution to its day-to-day operational performance.
Although you might not be able to eliminate these tasks completely, it's important to check why you're doing them.
An example might be running a subsidized staff crèche. Although having an in-house childcare facility might help you to attract certain staff (strategic importance) or reduce absenteeism caused by childcare problems (operational performance), does the effort involved justify doing it?
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Outsourcing
Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize in their field. The outsourced vendors also have specific equipment and technical expertise, most of the times better than the ones at the outsourcing organization. Effectively the tasks can be completed faster and with better quality output
Concentrating on core process rather than the supporting ones: Outsourcing the supporting processes gives the organization more time to strengthen their core business process and help in Increased productivity and Efficiency
Risk-sharing: one of the most crucial factors determining the outcome of a campaign is risk-analysis. Outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they plan your risk-mitigating factors better
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Outsourcing
Risk of exposing confidential data: When an organization outsources various services, it involves a risk if exposing confidential company information to a third-party
Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner.Selection of supplier !!!
Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat
Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of multiple organizations at a time. In such situations vendors may lack complete focus on your organization’s tasks. Loss of Control!!!
Provider may not understand business environment
Provider slow to react to changes in strategy
Too dependent on service provider
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Program implementation
Transferring staff
Establish management procedures
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So…
The guiding principle of outsourcing has been the transfer of a process or function, that is typically not a core competence of an enterprise, to an organization that has expertise in that area, allowing the enterprise to effectively utilize its resources in its core areas of business.
This principle has dual objectives:
Save on cost of operation by acquiring services from a team more productive that the internal resources (based on their expertise, or their ability to leverage infrastructure across multiple clients); and
Improve quality and value of operation by acquiring services from an organization with best practices in managing that business activity.
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Onshore Outsourcing
Onshore outsourcing limits the outsourced work within the locality or the country of origin, making outsourcing providers more accessible and is nearer to the company itself.
There will be no problem with traveling and it makes communication between you and the outsourcing team more comfortable and available.
Onshore outsourcing will not impose as much risk as offshore outsourcing, but the benefits that you would enjoy is not as great and as rewarding as its foreign counterpart.
Aside from that, when it comes to intellectual property rights, you and the outsourcing company that you are working with are covered by the same legal rules while in the practice of legality and ownership of intellectual properties.
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Offshore Outsourcing
Offshore outsourcing can be defined as the system of collaborating with an external organization and assigning that organization to carry out some of your business roles.
Usually the product or the service which has been outsourced would not be sold in the offshoring location; it would only be marketed in the outsourcer's country.
Offshore outsourcing gives organizations access to high-quality services at lower operating costs.
There are basically three main categories in offshore outsourcing; business process outsourcing (BPO), infrastructure and technology outsourcing and software outsourcing.
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Insourcing vs. Outsourcing – Managing the complexities of the global delivery
model requires a deep expertise in the local environments and experience with cross border business operation, making the evaluation of whether to outsource a project or leave it in-house very different from a purely onshore sourcing decision.
Structure of the solution – The lack of maturity of the offshore industry requires a significant commitment from the enterprise in supporting the development and growth of the outsourcing solution. Making that commitment, keeping a eye on the long-view necessitates a strategic sourcing decision, distinctly different from a domestic sourcing contract.
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Resource deployment/redeployment – Offshore Outsourcing transactions rarely include asset and resource transfers from the buyer to the service provider, whereas in onshore sourcing deals, that is a common point of negotiation.
Knowledge transfer – the transfer of information and training around the buyer’s IT environment and other relationship parameters are very difficult to do in offshore sourcing. Since this has a direct effect on path to productivity for service providers, it becomes an important evaluation criterion, as well as a phase in the sourcing cycle.
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Arthur D.Little (1890s)
Founded by James McKinsey in 1926 (Chicago)
Hiring of bright young MBAs
Rise of management consultancy after World War II
Development of tools for strategic management
Boston Consulting Group (1963), McKinsey&Co, Harvard Business School
Bain&Co - focus on shareholder wealth
Consulting within accountancy and technology firms
PwC and IBM
Niche consultancy firms
Corporate social responsibiity
Amity Business School
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The rich and powerful have always needed advice on how better to manage their affairs and make effective decisions. 
The first recognised management consulting firm was formed in 1890 by Arthur D. Little, initially specialising in technical research, later building a specialism in what became to be known as ‘management engineering’. 
The first management consultancy to serve both industry and government clients was Booz Allen Hamilton, founded in 1914
The first modern, pure management and strategy consulting company was McKinsey & Company. Founded by James McKinsey in 1926 (Chicago) .
After WW2, the growth in globalization aided the boom in consulting and saw the development of a number of tools, methods and products that are now taught in business schools around the world. 
Very much a demand-driven industry, consultancy grew off the back of economic development, first in the USA, then Europe and the rest of the world.
Management consulting grew with the rise of management as a unique field of study. The first management consulting firm was Arthur D. Little , founded in the late 1890s by the MIT professor of the same name. Though Arthur D. Little later became a general management consultancy, it originally specialized in technical research. Booz Allen Hamilton was founded by Edwin G. Booz , a graduate of the Kellogg School of Management at Northwestern University , in 1914 as a management consultancy and the first to serve both industry and government clients. The first pure management and strategy consulting company was McKinsey & Company . McKinsey was founded in Chicago during 1926 by James O. McKinsey , but the modern McKinsey was shaped by Marvin Bower , who believed that management consultancies should adhere to the same high professional standards as lawyers and doctors . McKinsey is credited with being the first to hire newly minted MBAs from top schools to staff its projects vs. hiring older industry personnel. Andrew T. Kearney, an original McKinsey partner broke off and started A.T. Kearney in 1937 .
After World War II, a number of new management consulting firms formed, most notably Boston Consulting Group , founded in 1963, which brought a rigorous analytical approach to the study of management and strategy. Work done at Booz Allen, McKinsey, BCG, and Harvard Business School during the 1960s and 70s developed the tools and approaches that would define the new field of strategic management , setting the groundwork for many consulting firms to follow. Another major player of more recent fame is Bain & Company , whose innovative focus on shareholder wealth (including its successful private equity business) set it apart from its older brethren. Also significant was the development of consulting arms by both accounting firms (such as the now defunct Arthur Andersen ) and global IT services companies (such as IBM ). Though not as focused on strategy or the executive agenda, these consulting businesses were well-funded and often arrived on client sites in force. Additionally, there has also been the development of successful niche consulting firms (such as Kaiser Associates), which are often credited with providing more focused work at greater value.
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industry
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Management consulting has grown quickly, with growth rates of the industry exceeding 20% in the 1980s and 1990s. As a business service, consulting remains highly cyclical and linked to overall economic conditions. The consulting industry shrank during the 2001-2003 period, but had been experiencing slowly increasing growth since. In 2004, revenues were up 3% over the previous year, yielding a market size of just under $125 billion.
Currently, there are three main types of consulting firms. First, there are large, diversified organizations, such as Accenture and IBM Global Services that offer a range of services, including information technology consulting, in addition to a management consulting practice. Second are the large management and strategic consulting specialists that offer purely management consulting but are not specialized in any specific industry, like McKinsey & Company . Finally, there are boutique firms, often quite small, which have focused areas of consulting expertise in specific industries or technologies.
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McKinsey & Company
Ernst & Young
Competitive strategy
Economic model
KM strategy
Technology
HRM
Example
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Why?
The cost of ‘doing it yourself’ is often more than getting experts in to do it for you, even if their daily rate is high.
 It is unsurprising that ‘expertise’ is not the only reason why clients bringing in consultants.
Clients are quite capable of doing themselves, yet they do not have the time.
Client managers call in consultants because their image of ‘expertise’ provides security in an inherently insecure and uncertain business world.
Clients can use this ‘expert identity’ to bolster their own image in an organisation or to provide legitimacy to a decision that the client has already made.
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What?
The definition of management consultancy is no minor problem. The Management Consultancies Association (MCA) in the UK defines the role as:
“…the creation of value for organisations,
through the application of knowledge, techniques and assets,
to improve business performance.
This is achieved through the rendering of objective advice and/or the implementation of business solutions.”
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What ???
“…to try to take ownership of an organisation’s problems and use research and logic to develop possible options for a way forward.”
Matt Baumann
Jane Ridley
In Nutshell …..
Consulting is about helping an organisation get from A to B…
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Inadequate background or knowledge
Poor organization of ideas
Hostile attitude
Too many Gatekeepers
Overly Competitive Attitude
Segregated them into three categories:
Strategy and general business consulting firms in India
IT consulting firms in India
HR consulting firms in India
Find out the kind of openings/profiles these firms have for Fresh/Experienced Management Graduate.
And the competency required for the various profiles.
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The consultancy market has experienced unprecedented
change through the 1990s and over the
last decade. Strong growth over this period has
been driven by waves of new ideas, not least the
introduction of technology in all its forms: from enterprise
resourcing planning systems during the
boom years of the late 90s, through the inflation
and bursting of the internet bubble, a trend towards
offshoring, to today’s market where cost reduction
is the service in demand.
Throughout this time, the competitive landscape
has been in flux. Of particular significance
was the major restructure in the early 2000s as
most of the ‘big 5’ professional services firms sold
off their consultancy practices in response to market
perceptions and regulatory pressures in the
aftermath of Enron. Ernst & Young, KPMG and PricewaterhouseCoopers
all sold their consulting
business and embarked on a new ‘One Firm’
strategy to maximize the opportunity from this
unique positioning.
end-to-end service, involving multiple service lines,
can add exponential value to the client. It also sets
out some of Deloitte’s lessons learned in organizing
and incentivizing the practice to achieve this.
Traditionally, professional services firms have
gone to market and sold work by service line (for
example: consulting, audit, tax, corporate finance).
This model is not always conducive to offering the
best client service. Firstly, staff working in one area
may not understand the competencies and skills
offered by other parts of the firm, and so will miss
out on opportunities for these to provide more
rounded and complete client advice. Secondly, and
perhaps more seriously, the firm’s recognition and
reward structures may motivate staff to work in
service silos, delivering as much as possible of an
engagement from within their own team or division,
when perhaps other teams have additional
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or more relevant skills. The result is rarely the best
outcome for the client, who may receive very different
service depending upon which part of the
firm was originally engaged. It is important to remember
that clients do not care which service line
they are speaking to. They have a challenge – and
they would like it solved. The best solution to this
challenge will often come from a multi-disciplinary
team, possessing a blend of different skills.
In 2000, Deloitte was perhaps best known as an
audit and financial advisory firm, but consultancy was
also a core and expanding part of the business. Having
retained its consultancy capability, whilst other
firms sold theirs, Deloitte had a valuable differentiator.
In particular, the firm was well positioned to provide
a broad and comprehensive service, supporting the
client from the start of an issue or initiative, through
to the implementation of a solution. Whilst many
firms could compete on advisory services and many
others could compete on implementation and operational
services, few could offer such a full breadth of
support through the lifecycle of the business.
For example, consider a company that has enjoyed
success in its local market, but is now seeking
to develop and grow its business. Typically, this
will trigger a series of questions:
1. Which products and services should be developed?
Where and how should they be
taken to market?
organizational structures will best support
cost effective operations and the planned
strategic changes and growth?
and located to maximize investment incentives
and to minimize its tax burden?
4. What structure will best meet the company’s
ongoing financing needs and how
should these needs be secured?
5. How should the organization plan a
Organizations in such a position need a broad
consultancy advisor, and preferably one that can support
them through the journey, from the initial strategy
through to its execution and implementation.
Emphasizing the breadth and integration of our
capability, we moved to a single brand, ‘Deloitte’ in
2003, and subsequently introduced the ‘One Firm’
strategy in 2004. Our overall strategy was to focus
on the client, not the service organization, at a time
when other organizations were looking internally at
divesting and rebuilding their consulting businesses
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strategic choices:
market with a portfolio of businesses that
can team effectively to serve clients with
distinction.
finance).
known as the place where the best
choose to be.
exceptional client service with an unrelenting
focus on quality.
in restoring public trust in auditing and
business advisory services.
clients by leveraging synergies across the different
facets of our capability. The One Firm approach
supported the delivery of more complex engagements.
By offering co-ordinated support across a
variety of different areas, clients received a more
joined up and valuable service. Client relationships
were strengthened and staff benefited from more
challenging and rewarding work.
barriers, with staff going to market as
‘Deloitte’ for all services, adopting an integrated approach
to marketing supported by a high profile
‘Have you asked Deloitte?’ campaign. However, embedding
this culture needed considerable effort and
required incentives. Our lessons learned include:
The approach requires staff (especially senior
managers and above) to understand all
the firm’s service lines. This does not mean
making a technology consultant an expert in
tax, for example, but it does mean that the
technology consultant needs to understand
where we can help clients on tax issues and
who to go to for advice on this internally.
Firm-wide propositions are necessary so
that clients can understand the value of
having a broad and end-to-end service
offering at their disposal. We invested in
the development and marketing of propositions
such as ‘Business Critical Programmes’,
‘Enterprise Cost Reduction’ and ‘Finance Transformation’.
It is key to focus on relationships within current and target clients. We established
cross-firm client target lists, representing a
balance of industries and organizational maturity.
We targeted and approached these organizations in a co-ordinated manner, drawing on our full range of competencies.
Forming multi-disciplinary client teams and
account development teams gives huge benefits in cross-fertilization of ideas and skills and understanding of other areas of the business.
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service line activity and referrals. Our
assessments of partner and staff performance
recognize sales for any service line as
strongly as the originator’s own service line.
Communication of examples and rewarding
of successes is important and needs to
be constantly reinforced.
applied at all levels of the organization,
not just partners, in order for it to be
successful.
through unmatched breadth and depth of
services;
for clients;
facilitated the delivery of more challenging
and interesting engagements;
that has helped the firm to attract and retain
the best talent.
continues to evolve and as such so too does
Deloitte’s strategy and approach to maintain and
further expand its position.
its workforce to maximize its success?
2. What advantages does a consultancy offer
compared to a team of contractors?
3. What are the key advantages of a ‘full service’
consultancy compared with a more
niche operator?
The Consulting Process
During a typical consulting intervention, the consultant and the client undertake a set of activities required for achieving the desired purposes and changes, known as “the consulting process”.
This process has a clear beginning (the relationship is established and work starts) and end (the consultant
departs).
Between these two points the process can be subdivided into several phases, which helps both the consultant and the client to be systematic and methodical, proceeding from phase to phase, and from operation to operation.
Many different ways of subdividing the consulting process, or cycle, into major phases can be found in the literature.
Various authors suggest models ranging from three to ten phases.
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Fact-Finding Leading to Solution
Pricing of Consultancy
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Initial phase in any consulting process and assignment.
The consultant and the client meet, try to learn as much as possible
about each other
Discuss and define the reason for which the consultant has been brought in, and on this basis agree on the scope of the assignment and the approach to be taken.
The results of these first contacts, discussions, examinations and planning exercises are then reflected in the consulting contract, the signature of which can be regarded as the conclusion of this initial phase.
Entry is very much an exercise in matching.
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Initial contacts
The consultant makes the contact or The client makes the contact
First meetings and Preparing for initial meetings
Agenda for the first meeting
Agreement on how to proceed
Preliminary problem diagnosis
Scope of the diagnosis
Some methodological guidelines, rules, procedures and analytical techniques used in the preliminary problem diagnosis are the same as those of the later diagnosis
Using comparison(Gap Analysis)
Terms of reference
initial statement of the work to be undertaken by a consultant
If terms of reference are used: the client’s policy is to do as much analytical and planning work as possible before considering to use a consultant; often this will be the case with assignments dealing with relatively narrow and well-defined technical issues; the client (usually in the public sector)
If terms of reference are not used: the client (usually in the private sector) prefers to select a consultant, do the preliminary problem diagnosis, and define the scope of the assignment jointly with him or her. The client then confirms the choice on the basis
of a proposal received from the consultant, without using the intermediate stage of drafting terms of reference.
Assignment strategy and plan
A fundamental aspect of designing and planning a consulting assignment is the choice of assignment strategy.
The assignment plan, including the strategy that will be followed, is formally presented to the client as a proposal
Proposal to the client
aka technical proposal, project document, project plan, contract proposal etc.
Sometime in predetermined format. To facilitates evaluation of alternative proposals received from several consultants.
A proposal submitted to the client is an important selling document.
The consulting contract
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The consultant makes the contact : can show that he knows about that client’s problems and intentions and has something relevant to offer, the chances are better that such an initiative will produce an assignment.
The client makes the contact : In most cases it will be the client who makes the first contact. This implies that he or she is aware of problems and need for independent advice in his or her organization, and has decided to bring in a management consultant. In addition, the client must have a reason for turning to a particular consultant.
First meetings : The consultant should make sure that he or she will meet the decision-maker – the person who is not only technically interested in the assignment but also able to authorize it, and who will make sure that the required resources will be available.
Preparing for initial meetings : Initial meetings require thorough preparation by the consultant. Without going into much detail, he or she should collect essential orientation information about the client, the environment, and the characteristic problems of the sector of activity concerned. The client does not want the consultant to come with ready-made solutions, but expects someone who is familiar with the kinds of problems found in his or her company.
Agenda for the first meeting: The first meeting is a form of investigational interview in which each party seeks to learn about the other. The consultant should encourage the client to do most of the talking, to speak about the firm, the difficulties, hopes and expectations. It is as well for the discussion to develop from the general situation to the particular and to focus eventually on the real issue.
Agreement on how to proceed : If the consultant and the client conclude that they are interested in principle in working together, several further questions must be answered, such as scope and purpose of a preliminary diagnosis; records and information to be made available; who should be seen and when; when to conclude the preliminary diagnosis and how to present proposals to the client; payment for the diagnosis etc.
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Diagnosis
The purpose of diagnosis is to examine the problem faced and the purposes pursued by the client in detail and in depth, identify the factors and forces that are causing and influencing the problem.
The consultant should start the diagnostic work with a clear conceptual framework in mind.
Diagnosis is sometimes viewed as equal to collecting, dissecting and analysing vast amounts of data, including a great deal of data that may have no relevance to the purpose of the assignment.
In principle, problem diagnosis does not include work on problem solutions. This will be done in the next phase, action planning.
Diagnosis may even lead to the conclusion that the problem cannot be resolved, or that the purpose pursued cannot be achieved and the problem is not worth resolving.
In practice, however, it is often difficult or inappropriate to make a strict distinction between the diagnostic and the action planning – and even the implementation – phases of the consulting process
Diagnostic work will identify and explore possible solutions.
Requires to Restating the problem and the purpose
Challenge : The human side of diagnosis
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Diagnosing purposes and problems
Instead of starting diagnosis by asking “What’s wrong here? What’s the matter?”, the consultant should ask first “What are we trying to accomplish here? What are we trying to do?”
Defining necessary facts
Facts should enable the examination of processes, relations, performances, causes and mutual influences, with special regard to underutilized opportunities and possible improvements.
Sources and ways of obtaining facts
records; events and conditions; memories.
Data analysis
This phase includes developing possible solutions to the problem diagnosed, choosing among alternative solutions, presenting proposals to the client, and preparing for the implementation of the solution chosen by the client.
The client’s involvement in action planning should be even more active than in the diagnostic phase.
The emphasis is no longer on analytical work, but on innovation
and creativity.
The objective is not to find more data and further explanations for the existence of a problem, but to come up with something new.
Obviously, not all solutions to clients’ problems will involve totally fresh approaches.
Often there will be no need to develop a new solution from scratch because a suitable one already exists somewhere.
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Searching for possible solutions
Developing and evaluating alternatives
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Description of problem(s) to be solved.
Objectives and expected results (what is to be achieved, final product).
Background and Supporting information.
Timetable (key stages and control dates)
Interim and Final reporting.
Exclusions from the assignment (what will not be its object).
Constraints and other factors likely to affect the project.
Profile and competencies of eligible consultants.
Requested consultant inputs into the project.
Contact persons and addresses.
What basic purpose?
What other purposes?
What behaviour?
Different products, services, or activities.
Different methods.
Different system(s).
Different equipment.
Different location.
Are the client’s business and market changing rapidly?
Is competition likely to come with better solutions?
Is there a possibility that people will revert to present practices?
Should further developments be foreseen?
Where could solutions and ideas be found?
In the same unit?
In the same enterprise?
In literature?
Porter’s Five Forces: Barriers, Buyer Power, Customer Power, Substitutes,
Competition.
Scenario Planning: Planning done according to the situations.
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Tactical Plans
Some of the tactical plans used in the management consulting are-
Beneficiary, Target group: Who will actually benefit from the project.
Purpose: What purpose is to be accomplished by the project.
Result: Project must be result-oriented, what results are estimated to be achieved.
Development Objective: It defines a wider perspective, framework. It tell about the
ultimate or long term objective.
Immediate Objective: The objective of completion of project successfully and how,
the short term objective.
Output: What all delivered by the project and what all has to be delivered by the
project.
Indicator of Achievement: Measurement of whether objective is achieved and how
successfully. A controllable indicator used.
Actions: A set of actions to achieve and meet objective.
Input: Resources to be utilized- both quantitative and qualitative methods.
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SUBCONTRACTING
Subcontracting is especially prevalent in areas where complex projects are the norm, such as construction and information technology. Subcontractors are hired by the project's general contractor, who continues to have overall responsibility for project completion and execution within its stipulated parameters and deadlines.
Subcontracting is a type of work contract that seeks to outsource certain types of work to other companies. This is a step down from general contracting, which is a contract overseeing a much broader project in many cases. Subcontracting is done when the general contractor does not have the time or skills to perform certain tasks.
For example: When a building is being constructed, subcontracting becomes a major deal. A general contractor may take care of a number of tasks, including the brick-and-mortar construction, but look to subcontractors for other types of tasks, especially things like plumbing and electrical work. These disciplines are nearly always subcontracted out.
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Subcontracting offers a number of advantages.
First, it allows work on more than one phase of the project to be done at once, often leading to a quicker completion.
Second, because subcontractors already have the expertise and equipment to provide the service, it is often much cheaper for them to do the work than a general contractor who may not have that special expertise.
Finally, the subcontractor is usually able to work with a general contractor on more than one project, thus creating a savings for both in the long run as a relationship is formed.
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PRICING MODELS
3 core pricing models that are practiced in the management consulting industry
Fixed Price,
Risk-Reward.
Fixed Price approaches would be more suited to projects where the consultants
have already worked on something similar and hence becomes applicable to where
toolkits may be used.
A time and materials model would best suit a project where neither the consultant
nor the client are completely sure of what the client needs are or how complex the
project may be - which makes estimations difficult.
Finally, a risk-reward project is sometimes the best solution to motivate consultants
to bring about radical changes in the client business.
One size doesn’t fit all , Various factors which can be kept in mind:
Scope of Work
Doubling/tripling your hourly wage
Setting consultant fees strategically using real-life data
Charging what everyone else charges
Moving to Solution-based Fees
Many new consultants underestimate operating costs when pricing their services. Bill Mooney, founder of William Mooney Associates, a consultant to consultancies, offers a simple formula for calculating your daily rate.
The Magic Formula : Start from the bottom of your income statement and build up to get to your top line (i.e. the fees that you will charge).
Profit + Labor Costs + Overhead = Daily Fee Revenue
Labor : Your time is money. If you plan to take home an annual salary of $200,000 and work 260 days per year (365 days, minus Sundays, a few Saturdays, holidays and two weeks’ vacation), you will pay yourself $769 per working day.
Overhead : Overhead includes recurring expenses associated with running your business, such as rent, a secretary, phone bills, postage, benefits, insurance and equipment. Say all of that equals $15,000 per month, or $180,000 per year. Next, divide your annual costs by the number of working days per year. Market-research firm Kennedy Information figures most consultants spend 58% to 62% of their time working directly for their clients; 62% of those 260 days equals 161 days per year. Grand total: $1,120 per day.
Profit Margin : By Mooney’s estimates, a consultancy’s profit margin averages between 15% and 25% of its total expenses. Continuing from the previous slide, 20% of $1,120 is $224.
Adding It All Up : Plug those numbers back into the fee formula. Your daily fee equals $769 + $1,120 + $224. That’s $2,113 per day–or $211 per hour for a ten-hour day.
PRICING METHOD
Consulting is About
Industry Knowledge Counts.
Presentation skills matter.
Why a Sense of Skepticism and Unease Towards Management Consultants
Outsource vs. In-house
Each campaign treated uniquely
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Has to wear many hats (eat what they kill)
Physical limitations on number of clients that can be serviced
Can be more expensive per hour 
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In-house
Pros
Strong connection to the product / service offering and in depth understanding of the industry and top competitors.
Concentrated focus on servicing just one client instead of balancing the needs of multiple clients.
Less expensive to maintain internal resources, depending on the size and experience of the team.
Timely and complete access to forecasts, sales data, inventory, etc. 
Better integration and coordination with other internal departments, including marketing, merchandising, IT, and finance
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Internal positions do not usually foster competitive spirit.
A sense of boredom and eventual lack of motivation due to continually working on the same site as opposed to new challenges and opportunities.
Lack of informal learning opportunities which inhibits the ability to deliver in a rapidly changing environment.
Professionals are rarely equally trained or experienced in both organic optimization and paid search marketing 
Difficult to drive organizational change from within.
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Cost vs. Value of Advice
If an outsourcing consultant warns of danger zones as a buyer steps into uncharted territory, the advice is invaluable.
If the advice ties up dangling loose ends, gathers and analyzes relevant input from the right sources, and prevents costly mistakes, the value is easy to measure.
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An outsourcing advisory firm’s value includes crucial expertise in designing an effective RFP, service levels, pricing components, and other contractual elements.
An advisory firm has daily insight into the marketplace and can provide valuable advice on strategic and cultural fit of potential providers.
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Separating Consulting Success from Consulting Disaster
It is best for companies to engage consultant for a specific task.
Companies will have to remember that consultants are not a substitute for vision and good management.
Bringing in consultants without any clear idea of the help that is needed is a waste of time and money.
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To overcome this problem, there has to be strong dialogues between the consultant and the client.
Apart from recognition of the circumstances and the issues at hand, there has to be conviction from the consultant and management team on the need for the correct course of action and change.
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Implementation of Asia’s First Airline Management Cockpit®
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Increasing revenues and profitability
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Implementation of the Management Cockpit® built around the following key principles:
A framework driven by Thai Airways
Key Performance Indicators (KPIs)
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Benefits
Thai Airways management can now able to focus on essential issues for more effective decision-making
Consolidation of a high-level information or equivalent, accepted by top management using modern “world class” performance indicators
Improved shared responsibility and accountability amongst its managers
Improved transparency for the management thereby helping them in effective decision making
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Symbols
Heroes
Rituals
Values
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In management consulting, concern for culture is as important as any technical concern.
Being Culture-conscious
Being Culture-tolerant
Tolerance of their values and beliefs
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Norms and procedures of the organization are predefined
Employees behave in an ideal way and strictly adhere to the policies of the organization.
Pragmatic Culture: 
Customer satisfaction is the main motive
Such organizations do not follow any set rules.
Academy Culture: 
Roles and responsibilities are delegated according to their skill set.
Training to upgrade the knowledge and to improve their professional competence.
The employees stick to the organization for a longer duration and grow within it.
Educational Institutions
Baseball team Culture: 
Employees are the most treasured possession of the organization who have a major role in its successful functioning.
Individuals always have an upper edge and they do not bother much about their organization.
Advertising agencies, event management companies, financial institutions
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Individuals are hired as per their specialization, educational qualification and interests.
Appraisals are a regular feature of such a culture.
Fortress Culture: 
Employees are not very sure about their career and longevity.
The employees are terminated if the organization is not performing well.
Stock broking industries
Tough Guy Culture: 
Feedbacks are essential. Team managers are appointed to discuss queries with the team members and guide them whenever required.
Employees are under constant watch in such a culture.
Bet your company Culture: 
Take decisions which involve a huge amount of risk.
The principles and policies are formulated to address sensitive issues and it takes time to get the results.
Process Culture: 
Feedbacks and performance reviews do not matter much.
Government organizations
Powerful strategic tool
To mobilize employee initiative
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Organization’s mission and image
Seniority and authority
Treatment of people
Selection criteria for managerial and supervisory positions
Work organizations and discipline
Management and leadership style
Communication patterns
Socialization patterns
Consulting Firm’s culture
It encompasses values and norms concerning wide range of issues including:
Consulting methods and practices
Career progression
Code of ethics
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Goals – derived from mission
Measurement – determining how well the group is doing
Correction – remedial and repair strategies
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Defining group boundaries and criteria for inclusion and exclusion
Distributing power and status
Developing norms of intimacy
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Cultural Models
They are made up of culturally derived ideas and practices embodied, enacted and instituted in everyday life.
They give a form and direction to individual experiences.
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Geert Hofstede and Cross- Cultural Issues
“Culture is more often a source of conflict than of synergy. Cultural differences are nuisance at best and often a disaster.” – Geert Hofstede
The Hofstede Model of Cultural Dimensions can be of great use when it comes to analyzing a country’s culture.
Developed a model that identifies 5 dimensions to assist in differentiating cultures
Power distance
Uncertainty Avoidance
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Power Distance: The extent to which the people of a particular culture are willing to accept unequal power distribution.
High Power Distance:
Centralized decision making.
Management and superiors are highly respected and have the last say in decisions.
Low Power Distance:
Management hierarchies are flatter and more open to questioning
Uncertainty Avoidance: The extent to which a society fears and avoids uncertainty and uncertain outcomes.
High Uncertainty Avoidance:
Strictly defined rules of behaviour and formality
Things that are different or unexplained can be viewed as dangerous
Low Uncertainty Avoidance:
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Individualism vs. Collectivism: The extent to which people in the society define themselves as part of larger groups.
High Individualism:
High Collectivism:
Individuals are strongly incorporated into groups of family, clan, school
Government policies often favour the group over individual rights
Masculinity vs. Femininity: The extent to which a society favours certain gender traits.
High Masculinity:
Favours assertiveness
Importance placed on the well-being of relationships
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Long vs. Short-term Time Orientation: The extent to which society is focused on the future as opposed to the past and present.
Long-term time orientation:
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What are stakeholders?
A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business. They include:
Owners who are interested in how much profit the business makes.
Managers who are concerned about their salary.
Workers who want to earn high wages and keep their jobs.
Customers who want the business to produce quality products at reasonable prices.
Suppliers who want the business to continue to buy their products.
Lenders who want to be repaid on time and in full.
The community which has a stake in the business as employers of local people. Business activity also affects the local environment. For example, noisy night-time deliveries or a smelly factory would be unpopular with local residents.
Internal stakeholders are groups within a business - eg owners and workers.
External stakeholders are groups outside a business - eg the community.
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Stakeholders are involved in and/or affected (negatively or positively) by the outcome and impact of an action, project or program. Stakeholders can be divided into two main categories:
Internal stakeholders:
Internal Stakeholders are engaged in economic transactions with the business. (For example, stockholders, customers, suppliers, creditors, and employees)
External stakeholders:
External Stakeholders are affected by or can affect a business's actions without being directly engaged in the business. (For example, the general public, communities, activist groups, business support groups, and the media)
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Types of Stakeholders:
People who influence an endeavour but are not directly involved with doing the work. Examples include managers, suppliers, or the financial department of an organization.
People who are affected by any action taken by an organization or group. Examples are parents, children, customers, owners, and employees.
An individual or group with an interest in an organization's success. These stakeholders influence programs, products and services. An example of such a stakeholder is one who owns stock in the organization.
4. Any organization, governmental entity, or individual that has a stake in or may be impacted by a given approach to environmental regulation, pollution prevention, energy conservation, etc. The environmental organization Greenpeace would be an example of such a stakeholder.
5.A participant in a community mobilization effort representing a particular segment of society. Examples include school board members, environmental organizations, elected officials and chamber of commerce representatives.
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Different stakeholders have different objectives. The interests of different stakeholder groups can conflict. For example:
Owners generally seek high profits and so may be reluctant to see the business pay high wages to staff.
A business decision to move production overseas may reduce staff costs. It will therefore benefit owners but work against the interests of existing staff who will lose their jobs. Customers also suffer if they receive a poorer service.
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Disagreements between stake holders
Due to the demands placed on businesses by so many different stakeholders, it is no surprise that there are often disagreements and conflict between the different groups. Some of the more common areas of conflict are:
1.Shareholders and management
Profit maximisation is often the over-riding objective of shareholders - resulting in large dividend payments for them. However, it is far more likely that the managers of the business will aim to profit satisfy rather than profit maximise (that is, they will aim to earn a satisfactory level of profits, and then use the remaining resources to pursue other objectives such as diversification and growth). This conflict between these two groups is often referred to as divorce of ownership (the shareholders) and control (the management).
2.Customers and the business
Customers are unlikely to remain loyal and repeat purchase from the business if the product that the have purchased is of poor quality and/or is poor value for money. More customers are prepared to complain about the quality of products and after-sales service than ever before, and the business must ensure that it has in place a number of strategies designed to satisfy the disgruntled customer, reimburse any financial loss that they may have incurred and persuade them to remain loyal to the business.
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3. Suppliers and the business
Suppliers are often quoted as complaining about the lack of prompt payments from businesses for deliveries of raw materials, and if this became a regular problem then the suppliers may well refuse credit to the businesses or may even cease all dealings with them. On the other hand, many businesses have been known to complain about the late deliveries of raw materials and components from suppliers, and the dubious quality of the parts once they have been inspected.
4.The community and the business
As outlined previously, the local community can often suffer at the hands of a large company through the negative externalities of pollution, noise, congestion and the building of new factories in areas of outstanding beauty. However, if the business faces strong protests from residents and from pressure groups concerned about its actions, then it may decide to relocate to another area, causing much unemployment and a fall in investment in the community it leaves behind.
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What is corporate governance?
The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community.
The following definition should help us to understand the concept better. “Corporate governance is not just corporate management, it is something much broader to include a fair, efficient and transparent administration to meet certain well-defined objectives. It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers,
and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs. When it is practised under a well-laid out system, it leads to the building of a legal, commercial and institutional framework and demarcates the boundaries within which these functions are performed.”
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The development of corporate governance concept is naturally and essentially related to
the ‘objectives of corporate governance’ and it may be important to note what the
‘Introductory framework’ has to say on this
“Good governance is integral to the very existence of a company. It inspires and
strengthens investor’s confidence by ensuring company’s commitment to higher growth
and profits. It seeks to achieve following objectives:
(i) That a properly structured Board capable of taking independent and objective
decisions is in place at the helm of affairs;
(ii) That the Board is balanced as regards the representation of adequate number of
non-executive and independent directors who will take care of the interests and
well being of all the stakeholders;
(iii) That the Board adopts transparent procedures and practices and arrives at
decisions on the strength of adequate information.
(iv) That the Board has an effective machinery to sub serve the concerns of
stakeholders;
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(v) That the Board keeps the shareholders informed of relevant developments impacting the company;
(vi) That the Board effectively and regularly monitors the functioning of the management team; and
(vii) That the Board remains in effective control of the affairs of the company at all times.
The overall endeavour of the Board should be to take the organisation forward, to maximise long-term value and shareholders’ wealth.”
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Initiatives
• New Companies Act – inducing good CG practices through self regulation, responsive legal framework based on shareholders’ democracy; disclosure based regime; rational penal provisions with built-in deterrence and effective protection.
• Amendments to the Acts governing three professional institutes (ICAI/ICSI/ICWAI) with a view to strengthen the disciplinary mechanism and bring transparency in their working.
• Notification of Accounting Standards with a view to bring the disclosure norms in tune with the international reporting standards;
• SEBI – Clause 49 – Appointment of IDs, Audit committee, Code of conduct, disclosures of related party transactions, remunerations, compliance of accounting standards, certifications of CEO & CFO, Compliance Certification & Whistle-blower policy (optional);
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The Government has renamed the Ministry from “Company Affairs” to “Corporate Affairs” – with a new vision
“We resolve ourselves to be the leader and partner in initiative for Corporate Reforms, Good-Governance and Enlightened Regulation, with a view to promote and facilitate effective corporate functioning and investor protection.”
Introduction of LLPs; transformation in the service delivery mechanism for transparency and certainty – low-cost, easy compliance;
Setting up of Investor Education and Protection Fund.
Empowering investors through the medium of education and information with the help of investor associations, VOs, NGOs, etc.;
Setting up of NFCG in partnership with stakeholders – CII, ICAI & ICSI
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What is Ethics?
A set of standards derived from Social Values, to choose what is good and evil, Right or wrong,  ought to do and not to do is Ethical Standards.  These are the set of values in accordance to the Social norms which helps to survive in the community.  The Behaviour values which are considered important presently for the existence, acts as a standard for the future ethical organization decision making.
There has been an increasing Unethical practices gained importance for being into Fair practices, things came into limelight after the Unethical practices like Financial Frauds by companies like Enron and Arthur Anderson carried on, by which there has been an Increasing pressure on the organization from the Government body and has more concerned on social responsibility and in unethical practices.
An ethical decision making should be in such a way that it should be legally and morally, acceptable by Employees and the Shareholders. May be an ethical decision doesn’t always directs to Ethical behavior, whereas an Ethical Behaviour always comes before an Ethical decision making.
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Factors leading to Unethical Decision Making:
One of the reason why there is been an increasing unfair practices are because of Competition Driven Performance Management, where the possibilities of Violation of rules are higher.
Since the objective of any organization is Profit maximization, the concentration of the mangers tends to be more on short term goals rather than long term, which thrust them for taking unethical norms just to meet the performance targets.
Intrinsic Factors, like lack of Moral Awareness about the nature of decision, can make the decision go wrong and other Individual Factor values can also arises problem in making decision as per organization Ethical standards which influences greatly where the intensity depends on how strong one is at, at their own values.
Even after the implementation of Ethics policy it has been observed that, the subordinates follow what their supervisors likes rather than, what the policy says.   So, if the manager is unethical, the subordinates follow the manager in such unfair practices.
Problems in Ethical decision making may occur not only when the intentions are evil, but also when there is a conflict between Individual Interest and social norm.
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Get someone to do something you want done.
Make things happen in the way you want.
Influence is …
Expressed by others’ behavioral response to your exercise of power.
Reward power.
The extent to which a manager can use extrinsic and intrinsic rewards to control other people.
Success in accessing and utilizing rewards depends on manager’s skills.
Amity Business School
Coercive power.
The extent to which a manager can deny desired rewards or administer punishments to control other people.
Availability varies from one organization and manager to another.
Legitimate power.
Also known as formal hierarchical authority.
The extent to which a manager can use subordinates’ internalized values or beliefs that the “boss” has a “right of command” to control their behavior.
If legitimacy is lost, authority will not be accepted by subordinates.
Amity Business School
Expert power.
The ability to control another person’s behavior through the possession of knowledge, experience, or judgment that the other person needs but does not have.
Is relative, not absolute.
Referent power.
The ability to control another’s behavior because the person wants to identify with the power source.
Can be enhanced by linking to morality and ethics and long-term vision.
Amity Business School
Organisational Politics
Politics refers to the structure and process of the use of authority and power to affect definition of goals, direction and the other major parameters of the organization. Decisions are not made in a rational way but rather through compromise, accommodation and bargaining. – TUSHMAN
From the above definition two points emerge
Political behavior is outside one’s specified job requirements.
It generates efforts to influence the goals, criteria or processes used for decision making that will result in the distribution of advantages and disadvantages within the organization.
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FEATURES
Organizational politics involves the use of some kind of authority, power or pressure over other person or groups. Rewards and punishment are commonly used for this purpose.
Basically political behavior is self serving in nature. Attempts are made to use organizational resources for personal benefits or to give some benefits to others.
Political behavior is outside ones specified job requirements. It involves getting things accomplished that are not formally recognized practices or procedures.
Political decisions may not be rational from the organizational point of view. They are usually made to acquire more power.
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Organizational politics has several unintended consequences such as less servicing behavior, goal displacement, conflicts, demotivation of organizational members etc.
In order to check undesirable behavior following steps may be followed :
Clearly defined jobs.
Proper managerial behavior.